It was learning my daughters would grow up and reflect my behavior—to a T—that was most surprising to me as a new parent. I discovered this only after my oldest, Allison Rose, was “reflecting” something in me that was, well, not worth reflecting.
It is amazing what mimics children are. Even as babies, they learn to smile and say their first words from our example.
So is it any surprise our children’s money management will generally reflect our behavior? Whether we realize it or not, from Day 1 we are teaching our children our attitudes about money through our actions—as well as through the influences we allow in their lives.
My own children have taught me this over and over: Kids do not listen to what we say. They observe what we do. Our actions are the education they will absorb.
Stop and think about how you and your spouse talk about and handle money now. Those are the conversations your kids will file away for later use.
How are bills paid in your home? Who pays the bills? Is there a reason for that choice? How is saving handled? Who makes investment decisions? Who handles donations? How do you use credit and cash? What are your values relating to money?
Sit down today at the kitchen table and go over these questions with your partner. See if you would be comfortable if your children grew up and handled money the same way you do now. If not, make some changes now while you have time.
Toys teach lessons, too
You, as a parent, are the teacher who will most impact your child’s life. But watch out for interlopers—such as toys and advertisements—that will try to teach your children bad money habits.
Years ago, I was in our basement with my girls and spied two “Shopping Barbie” dolls. Each doll came with all the shopping essentials, including a Barbie-size credit card.
It was a tiny—but very realistic—MasterCard. Each time Barbie swiped her card through the cash register, you would hear: “Cha-ching. Credit approved.” (I guess credit cards are never rejected in Barbie’s world.)
Searching further, I found a toy cash register with a Visa card. The newer version of this cash register now has a credit card labeled “Power Card,” which is a powerful suggestion about credit to kids just learning the ropes.
Kiddie credit cards
Credit card marketers are savvy enough to know early branding means future loyalty. So they work hard to place themselves into our children’s toys—and their hearts and minds.
I removed the offending credit card toys until the kids were old enough to have an intelligent conversation with us about credit. By the time they were ready for that, they were no longer interested in the toys. But at least they had not been exposed to the “credit approved” message on a daily basis while playing.
These days, it’s not just toys. Real credit and debit cards are now available to our youngest children. MasterCard offers a Hello Kitty debit card for 10- to 14-year-old children. According to the company’s Web site, it gives kids the opportunity to “shop ’til you drop.”
This is no longer play. This is the real thing. These cards allow very young children to learn how to transact with plastic, not cash. This is a huge mistake.
Cash teaches life lessons that debit cards cannot. Both my girls get their allowance in cold, hard cash. I give them some large bills, some small.
My dear Amanda has felt the pain of losing a $20 bill. She will never make that mistake again. I, as her mother, could have told her a million times to be careful with cash. But the best way to learn is with your own money. Now she will no longer bring anything larger than a $5 bill to school. I love it when life works out that way.
From the day our precious new babies arrive, we are serious about teaching them everything they need to know to survive and thrive. We show them how to take care of themselves by brushing their teeth and washing their hands. Over and over we explain to them how to share and play fair.
The list already is long, but I urge you to add one more thing to it: Modeling behavior that will help your kids learn to be good stewards of money.
Susan Beacham is the founder and CEO of Money Savvy Generation, a financial education company that provides innovative products and services to help parents and educators teach children the skills of basic personal finance, www.MoneySavvyGeneration.com. E-mail her at [email protected]
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