Let’s vow not to scare our kids about money this Halloween.
We all enjoy giving a good scare, especially when playing a silly “trick” on our kids. Make sure your “scare-tactics” focus on goblins and ghosts and not on our often ghastly behavior around money. Unfortunately, I’ve seen my fair share of scary financial situations, which have really messed with our kids’ perception of money. What are some of those instances that will haunt the financial lives of your children? Let’s try to unravel some of these messes and messages to turn the “Boo” into “Do.”
Scary Thing #1: Making Money The Biggest Secret In Your Family
If you are like most families, money issues are the biggest secret within the household. Your kids may ask what something costs, what you earn, or how much the bill was for dinner at the local restaurant last night. Your knee-jerk reaction may be, “Don’t ask about money, it’s impolite.”
Hold on! Do you want your kids to have a healthy attitude toward money? Do you want them to understand what it can and can’t do? You never want them to confuse “net worth” and “self-worth;” however, if you never discuss it, or hide behind “being polite,” they will ultimately learn about it from friends. Those lessons may not reflect your values.
Buck up and make the money part of your life, the business part as well. You want to teach your children to grow up to be financially responsible, so start talking. Begin with the small things. When they are about 10 years old, introduce them to some of the household bills and work with them to understand that there are costs involved with, for instance, electricity. It just doesn’t come with the house. You are not practicing recreational yelling when you pounce on them for having a conversation with the refrigerator door open; there is a real cost to that behavior.
Challenge your kids to reduce the electric bill by unplugging cell phone chargers, turning off the TV or computer when they leave the room, and, yes, only opening the fridge when they know what they are looking for. They can track the savings and you can decide whether or not to split the windfall with your kids each month.
When there are teens involved, you can discuss your real budget, unless you feel it will scare them. Your goal is to allow them to understand how the real world of money works. Show them your pay stub, if you are comfortable. Explain that you are entrusting them not to share this knowledge with anyone. It could make their friends feel bad; this is information that should be kept within the family. Show your kids what is taken out for taxes, Social Security, and benefits like a 401(k). Explain what you are saving for in the future.
Scary Thing #2: Fostering, “The I Want, I Want Syndrome ”
You know how your kids can nag you for something they want? Well, if you give in and just say, “Yes,” you are supporting the notion that they are entitled to get what they want if they whine enough. It may work when they are little ones, but it probably will not be okay with you by the time they are teenagers, and hopefully not as they move into adulthood.
Nip this behavior in the bud when they are young. Show them that the only way to get money is to earn it. Set up my simple allowance system that shows them how to do chores (work) to get money (payment). The caveat is that there are two types of chores within any household; Citizen of the Household Chores, where they do not get paid, and Work for Pay Chores, where they do get paid.
Mom and Dad, you are the CEOs of the household, so you decide on what chores go into which category. In my home, my kids had to keep their own rooms free of breeding diseases, and they didn’t get paid for that. They also had to learn respect for public places in the house and clean up their toys and stuff. Work for Pay Chores taught them the life skills that they needed to run a home, such as dusting, recycling, loading and emptying the dishwasher, doing laundry, vacuuming, making a shopping list, etc.
Next, comes the pay. I recommend that you pay kids their “age” per week; a 5-year-old receives 5 dollars and a 10-year-old receives 10 dollars. With their newly-earned income, should come the habit of budgeting. Get four clear jars or envelopes and label them: Charity (10% goes into that jar); Quick Cash (30% goes into that jar to go for instant gratification spending); Medium Term Saving (30% goes into that jar for kids to push off instant gratification and save for something more expensive); Long Term Saving (30% goes into that jar to save for college).
Scary Thing #3 : Fighting About Money In Front Of The Kids
Money problems bubble up within any family and they can cause a tremendous amount of stress. We have to deal with financial issues every day of our lives. These issues can also be attached to subconscious baggage that we carry with us from childhood. The Wall Street Journal noted; “That’s because when couples argue about how to spend money, they’re not just debating the issue at hand, such as how much they can put on the credit card each month, or whether they can really afford that big vacation. They’re giving voice to subconscious anxieties that even they may not be aware of—bumping up against the unarticulated fears of their partners.”
The bottom line? Your arguing causes your kids to become stressed out, and thus they will start to develop their own “scary” relationship to money. So, “let it go” when you are in front of the kids; don’t frighten them.
The money part of your kids’ lives should be healthy and not scary. Come clean with them about how money works. Remember the words of Lloyd Douglas, the famous minister and author who said, “If a man harbors any sort of fear, it makes him landlord to a ghost.”