Do you see yourself as a financial role model for your children?
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Have you seen the ad on TV about your driving and how it can influence your kids? The ads ask ‘what kind of driver are you raising?’ and asks you to ‘make every drive a good example’. To me the ad is implying that your children, no matter the age learn from your actions and behaviour and model it.
This is not just the case with your driving. They also tune into your money habits, from your relationship with money your children pick up more than you realise.
They pick up when you are stressed about paying bills, when you say they can’t have something because it is too expensive and when you buy something and then try and hide it from your partner.
Your children pick up on all these things; this then can define their relationship with money.
For example if you are always arguing with your partner about money your children will notice. It can make their relationship with money a bad one as they feel money creates conflict.
If you tell your children they can’t have something because you can’t afford it, again they won’t have a healthy relationship with money as it makes them feel sad all the time.
If you use money to buy their affection, they will pick up on this. Not only will they use this against you, this may translate to other relationships in the future. As they may believe this is what love is about, getting stuff.
Hiding money and not openly discussing it in front of the children doesn’t help either. If you don’t expose your children to money, they will grow up not knowing how to manage it which could lead to debt issues and getting themselves into trouble.
Children need to learn about money and that learning comes from you, you’re the first person they will look to. Ensuring they understand money is essential.
First, you need to be good financial role model. That means doing your very best to live within your means and put away some savings or investing for your future. It also helps to educate yourself about money so you can have open constructive discussions about money with your partner while the children are present so they can model your behaviour.
Secondly, openly discuss money with your children, whether it is pocket money, presents in the form of money or money they earn.
Some people set rules with their children about money. For example, 10% must be given to a charity. This is good as the child learns about giving not just about receiving; you could even discuss different charities and let them decide whom it goes to. Then you need to teach them about saving; they can put 40% into saving for the future. It really doesn’t matter what they are saving for or even if they have made a decision. This one is more about putting a good habit in place for their future. The last 50% can be fun money for them to decide what they want to do. This will teach them that money isn’t all bad, it can be fun too.
The hard part as a parent is letting them decide what they use fun money for. It’s important that you let them make their decisions and don’t influence them at all. You want them to understand the power and impact of making their own decision. If they have buyer’s remorse, so to speak, they will be more cautious spending their money in the future. It is better to learn this lesson on a $40 toy than later in life on a $400,000 house.
I would suggest you talk to them about their decision and why they made the decision. Just to help them think through their options. Although remember ask questions and try not to influence their decision.
The earlier you start educating your children about money the better. If you start this when the children are quite young they will never know any difference. If your children are teenagers, don’t be concerned; it’s never too late.
My parents took me to investment seminars with them when I was in my late teens, then when I had a job, I just started investing. Since I had seen my parents invest when I was a child, I just assumed it’s what people did. I didn’t know any different.
That was until I started getting questions from work colleagues about investing. That’s when I learnt that not everyone had the financial role models I had.
So what kind of financial role model are you? Do you have any tips to add? Please SHARE in the comments below.