Ever feel the stinging pain of dread when your child repeats back to you a naughty word you’d just errantly let fly? Recall the nauseating futility spent trying to eradicate the subsequent implementation of said naughty word in regular, daily use? It’s all because children are natural-born imitators. It’s part of how they develop and mature.
Children don’t just mimic how we speak; there is evidence that they imitate our financial behavior as well. For example, one of the strongest influences on entrepreneurs is whether or not their parents engaged in entrepreneurship when they were children. The fact that children are wired to imitate, gives us a few things to think about if we want to raise financially savvy children.
We Need to be in Control of Our Own Finances
A T. Rowe Price survey of parents found that one third of parents gave themselves a “C” grade or less on their financial knowledge. The average grade was a mere “B minus” and 54 percent of parents felt that they should be doing more for their children. On average, there doesn’t seem to be a lot of confidence brimming from parents. If not for you, if not for your kids, then when are you going to get control of your finances?
Do Your Finances out in the Open
It may be easier to pay the bills or update the budget at night when your children are asleep, but if you want your children emulate your financial habits, you should deliberately do the finances when the kids are around. In fact, you should plan and schedule time regularly to do so. Being consistent, shows that family finances are something to be taken seriously. The more importance you place on it, the more likely your children will be interested in what it is all about.
Let Children in on Some of the Family Finance Secrets
There are plenty of good reasons not to share your personal financial ins and outs with your children. That’s why, traditionally, parents didn’t discuss their own finances with their children. While I don’t think every detail should be shared (income for example) I think it would be wise to let your children in on some of your planning.
For example, hang the family budget on the wall so that your children see how you plan your budget and record your expenses. I remember listening to my parents talk about the family finances all the time, but I never new what they were talking about. Letting kids in on the secret will help them put the conversations they overhear in context.
Give the Kids an Internship
If you are sharing some of the secret family finance information, you might as well go one step further and get them involved. Give them some experience by giving them an internship with the finances.
Interns are great! They work for experience, giving you more free time at no cost. Your children are going to need to do many of the same budgeting and bill paying someday. You can have them record the receipts for the budget or balance the checkbook all while you catch up on the laundry.
As I pointed out in one of my first posts, schools simply can’t replace a parent’s role when it comes to teaching them about personal finances. If children are going to imitate some of your behaviors, they might as well pick up some good financial habits and not just naughty words.