7 Steps to Raise Money Managers

Posted on April 13, 2016

We are surrounded by mixed messages about money. Is it the lack of money that is the root of all evil or the love of money? When money is lacking, relationships suffer. Spouses bicker about expenditures and struggle to make ends meet. When money is in abundance, relationship may suffer, too. Long working hours and managing employees as well as finances can tax family life. As much as we love the comforts that money buys, we are often conflicted about the discord that accompanies it.

The sad part is we take this love-hate attitude toward money into parenting. Because of it, we avoid talking to kids about money with excuses like “it’s too early” or “we don’t want to raise “money-minded” children.”

In a recent parenting workshop, a parent posed this question: “When should I start talking to my children about money management? My wife says that, at five, my son is too young.”

Another parent said, “My son is ten and really wants to start earning money. But I only want him to focus on school right now and not get distracted with money management.

A father added, “My wife has zero self-control when it comes to spending. Yet the minute I start discussing money matters, she says, “Not in front of the kids.”

A mom jumped in: “We barely know how to manage our own money, I don’t think we should be the one’s teaching our son about it.”

Parents, if you don’t take the lead in opening up the dialogue, then no one else will! There are two important life skills that are currently not taught at schools—emotional intelligence and financial intelligence. Both should be your primary responsibilities.

So how should you start this sometimes intimidating process?

Begin by getting comfortable yourself! How do you feel when the topic of money comes up? Take a personal money-management emotional inventory: Do discussions of bank accounts, budgets, savings, and spending wear you down? What is your tone of voice? Do you feel anxious? Does discussing money cause a rift in your relationship with your spouse?

Remember that your belief system will be inherited by your kids. If there is pain attached to money talk, then they’ll feel that, too. Reevaluate your relationship with money. Take money management classes or read financial intelligence books. Find a counselor or life coach, if you need to. Meanwhile, if you feel anxiety when money is discussed, take a few deep breaths and work through the feeling. Keep a personal affirmation handy: “I am surrounded by abundance. There is plenty of money in this world, and I can have as much as I allow myself to.”

Now that you’re ready to plant the money seed effectively for your kids, here are seven steps to help your child cultivate it.

1. Play money: Give your child $100 in small bills, so that he or she can start playing with money. Break it into a $50 bill, a 20, a 10, and a few 5s and 1s. Don’t draw boundaries around what the kids are allowed to do with it. If they want to invest in $50 worth of candy, don’t say no, unless they plan to eat it at bedtime! Nothing is a bad idea. The money is theirs now.

2. Chart spending and income on a spreadsheet. Yes, help them create a spreadsheet. There are many downloadable child-friendly versions online. Keep to the basic and simple ones. To make money, one must work hard and work smart.

3. Share money: Have your child pick a day a month where he or she treats a friend or a sibling to a meal. This allows them to experience the good beyond the “me” and “mine.” There truly is no joy in money if we hoard it. Be sure to encourage children to put the experience into words. If necessary, prompt a dialogue with statements like “Did it feel good to treat your friend?” or “Money shared is always money well spent.”

4. Give away money: Have you child pick a day a month to give some of the money away. Let them pick the cause and the amount. No cause is too small, and no amount too little. This is the best way to understand the life rule of “the more you give, the more you get.” Tell your children to watch for abundance to flow in from somewhere else. As I said in my last blog on financial intelligence, the energy of money is no different than the energy of love, it multiplies as we share it. Do remind kids to record all money movement on their spreadsheet.

5. Spend money on oneself: Schedule a shopping spree one day a month for your child to buy whatever he or she wants. Money buys us the independence to satisfy our needs and our wants. Let children satisfy their wants within their budget. This will bring alive the concept that when we earn, we are free to buy what we wish. When shopping, talk about how the sales from the store support individual jobs as well as global markets. (For example, when we buy a remote control car from Target, we contribute to the pay of the employees who work here, the factory workers in China who make these cars, and everyone else in between.)

6. Understand the source of money: It is not a bank or a business that produces income. The core source of money is authentic connections and relationships, which are built through effective communication. Helping a child build character, morals, and social-emotional skills is a great way to improve communication skills.

7. Be clear about the difference between money and wealth: One day a month, help your child do an inventory of things that money can’t buy, such as time, hugs, and laughter. Explain to children that this is your wealth. This is the stuff of life that is free and priceless. While money can make life comfortable and fun, it is wealth that brings us joy. When we encourage children to get comfortable with money, then we are contributing to their life skills and success. Remind children often that having money does not make us entitled, but we are all entitled to have money.

In Joy,

Roma