Money Smart Kids Pt. 3

Today’s blog steps are really tough. We’re going to talk about money shame and secrets. We’re also going to address facing the bad decisions that you have made about money in the past. These are critical not to pass onto your kids. It’s essential that you teach your children to avoid the hard lessons that you already learned for them. The nice part about this is that all of the poor choices you made don’t have to be for nothing anymore. You have hard earned wisdom that someone else can use.

Most of us come from family backgrounds that were very private about finances.  We are taught that asking questions about money is rude. It’s rude to ask someone what they make. It’s rude to ask someone what their mortgage payment is. Forget about saying how much debt you are in, or savings that you have! I am not saying that you should share this information with everyone who crosses your path, but you should also not feel like it is a dirty secret. Looking back on your early adulthood, think about how you felt about money. Were you properly prepared to manage money responsibly? There is no distinction here between the amount of wealth you have, and whether or not your parents taught you about finances. The rates of financial education are abysmal no matter what your socioeconomic status. You have to change that if you want success for your children. It’s ok if you feel like money is a private matter, but reconsider who it should and needs to be private from. 

Be open with your children about your finances. It’s ok for them to know what you make. It’s also important for them to know how you got there. A livable wage doesn’t fall from the sky, (for most people) teach them ways to make that happen. Allow them to see what your bills are. They should move forward in life knowing what things cost. They will research apartment pricing on their own, but they will have no sense about other costs like utilities, and how that can add up. If they don’t know the true cost of living on their own, they will probably get into unnecessary debt right away, and continue that pattern throughout their lives. 

Let’s talk about unnecessary debt. Everyone that I know has made a bad choice about finances at one point or another in their lives. Some people never stop making them. We talked in the last blog about saving for large purchases. I’ll repeat it here, it is not human nature to be a saver. Instant gratification feels so much better! A credit card or personal loan is an easy answer to get what you want right now. You have to teach your children about the pitfalls of that strategy. It is a learned behavior not to spend money that you don’t have. It is also a learned behavior to spend money that you don’t have. You have to put your kiddos on the right path! If you don’t take responsibility for their education in this area they get their info from whatever voice is the loudest.  The loudest voice is never the best. It’s generally the voice telling them that they should buy something.

Finally, let’s address the shame that can be tied to money habits that you have personally, or choices that you made in the past. These can be student loans, maxed credit cards, missed payments, collections, a repossessed car, an eviction, the list is endless. These are tough problems! It is so easy to make money mistakes. You are not alone. The degree of mistakes may vary, but there is not a person alive, or who has ever lived who has made zero money mistakes. This is why it is so crucial that we teach our children about these things. You may feel embarrassed or ashamed, but what if your children never have to go through those same things. You learned a lot through the process of making money mistakes. That experience has real value. That experience can help someone else who is on the same path that you would want them to avoid. Talking to your children about these things may feel embarrassing at first. Over time it will become easier, and you can feel the comfort of knowing that they are prepared to face these problems and make better choices. If you need help to learn how to do this, please reach out to me.