Reflecting of my journey with money, I recognise that it’s not how I want my children’s story to go. And it’s not just my story – it’s the stories of hundreds of clients I spend time with in Life Planning meetings. Yes, the plot and storyline may be different, but the results are the same for all of us.
A money story based in fear, loss and anxiety affects you, and your family as well. Because our stories are shaped by what we hear, see and believe while growing up, we have to learn from these messages, to change the outcome of our lives, and those of our children.
As parents, our responsibility is to teach our children right from wrong and be wary of not teaching them to be just like us. No parent deliberately wants to pass on bad habits, low self-esteem or ill-advised money behaviours.
I cannot pretend to be the expert advisor on money conversations to have with your children – I am still learning myself! What I can tell you, is that children learn from example. My personal motivation is to ensure that the fear and anxiety caused by the money messages I heard growing up, does not extend to my children. My husband and I try in the best way we know how, to inspire our children by celebrating our achievements, and having positive courageous currency conversations with them.
Here are the top five conversations we have:
Family goals: we plan together as a family and set yearly goals. Our children know what we are saving for. We also spend time chatting about our individual life goals and dreams, and how we aim to achieve them.
Money Mechanics: We discuss what money is, how it is earned and what it can do for you – and we practice working with money. Our children, from 12 years of age, manage their own bank accounts, their own savings and spending habits. We have also set up share portfolios for them and sit down monthly to discuss share prices and options. For me, the most important lesson to teach my children, is the value of compound interest.
Money and work: As parents, we earn money because we add value by what we do. Luckily for us, my husband and I both love what we do, and we see our salary as a “play-cheque” rather than a “pay-cheque.” We make an effort to talk positively about work, hoping to plant the seed that work is not a chore to resent, but an activity through which you earn money that enables choices.
Pocket Money: We reward our kids for doing tasks that adds value to the family. This is a valuable lesson in many ways. Money is seen as a currency earned, not as a symbol of what you want to portray.
Pay yourself first: So many of my clients are just incapable of spending money on themselves, even at retirement age. Their parents set this example – going without for the sake of the children. Don’t pass this message on to yours.
My parting thought is to give money the attention it deserves. Money should enable the life you visualise for you and your family. It’s a good idea to consult a CERTIFIED FINANCIAL PLANNER® Professional to assist you in planning for your finances.
I wish you many happy courageous currency conversations in the future!