Raising Financially Responsible Kids

"Money doesn't grow on trees"... I'm sure that sounds familiar. In fact, maybe you grew up hearing it. And today you may even say it to your children. So what does that statement really imply? Perhaps money doesn't come easily, or you need to work hard to have money. And with that message, it's ..."Money doesn't grow on trees"... I'm sure that sounds familiar. In fact, maybe you grew up hearing it. And today you may even say it to your children. So what does that statement really imply? Perhaps money doesn't come easily, or you need to work hard to have money. And with that message, it's no wonder that money will be difficult to earn. It's sayings like "money doesn't grow on trees" and "money is the root of all evil", and "what do you think I am, made of money?" that set up those negative money patterns for life. And if that's what you grew up with, then what message are you sending your children?

This is important to understand, since teaching children about money and financial literacy is just as significant as teaching them their ABC's. Teaching your children to have a positive relationship with money is a gift that will serve them for the rest of their lives. Just as you teach them the importance of eating right, brushing their teeth and taking care of themselves, so too is the need to educate them on the value of money, how to respect money, and the importance of financially supporting themselves. As you know, without this knowledge, life can be pretty difficult to navigate; and to make up for it, they'll have to try hard to get up to speed in order to be financially stable in their adult life. The statistics on this are alarming. Young adults age 18-24 are the largest growing population declaring bankruptcy today. In fact, bankruptcies in this segment have increased 96% in 10 years.

Helping children understand what money represents and what it can do for them is an important first step. Of course, you can encourage them to feel good about money by helping them to understand the many uses money can play: living a good life, supporting themselves and their family, helping others, investing in their future, donating to specific causes, etc. What's really essential is that they honor money by using it with positive intentions unencumbered by limiting beliefs. So be aware of the "habitual phrases" you use about money and the messages they send.

Teaching children to be responsible with money is key. Being responsible with money means knowing how to earn it and knowing how to save and invest it, as well as being aware of all expenditures. When young adults act responsibly in this way, they get the message that they can take care of themselves, which fosters self-empowerment.

Talking with your children about the importance of money is not enough. Remember it's not so much what you say but what you do...your actions and your results speak louder than your words. For example, if you say that it's important to invest your money, but they constantly see you spending it, they may internalize the need to spend money just as you've shown them. Therefore, to counter the impression of spending, consider demonstrating how you regularly make deposits into your savings or mutual fund accounts.

Being aware of your own money patterns gives you the ability to separate out the positive messages that you want to send to your children. An example of one message that relates to the value that you place on money is how you demonstrate the rewards of "earning" money. Do you ever acknowledge that? How about the rewards of disciplining yourself to save money for something that is important to you? Do your children do chores around the home, or have some type of responsibility for contributing to your household as a family member? Whether you have limited or unlimited income, it is important to teach these values to children. It will enable them to be proud and motivated to work for their desired lifestyle. It will also foster team-building skills and teach responsibility. Be sure to dialogue about these topics, and point out the actions that must be taken in order to achieve and appreciate the many benefits of money.

When thinking about the messages that you send out, ask yourself how you demonstrate the importance of giving back to society and making charitable donations. Ask yourself, "What positive money messages do you want your children to learn?" Write out your ideas about earning an income, saving money and investing, and then share these thoughts with them.

Your children are never too young to start learning, and the results of financial guidance...priceless.