What Are You Teaching Your Kids About Money?

By Andrew Beattie AAA

Children are the most potent receivers in the world - they are also notorious mimics. A child can read the unconscious signals in how you react to certain events and at once surmise and integrate your attitude into their personalities. If you show a negative attitude toward things of a financial nature, chances are, your child will too. So how do you know that you're sending the wrong financial messages to your kids? Read on for some tell-tale signs that you need to put your financial household in order.

What You Don't Know …
For many people, it may take discipline (and practice) to not to let out a groan when the bills come, a sigh when it is time to balance the books and a curse when a financial analyst appears on the television screen. However, if your reaction to financial topics is typically negative and your strategy one of avoidance, these will send a message to your child that finances are an annoyance best to be avoided.

What's the Message?
To gauge what kind of attitudes you are passing on to your child, go through this list of questions:

  1. Do you throw away bills or statements unopened?
  2. Are bills and statements the last thing you look at when the mail comes?
  3. Do you have a regular time set aside for household budgeting? (If you want to learn how to get started, see The Beauty Of Budgeting and A Corporate Approach To Personal Finance.)
  4. Do you keep your bills and statements in an organized fashion?
  5. Do you invest?
  6. If you invest, do you often complain about the performance of your portfolio at home?
  7. Do you have a regular schedule for monitoring and adjusting your investments? (For more insight on this topic, read Rebalance Your Portfolio To Stay On Track.)

Of all of these questions, No.1 is the most important. If you are avoiding your own financial affairs in this way, you pass your apprehension on to your child in the form of fear. The remaining questions deal with areas where most people could be more proactive, thus strengthening both your own and your child's financial abilities. (To read more, see Overcoming Financial Phobia.)

Although it is tricky at times, you must approach your finances with a positive attitude, and that attitude has to continue even when your child isn't in the room or they will know it's false. Believe it or not, forcing yourself into a positive frame of mind may have an immediate effect on how successful you are at controlling your own finances. This is an outcome that will benefit both you and your children. (For more on this, check out Opening Your Child's First Bank Account, Teaching Your Child To Be Financially Savvy and Teach Your Child About Investing.)

Problem Solving, Not Just Problems
If you approach your monthly bills, budget or portfolio like an intricate, but solvable, puzzle, it will psychologically prime you to think of clever ways to make things fit. Although this fact is sometimes over-emphasized by financial gurus selling the next big thing, you may know from experience that your attitude affects both the speed and quality of your decision-making. In short, people who put off dealing with their finances generally make worse decisions when they finally have to face the problems, whereas people who deal with them immediately not only identify problems earlier, but come up with better solutions. This may not result in you becoming a millionaire, but it will help you build a solid financial base.

If possible, have your child participate in some of the household spending decisions and encourage them to come up with ideas on how to save money. Many of the ideas will probably be impractical, but you may be surprised. When your child is old enough to do his own budgeting, he will already have a positive, "can do" attitude.

Conclusion
If you do not cultivate a positive attitude about finances in your household, your child may become one of the many paycheck-to-paycheck people who think they can avoid expenses by leaving bills unopened. If you see signs of this behavior in your own financial life, you may already understand how hard it is to overcome this subliminal programming. Don't put your child through the same experience.

If you struggle to manage your financial life, you may need to consult a financial professional. Although many people with chronic financial problems think that a financial professional is an expensive luxury meant only for the wealthy, this is like saying that seeing a doctor is something you can only do when you are in perfect health. In order to send the right messages to your children and, therefore, influence the way they behave in their own financial lives, you have to make sure your own finances are in order.

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