Have you ever noticed that not all of your children behave the same way with money? One is a big saver, hanging on to every dollar. Another’s allowance is gone within three days. One is really independent, babysitting or mowing lawns to earn money. Another wants everything, wants it now, and wants you to purchase it.
Research shows money beliefs start early in life. The lessons we learn as a child often stay with us throughout adulthood. Chances are your children are already displaying their money “personality types.” So what can you do to provide valuable guidance and education to help them all find their way to financially smart behaviors?
Here are a few suggestions:
Set up a family fund.
Create a savings account for a specific family activity or purchase. Maybe it’s for a family vacation, or a new computer, or money to take care of a new dog or cat. Everyone contributes. This way your son or daughter has “skin in the game.” For the child who wants everything, it teaches them the importance and pride of being a participant rather than just a recipient. Another important lesson is the value of setting aside money to reach a longer-term goal.
Create a back to school budget.
Decide on a set amount your child can spend on back to school clothes and supplies. This is especially great for parents who are really tired of either constantly saying “no” or “(sigh) alright.” Once the budget is set, it’s up to your son or daughter to decide what’s most important to them. It’s a great way to help the “I want it and I want now” child prioritize what they really need vs. what they just want at the moment.
Create a “what do I want to get” and “what do I want to give” list.
Some children are naturally focused on helping others, or animals, or are passionate about certain causes. Some are extremely goal oriented, motivated by competition and achievement. They all win with the get/give list. It’s a prioritized list of what your child wants/needs, and what they want to give, whether to a charity, or fund-raiser, or other project that they are passionate about. It gives them an early taste of making a difference in the world. It also helps them with a feeling of achievement as they check off their own list of goals.
Determine your own financial personality.
How do you feel about and handle money? What lessons are your kids learning from you? As part of York Traditions Bank’s Her Traditions, we’ve created a tool called the Financial Personality Indicator. Take the Indicator today! It will provide some real aha moments about how you act and feel around money. You can use that insight to better understand your own money behaviors as well as those of your children.