This topic can be a sensitive one for many people. In my Personal Insights blog I wrote from a personal/adult perspective. In this post I want to share my views from a child development perspective.
There are so many angles to this because we live in a Capitalistic Society where one’s socio-economic standing impacts the day-to-day so profoundly. In writing about this in a blog, I am challenged in how to best communicate my view. Further, the start point from a parenting perspective is very much your respective acumen in how to manage money. Therefore, as a parent who manages money (individually and/or for the household), what is your reference to not only teach your child about money, but to instill in them the innate understanding of how to manage their eventual income?
I won’t say I fell into this as a parent, as you know most things are not so coincidental. I also will not say that I was explicitly taught by my parents how to manage money, our conversations on this matter were not that advanced. However, my genesis in deliberately teaching my children about money stems from two things that did happen in my youth. First, I was not given an allowance when I was younger, so I really did not have money at my disposal. Therefore, I decided not to similarly put my kids in such a situation. Second, when I did start working (at about 16) I wasted my money. That summer I worked at McDonald’s and I am not sure I owned anything at the end of my time working. I had “wasted” the money on food, arcade games and other frivolous things that devalued my time. These two experiences motivated me to not have my daughters learn their management lessons in such a way.
As an adult, I also saw the impact of not learning how to manage money in your youth. This was exemplified with my wife. It is no secret that one of my wife’s weaknesses was money management when we first met. And seeing how she struggled in this area, despite talks and tactics, inspired me to instill that innate understanding in my girls, and do it early on. This last part really came to fruition when I noticed that my youngest daughter was demonstrating some of these poor “money management” traits, such as an attitude about how money works that indicated under-appreciation of its value.
These were the pre-conditions, as a child and young parent, that prompted me to design a plan of action that when realized 10-12 years down the road would preclude the stress, struggles and strain in my daughter’s lives that either my wife or I lived. Fortunately, I had learned those lessons and created a money management model that proved effective. So, I was confident that I could teach my girls how to manage their money. I acknowledge, such confidence is not a given for every parent.
As stated, that was the lead up to actually creating scenarios and teaching lessons that ultimately proved successful as both my girls can deftly manage their finances, including savings, investments, monthly cash flow and aggregate income that exceeds output reflected in their high credit scores, access to low interest rates, acceptable credit card balances and no reliance on me to cover their expenses (perhaps the most important 😊).
How I went about doing that will be captured in the next post.