Thursday, March 10, 2011

What are you teaching your children about money?

Never tell children that their parents are wealthy. Kids who grow up thinking their parents are wealthy often learn to live like they are.

Teach your children discipline and frugality. These are values held by most financially successful adults. Yet, kids can’t learn them on their own. Who will teach them if you don’t?

Children shouldn’t realize you are affluent until after they have established a mature, disciplined, and adult lifestyle and profession. It’s better that they learn some things on their own.

Minimize discussions about inheritances or gifts. Parents sometimes forget these talks, but children don’t. Many years later, these seeds can grow into large family conflicts.

Never give gifts to adult children as part of a negotiation strategy. Bribes usually backfire with toddlers – and adults too. No one likes gifts with strings attached.

Stay out of your adult children’s family matters. Adults make their own choices, and you should let them. All children resent interference.

Don’t compete with your children. Adult children sometimes hold different financial values than parents. Money may be less important to them than other things – education, status, happiness. Let them be.

Remember that children are individuals. Don’t try to equalize nature’s inequality with money. It rarely works, and siblings resent it. Respect each child separately.

Emphasize achievements, no matter how small. One parent taught his son, “I’m not impressed by what people own. But I’m impressed with what they achieve.” Guess what? The son achieved a lot, including financial success!

Tell children that there are a lot of things more valuable than money. Most of us know this, but few emphasize it. Yet, it’s one of life’s most important lessons. How can anyone be happy without this knowledge?

I grapple with these issues regularly. All of us learn early financial values from our parents (even by default). Most of my clients learned both good and bad at the “family school.” Sadly, some never overcome bad lessons.

What are you teaching your children about money?

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