teaching children about money

Financial Family: Teaching Children About Money

Ande Frazier

When it comes to money, our thoughts, feelings, and beliefs are bigger indicators of whether or not we will reach our financial potential than a bunch of numbers. And these beliefs usually start in childhood so it’s time to start teaching children about money.  

Think about it for a minute. What were some of the things you heard your parents, teachers, or other adults say about money? Here are a few I hear—Money is the root of all evil. Money doesn’t grow on trees. It’s only money, you can always make more! Like it is that easy. 

All these statements, accurate or not, impacted the way we view money. But there is something else that many researchers are finding. When it comes to learning about money, boys and girls are taught differently.  

Wait!… It is 2020, what do you mean boys and girls are taught differently about money? I know it can be hard to fathom, but there are still differences with how gender plays a role in establishing a strong financial foundation.  

Let’s take for example boys, who are taught to build wealth, know their credit score, understand about taxes and risk. While girls are taught restraint, how to track their spending, and how to create a budget. And the parent tasked with teaching children about money is often the same gender as their child. Moms teach daughters and Dads teach sons.  

This can make for a tricky situation. Men and women tend to view their finances differently. Men are often overconfident about their ability to pick investments. They take on risk faster and are not always good at sticking to a plan for very long. While women are slower to take risks but are more consistent with their plans over time. Women also will evaluate their financial decisions in the context of the big picture, where men tend to be more situational.  

To complicate this even further, women will consider who the money belongs to, which often includes children, spouses, parents, siblings, and organizations. They frequently put themselves last. Men, on the other hand, view the money they make as their own first, only then considering who else would benefit. This can play a big part in not only their own personal financial choices but also on what they are teaching children about money.  

So, how do we move forward as a society in making sure that girls and boys are learning about money in the same way? First, we have to realize that what we do has a bigger impact than what we say. If you are telling your son or daughter one thing, but exhibiting behavior that is contradictory, then they will more likely than not follow your example and discard your words.  

Let them see your strong work ethic. Don’t talk about how hard you work, show them how what you do makes an impact outside of yourself. Having your children understand the value of money, not just in what it can buy, but what it can mean to the greater good is a powerful lesson any parent can teach. Get your kids involved in charitable work. Have them earn money for themselves so they can recognize that when you work hard for something, you may enjoy it more.  

When talking about money, don’t just focus on scarcity, but on possibility too. Exhibiting a grateful spirit in what you do have, who you are, and what is possible can have long-reaching effects well into the future.  

This abundance versus scarcity dynamic is especially important in how we use language. The words we say and the way we talk about money. If we are saying, “we can’t afford this” or “if only I made more money” or “I am never going to be able to save”, then those phrases are being heard by our children. When they hear these phrases, they may think that financial success will always elude them. Or, they may develop the belief that if they do make money later on they should spend it because they grew up never being able to have the things they wanted. Either way, statements like these can be destructive.

Finally, being mindful of creating equality in how you talk about money to both your sons and daughters is a great step. Make sure you are saying the same thing to both and try giving them opportunities to show you they are listening to your advice. Bring up the topic of money openly and freely. Be ready to answer questions. And if you are not feeling on top of your financial game, start educating yourself so you can pass that knowledge onto the next generation.  

When we take responsibility for how the next generation learns about money, we can provide them with a foundation that will have impacts far into the future, not just for themselves but for others as well.