How to teach your kids about money

I stumbled upon some rather interesting content today on the web about the intersection between money and children. For example, this article on Inc.com says that parents are not discussing a crucial topic with their kids–student loans and credit card debt, based on “research” done by an online lender called SoFi, which was really just a survey of a thousand people between ages 36 and 65 (most likely their customer base only) about their attitudes on money.

The author then went on to provide three tips on helping your (millennial) kids become more financially savvy, from – you guessed it – an employee of SoFi (somehow I feel that this article was just another advertisement for the lender) – things like “teach them healthy habits early” and “help them develop a good credit history” to “create debt grids” (write down all your debts and keep track of them).

While there is some merit to this advice, I think that ship has sailed for many millennials. Their baby boomer parents were no doubt, lacking in details about personal finance when they were growing up, so of course, they didn’t teach their kids about money. Can you blame them?

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Photo by Eric Prouzet on Unsplash

It’s no surprise that all parents will come across this in their parenting journey–how to teach their kids about money and what to teach them about. I think that in many ways, teaching kids about money has the same elements as teaching kids about sex–you’d rather avoid it until it’s absolutely necessary because…well, it’s uncomfortable, especially if you don’t know much yourself or you’ve made some bad choices with money, you definitely don’t want to ‘fess up to your kids, right?

Or maybe you do, and you want them to learn from you. Nonetheless, it’s still an uncomfortable subject even for adults to talk about. No wonder why money is like the number one thing that couples argue about, because chances are, you probably married someone who has opposite money philosophies than you do.

My parents fit this mold completely. Not only do they differ in their parenting styles, but they also differ in their money philosophies. My mom is a saver, and my dad was a spender. Both of them taught me some very important lessons about money.

We didn’t have much money when I was growing up, due to my dad’s inconsistent job history and the fact that we lived in a third world country, where everybody else around us was poor. It was a normal thing to be poor. I knew this right away as a child–that we didn’t have much money and that I was much luckier than my brothers, who was born and grew up during the war. A famous line of my mom’s is “We didn’t even have enough money for food so I had to divide the portions into three meals! And I didn’t have much to eat so I couldn’t produce enough breast milk to feed my kids!” Luckily, when I came along, there was enough food to go around, so she was able to produce the milk.

Despite that, my dad was a major giver–he’d give away whatever he had left, telling people, “It’s okay. You don’t have to pay me back,” or “This one’s on me, buddy.” As a child, I didn’t understand why he did this. I thought, “Why on earth would he give away money when we’re already so poor?!”

Now, as an adult, I finally understand.

MoneyToon

From watching Ellen Rogin’s Ted Talk today, I learned that giving can be just as rewarding as receiving. It can make you feel even richer. In her talk, she advocates for giving back to the community through charity donations and volunteering your time. This was something my dad did a lot. He volunteered his time at our church (the main hub of our community) and he gave away whatever money he had left (after he’d spent the majority of it, that is). This solidified his position within our community–everyone respected him and loved him, and we were always invited to parties and gatherings. He was also a funny guy–that helped too. His philosophy on money and on life was so simple, and yet it worked.

My mom, on the other hand, is the opposite. Besides the tithe she gives every week at church, she is not typically a charity giving kind of person. Instead, she hoards her money in random places and tends to them in the same meticulous manner as one would tend to a flower garden. Unlike my dad who couldn’t keep a job long enough, she worked hard at the same job for many years. She was the financial rock in our family. Without her, we probably would be worse off.

Ironically, my dad was the one who bought a life insurance policy and convinced her to do the same. But that’s another story.

The point is–kids are like sponges. They absorb information so much, and so quickly. As discussed in Ellen’s talk and in this article, kids learn a lot from how we act around them.

…how our children will manage money in the future is being shaped by the atmosphere around finances at home right now. – Ted blog

Reading this reminds me that as an adult, as a parent in particular, I need to pay attention to how we talk about money at home. In fact, my husband may agree that we don’t really talk about money in front of the kids. Besides saying, “We don’t have money for this and that” sometimes we typically don’t give them any idea as to how we are financially. I think they’re too young right now. My daughter is old enough to understand certain things though.

My parents didn’t talk about money either, but I learned so much from observing them in my youth. I think it’s worth noting that in order to teach your kids to be responsible with money as adults, we must first model that behavior. But I also don’t think that you should go around and say, “Don’t do what I did!” until they’re old enough to understand, probably around teenage years, when the majority of them start earning their own income.

I don’t want to be like my mom, but I also don’t want to be like my dad either, so I strive to be somewhat in the middle in terms of money. Every once in awhile, I’ll take the kids out for a treat–bubble tea, baked goods or a Happy Meal. They love it because it doesn’t happen very often. It’s my way of saying, “We don’t always have money to do this, but when we do, it’s fun!” Delayed gratification, right?