“Do as I say, not as I do!” Have you ever said this to your children and actually gotten away with it? Maybe when they were really young, but it definitely doesn’t fly with older kids and it certainly doesn’t work when it comes to money. Another expression comes to mind instead: actions speak louder than words!
As a parent, you are a role model for your kids – probably their most important role model. Your kids are watching and learning from you. They see how you treat and relate to others. They watch how well you look after your health and well-being. They observe how you balance work and family life. And they are aware of both your good and your bad habits when it comes to managing money.
So, what kind of financial role model are you? Here are some questions to get you thinking about your behaviour and attitude towards money and the messages these actions send to your kids. You can find more questions in the Role Model Self-Assessment section in chapter 1 of A Parent’s Guide to Raising Money-Smart Kids:
- Do you plan for big purchases and save for them over time, or do you spend impulsively, buying what you want when you want and worrying about paying the credit card bill later? (And do you sneak those purchases into the house, hoping no one will notice?)
- Would you stretch yourself financially in order to drive a fancy car, or do you try to live within or below your means?
- Do you stay organized and pay your bills on time, or do you ignore them, missing due dates and making late payments, regardless of the negative impact this has on your credit rating?
In order to raise money-smart kids, you have to be smart about money yourself. This means getting your own financial house in order so you can teach by example. But beyond just modelling good money habits, you also have to talk to your kids about how money works. For some parents, this is really hard – they’d rather talk to their kids about sex than money! They don’t feel knowledgeable or qualified and they don’t know how to approach it. Some parents also worry about how to answer uncomfortable questions like “Are we rich (or poor)?” or “How much money do you make?” or “How much is our mortgage?”
I’m not suggesting that you reveal confidential family information to children who are too young or who are not mature enough to safeguard private family matters. But I am suggesting that you do not make money a taboo topic at home. Keep the information age-appropriate and only as detailed as you think appropriate. Take advantage of teachable moments to build money lessons into your daily lives, like grocery shopping, using your credit card at the mall or planning a birthday party.
Although it can be challenging, it’s worth the effort to be a good financial role model and to teach your kids about money. The pay-off is financially independent and responsible adult children.
When it comes to your finances, how open are you with your kids? Are there any topics that you try to steer away from?