How do we teach our kids about money? (Part 4)
Modeling: Helping Children Build Their Core Beliefs About Money
Hopefully we’re on the same page now. If you want your more direct lessons about money to stick and to create the foundation for curious kids who are eager to learn about money and how it works, you must focus first on building a solid foundation of core beliefs around money. So, once you’ve decided on those 2-3 core beliefs that you want your kids to learn, the next most important step is to make sure you are setting a great example to learn from.
Model the Behaviors and Mindsets You Want Kids to Learn
One of the most crucial components of understanding how core beliefs are built is that they are learned by watching and listening to the everyday, often unintentional behaviors of parents and other caregivers. Which is to say, when it comes to core beliefs, your actions and behaviors towards money and money related activities (like work, budgeting, spending, and saving) will speak louder than your words.
If you want your kids to grow up knowing and learning how to budget their money, to engage with spending decisions thoughtfully, and/or to not spend money that they don’t have, it’s important to consistently model those behaviors. If you never let your kids see you engage in the behaviors you want them to learn, or they only see you engaging with money in ways that are stress-filled, avoidant, resentful, or helpless, it’s unlikely any later lesson about how to budget or save for retirement will teach them how to overcome those years and years of modeling you’ve put in front of them.
So, first and foremost, even when your kids are young, the most important thing you can do is be thoughtful about what your kids are seeing when they watch you interact with money:
- Do you allow them to see you pay bills and budget, or are you leading them to believe that all things financial happen behind the scenes, as if by magic?
- If you do allow them to watch you engaging in money-related activities, is it a stressful experience, or one you complain about having to do?
- Do you allow your kids to see you intentionally saving for bigger ticket items like vehicles or vacations so that they have an opportunity to see that these things don’t just happen suddenly, with no forethought or planning?
- Do you spend more (on them or yourself) right after you get paid, and casually reference the fact that you’ve just gotten paid, perpetuating the boom-bust belief about finances and pay cycles?
- Do you constantly complain about money, lack of money, work, and the cost of everything?
- Are they aware that every time you use a card to pay for something, it’s still linked to an account with a fixed amount of money?
- How do you talk about money with your partner? Is it stressful? Do you argue? Do you hide it from your kids? Or do they have a chance to observe you having healthy conversations about money?
- Do you allow them to observe you delaying gratification, considering wants and needs, and making tradeoffs?
- Do you allow them to see money mistakes, and how you learn and move on from them?
The pushback that I’ve received from some parents on letting kids observe their money behavior and decision-making is often along the lines of not wanting their kids to have to be stressed about money. But my pushback is that none of the things above are, inherently, stressful. If you’re introducing stress to all of those situations, then you may have some underlying core beliefs about money being stressful that you need to work on unpacking for yourself. I think most parents underestimate how curious kids are about money, and how ready they are to have opportunities to watch and observe (and even engage in) their parents’ money activities. They don’t find money stressful; they find it interesting. They want to know how money works for you and from you, and they’re typically eager to learn how money will work for them (more on that in our next post).
It’s also true that certain money situations may, in fact, be extremely stressful to deal with. I’m not saying money can’t be stressful, but rather, if every money interaction you have is filled with stress and negativity, that may be more about you than it is about money. In truly stressful money situations, the adults in the family need to be thoughtful about how much money and life stress they are introducing to their kids. I want to be clear – it’s not about allowing your kids to observe or be involved in every money conversation. I’m not advocating for that. In fact, I think it’s wise to deal with very stressful money situations in private first and then figure out what/how much of those situations are necessary and important to share with your kids. But if you’re shying away from all money modeling and communication because you don’t want to stress your kids out, that’s more of an issue with you assigning stress to everything money-related, which is more about your core money beliefs than about money being inherently stressful.
If there’s a way to model and teach kids to look both ways before crossing the street without introducing a perpetual fear of being run over by a car, I promise, there’s a way to model and teach them about money without creating a space of constant fear or anxiety.
Watch Your Language
I mentioned in Part 3 of this series the impossibility of teaching math to kids who believe that math doesn’t make sense. What I didn’t mention is the number of times I’ve seen this belief created and perpetuated by well-meaning parents, and even other teachers. Parents who come in and say, if front of their kids “I was never good at math either,” or the well-meaning English teacher down the hall that says, “Math never really made sense to me either, I barely got through it.” The casual perpetuation of the idea that math doesn’t make sense and is really just something to be suffered through and survived until you can forget all about it is so pervasive that no one even notices it. But can you imagine if I, your kid’s math teacher, said to them, “I never learned to read, because it’s not super important and just never really made sense to me.”
As much as people do this with math, they also do it with money. There’s a lot of casual, off-hand commentary about money being tossed around on a near daily basis in households that can take kids with a natural curiosity about it and turn them into kids who feels stressful, avoidant, and disempowered about money, before they even have a chance to really have many of their own experiences with it.
These phrases can at times seem so innocuous that they are hard to even notice, so, for the sake of trying to get you to pay close attention to your own language, I’m going to unpack just one of my favorites terrible money references:
“Must be nice…”
This is one that I hear people use all the time, and not just about money, but typically about some sort of limited resource like money or time. It assumes that someone’s ability to do something because they appear to have more money (or time) than you do, is a product of them having been more individually or systemically fortunate than you are. Is it possible that this is the case? Of course it is. Is it also possible that they’ve made choices differently from you and are therefore in a financially stronger position to do this? Yes, that is possible, too. Is it possible that they’re making a terrible financial decision for themselves – putting a vacation on a credit card they can’t afford to pay off, financing a car with a $1000 per month payment, or retiring too early and likely to face the consequences of that at some point? Of course it is. The truth is, the person who uses the phrase “must be nice,” really probably doesn’t know. They assume that it’s about another person being more fortunate than they are, when in reality, there could be a wide variety of explanations.
And while that in and of itself is problematic, think about what a kid who hears a parent say something like this learns, especially if the parent is prone to using this phrase every time they see someone who has something they do not.
And that’s just one tiny little phrase—3 words. The point here is, it’s worth taking some time to listen to yourself and the off-hand ways you reference money. Because when it comes to building core beliefs, these phrases and attitudes are doing a lot of heavy lifting, but not always in the way you intend.
Engage in Formative Assessment
In the preceding post, I wrote: it’s super helpful to notice where your core beliefs were formed by inaccurate or incomplete interpretations of situations, because it will help you to realize that your kids may be sitting there watching you or other people, and formulating stories of their own, that may or may not accurately reflect the truth of the situation.” We all take something different from what we observe, so it’s best not to assume that you know how your kids are internalizing and interpreting your money modeling and the money behaviors of others around them.
Each of your kids’ unique viewpoints, experiences, and money personalities will lead to different interpretations of your modeling, and as they age, to different interpretations of other people’s modeling as well. It’s important to create regular opportunities to check in, and to not assume that just because you’re modeling a certain behavior, they’re picking it up in the way you’d hoped or intended.
An easy way to do this is to have structured “money meetings” regularly where you normalize asking your kids to share their takeaways about their money experiences and observations:
- What is something we did with money this week? A decision we made or a conversation we had that you learned something from or had questions about?
- What is something you saw someone else doing this week with money, and what questions do you have about it? What did you learn from it? What else would you like to know about it?”
This is also a great way to make sure money conversations aren’t just being had in times of lack or want or stress. By structuring regular times to check in with your kids about what they’re learning about money, it sets the precedent that we can always talk about money, not just when they want or need money for something.
Just like with any topic, you can’t keep your kids isolated from others and their money opinions and behaviors for long. Your friends and relatives, and eventually their friends and outside of home adults will also start to influence your kids and how they think about money. And this is good. An important part of how kids become healthy adults is by learning from their families AND from their communities. And if you’ve fostered a place where healthy conversation about money is normal, and there’s a regular and recurring place to have it, it can go a long way in helping your kids integrate what they’re hearing and learning into a strong set of core money beliefs, and also to reject ideas that may not actually be in alignment with their core money beliefs. And this is critical to do with them as they grow up, so that they can learn about how to evaluate, integrate and/or reject the random pieces of good and bad money advice the world will throw at them as adults.
Is there any hope for my kids if I’ve been modeling unhealthy money behaviors for a long time?
There is! Your work ahead is probably harder than if you’d started this with your kids when they were young. You face both the challenge of undoing and overriding some already learned core beliefs, and possibly also the challenge of making some big money changes for yourself. But there’s absolutely no reason to give up if you’ve spent a portion of your kids’ lifetimes modeling the exact opposite of the behaviors you want them to learn or simply avoiding money modeling or money conversations like the plague.
The most important thing is to make sure you commit to the behavior of building healthy financial habits and mindsets. Kids and young adults are shrewd when it comes to inauthentic behaviors in adults. If you’re just “modeling” better money behaviors without actually working on developing a healthier approach to your own finances, this will likely come off as very inauthentic.
But if you are committed to developing a stronger money game, one of the most impactful things you can do is take your kids along for that ride. Just like any other life change or improvement, this is one that they can benefit from having a front row seat to. And what better way to learn certain lessons about money than by honestly watching you learn from your mistakes (like paying off credit card debt) and grow from them. It’s also important to be honest with your kids during these times, because it may also impact them. If you have to tighten up your budget because you’ve been living beyond your means, or because you’ve had a life or career change that requires it, it probably means some extras your kids have been receiving may need to be cut back. And if they are, you have two choices:
We are often so afraid to talk about this stuff with kids that we forget that the alternative, letting them interpret our new money behavior through any old lens, might actually result in a worse emotional experience: one where they believe the reason you’re spending less on them has to do with some sort of a change in your relationship to them.
The key point with modeling is, consistency is crucial, especially if you are modeling to change an already deeply held belief. You’re going to have to show them a commitment to this financially responsible version of you that is unwavering, because overriding a longstanding belief is hard, and requires some rewiring in the brain. We’ll come back to this in our last two posts as well… and look at how you can supplement this new modeling with intentional lessons. The only way to achieve this type of consistency is to make sure you are really committed to working on your own financial health and behaviors, because modeling is not a way of faking it for your kids. It’s a way of allowing them to see your thoughts and decision-making processes about money, in an open and communicative environment, so that they don’t grow up believing that money is some sort of mysterious, magical, or incomprehensibly difficult thing to deal with. But this can’t be a pretend version of you they’re watching, you need to be committed to the same level of financial agency and responsibility you hope to instill in them.
And even though it may feel like you’re working from a deficit by starting this process late, you have an incredible opportunity to teach them an extremely important core belief about money: that although it’s good to try and make strong financial decisions as early as possible in life, it’s also never too late to make big and impactful course corrections where money is concerned.
Image attribution:
Image by David Yonatan González from Pixabay , Photo by Vitaly Gariev on Unsplash ,Image by Anil sharma from Pixabay