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Finances
The Financially Intelligent Parent: 8 Steps to Raising
Successful, Generous, Responsible Children
By Eileen Gallo, Ph.D. and Jon Gallo J.D.
What you say and do about money has a profound influence on your
child. There are money moments every day that you can use to teach
your children important skills and lessons about life. But what to
say or do isn't always obvious. I
s it a good idea to pay for chores or grades? How do you help your
child develop a work ethic? How do you structure an allowance to
help your child learn to make choices? Why is involving your
children in charity so important? Eileen and Jon Gallo, experts in
the fields of children, psychology and money, provide parents with
eight key behaviors that will help them raise financially
responsible children:
1. Encourage a work ethic
Work ethic is a learned behavior, and parents are
the best models to teach kids to acquire it. If you want your
children to work hard and derive meaning and satisfaction from what
they do, make sure you are modeling the right messages.
Insisting your kids do their homework and help around the house does
not guarantee they will grow up with a sense of accountability and a
desire to achieve. Developing a work ethic in your child is a
holistic process and the eight money behaviors of a financially
intelligent parent are keys to this process.
2. Get your own money stories straight
Because you send your children messages about
money all the time, it is imperative that both you and your spouse
are on the same page when it comes to your money stories.
A money story is an open, honest and personal story of your
relationship with financial issues, especially as you grew up
because most people's relationship with money developed during
childhood. You need to identify why you feel the way you do about
money so you can send coherent and consistent messages to your kids.
When both parents focus on their money stories, children receive
positive messages. Getting your money stories straight does not just
mean that you agree on basic issues such as allowances and college
savings.
It also means that both of you have agreed to identify certain basic
money values you want to teach your children, such as giving is
good, working hard is its own reward, and you don't always get
everything you want.
3. Facilitate financial reflection
As with most decisions kids make, when it comes to
money decisions they are frequently impulsive. As a financially
intelligent parent, you want to teach your children how to think in
terms of choices, alternatives and consequences. This is called
reflective thinking.
Learning how to reflect both before and after making a decision is a
great life skill, and one that is the hallmark of people who make
good choices in everything from careers to relationships to
investments.
Financially intelligent parents teach their children to evaluate
financial consequences based on available choices rather than making
impulsive decisions. As a result, children recognize that there are
many options available and they acquire the skill to make good
choices.
4. Become a charitable family
By teaching your children that they can do more
with money than spend it on themselves, you encourage them to become
more compassionate and caring. By participating as a family in
volunteer and community activities, you help your children develop
empathy and a sense of responsibility to others.
Your children will realize they have the power to make life better
for others. Because children learn through modeling behavior, you
have to do more than write a check to charity.
You need to show your children what it means to help others.
Modeling charitable behaviors, including volunteerism, can jump
start your child's empathy and desire to help others.
5. Teach financial literacy
Although it is important to teach children how to
balance a checkbook and create a budget, to become truly financially
literate your children must learn within a context of values and
money behaviors. Your children need a combination of concrete
examples, their own experiences and financial reflection.
If they do not learn to behave responsibly with money as kids, they
will have to learn as adults when the cost is much higher. One of
the best tools to teach your children financial literacy is an
allowance.
Approaching allowances in a consistently constructive way allows you
to instill decision-making wisdom in your children rather than
controlling them. An allowance also helps your children gain a
well-balanced perspective about money, encouraging saving, investing
and giving, in addition to spending.
6. Awareness of the values you model
Your children are tuned in to your purchasing
decisions. The ways you spend your money sends messages to your
children about your values and life priorities. Children also notice
how you spend your time and your actions can unintentionally send
messages you did not intend your children to receive.
When you miss opportunities to spend time with your children in
order to put in extra hours at work or manage your money, you are
sending a message that money is more important than family.
Financially intelligent parents are highly conscious of their
spending habits, as well as how they balance their work and family
time, and the values they communicate.
7. Moderate extreme money tendencies
Extreme money tendencies can evolve into money
disorders which cause chaos within your family and send the wrong
messages to your children. There are several types of money
disorders, ranging from excessive shopping to racking up credit card
debt to excessive frugality.
Regardless of the disorder, extreme money tendencies cause your
children to experience confusion and insecurity in their lives.
Financially intelligent parents learn to recognize and moderate
extreme money behaviors.
8. Talking about the tough topics
Parents avoid talking about financial topics that
make them uncomfortable or that seem too complicated. Although you
model good money behaviors in certain ways, unless you compliment
these behaviors with good money conversations, you are not being as
effective as you could be.
Financially intelligent parents recognize teachable times each day
that give you and your children the opportunity to talk about
financial issues. You should welcome these opportunities, as
difficult as they are, to discuss and reflect on financial
decisions.
Eileen Gallo, Ph.D., and Jon Gallo, J.D. are
experts on children, families and money, and the authors of The
Financially Intelligent Parent: 8 Steps to Raising Successful,
Generous, Responsible Children (New American Library/Penguin Group).
For more financially intelligent parenting tips and tools, visit
http://www.FIParent.com. |
