From Dr. Jane's Notebook

Teaching kids about money

One of the most challenging tasks we face as parents, is instilling a healthy attitude in our children about money. When you think about it, children are members of the underclass in every family. They make the fewest decisions and have the least spending power. As parents, it is part of our duty to teach them about money and help them find a healthy way to earn it.

Here are a few more thoughts on the matter.

Our children are influenced by our attitudes and values. The way that we feel about money will influence our children in both positive and negative ways. Financial discussions which are highly charged with emotion and worry, create anxiety in young people about their future. For this reason, parents choose different approaches to tackling this subject. Some believe in making a full disclosure to their children about money, while others postpone the discussion in the hope that their kids won’t worry. In all cases, parents must realize that unless we consciously decide to do things differently, we will probably end up choosing the same approach as was taken by our own parents. The problem here is that our parents’ attitudes and values were based upon problems of their day, not the 21^st century. Even the best advice from another era may not be helpful to our children in planning their future. I recommend that parents discuss the following question amongst themselves: How do we want our kids to feel about money?

Children tend to inherit our style of financial worry. Financial responsibility is one of the hallmarks of good parenting. For the most part, parents expect to take care of children during their younger years, but we also hope that through various forms of training and education, our kids will become prepared and able to support themselves and their own families.

In addition, with people living longer these days, each of us must be prepared not only to support our children during their young years, but also to help with the support of our parents during their elder years. Unfortunately, many young adults are never taught to include this expense in their long-range plans.

Rather than be coy about this issue, I think it is wise to advise your children and their mates of your expectation that caring for each other is a two-way street in life. When addressed early enough, support for members of your extended family can become part of your children's long-range financial plans for the future. Opening up this topic up for discussion before it becomes a reality, reduces the potential for surprise and may prevent major misunderstandings during times of crisis. When one is given some notice that assistance will be needed, the assistance can be budgeted and contributed with love, not resentment. Even if it never becomes necessary for children to help support their parents, it is a comfort to know that you were prepared to help.

Encourage kids to find a career that they love; one that will love them back! As parents, our job is help our children find suitable careers which will allow them to achieve satisfying and independent self-support. Anyone who has chosen a career path that they don’t like, can confirm the difficulty of getting out of bed and going to a job that they don’t enjoy. The best careers stimulate us to grow, cause us to feel challenged, and provide the financial rewards which are needed to support ourselves and our families. As a general rule, education is directly related to how much we can earn per hour. Thus, our academic choices will often determine whether we will earn $5 per hour, $25 per hour, $100 per hour, or more. When planning their future, it is wise for kids to consider the kind of financial compensation they will want.

Avoid getting comfortable in low-paying jobs. In families where teenagers are expected to go to work early, they must beware of the danger of becoming satisfied with earning the minimum wage. Teenagers, who are satisfied with a paycheck that is just large enough to put gas in their car, may too readily dismiss opportunities for higher education, electing the immediate versus delayed gratification which goes along with further education. Unfortunately, most low-paying jobs typically lack career ladders that might lead to greater opportunities. Especially at risk, are those kids who struggled through high school and now lack the self-confidence to pursue higher education. Many young adults simply need encouragement to seek out specialized training or education programs which are often offered by local colleges and universities.

Kids learn great lessons when they make their own money decisions. As parents, we are charged with the challenge of teaching our kids the value of money. In the effort to help prepare them to make good decisions in life, it is valuable to discuss the importance of money management with your children. But to make the experience even more real, it is even more helpful to practice the art of money management.

Summertime car trips have always provided wonderful opportunities for growth as a family and family bonding. By the time our kids were age 2, my husband and I had learned that it was far more pleasant to travel with children who had a few dollars in their pockets, than it was to endure those embarrassing scenes in stores where your children literally fall to their knees in tears and beg.

When they were small, $2-3 per day in allowance taught our kids how to stretch each dollar and gave them a greater sense of choice and voice during the family vacation. Instead of begging and pleading for gifts, stores became opportunities to do their personal shopping and make some well thought-out decisions. They soon found that purchasing decisions required the use of addition, subtraction and even multiplication in order to predict the amount of sales tax that would be added to their bill. Additionally, they learned that they could save money by sharing expenses on certain items, but best of all, they learned to be generous. To our great surprise and delight, we found that when we empowered our children with their own spending money, they developed a sense of joy and good feelings from acts of sharing. To this day, there is nothing more treasured than the little gifts that the kids bought for us and for each other in souvenir stands around the country. And I’ll never forget those deliciously sticky pieces of their favorite candies which they proudly bought from time to time to share with the family.

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