Parents want to ensure the best for their children, but where does money fit into the picture? How can we help shape them to be financially responsible and confident adults?
Personal financial guru Suze Orman says it’s a matter of being upfront and open with our kids — and having a positive attitude about work and income.
“It is very important that you understand that kids are watching what you do and what you say even when you don’t know they are,” she told TODAY.com. Unconsciously, she said, we may be shaping our kids to fear money.
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For example, think about this common scenario: A family spends a wonderful weekend together, only to have one or both parents returning to work the next day with a less-than-inspired attitude.
“Monday morning comes along and the kids are upset because they’ve loved being with you and what does mommy or daddy say?" Orman said. "‘I love you so much, and I hate that I have to go to work, but I have to make money.’”
It’s a seemingly harmless and even loving remark that can wreak havoc on a child’s understanding of the adult world and money’s role in it.
“You are shaping them to hate money and to hate work,” Orman said, adding that the healthier response in this situation is saying something like, “I am so sad that I have to leave you but I am so happy that I get to go to work so that I can pay the bills and we can live in this house! One day you’ll be able to do that too.” This way, you’re still conveying love, but you’re not making money the thing that threatens it.
There are other critical ways to instill good money habits in your kids — even if you’re a homemaker who doesn’t head to an office every day. Orman advises teaching your children from a young age that money doesn’t just magically land in one’s lap; everyone has to earn it — even kids.
That means doing away with a traditional allowance, she said, and instead giving kids money for various jobs done around the house.
“Why should kids just get money because they’re born and live in a house?” Orman said, who suggests setting up a work-pay system and schedule. "If your kid does this, they get $3, if they do this, they get $4, and work up to $25 — but don’t let them just choose to do the $25 [option], they have to work their way up.”
If you do opt for a work-pay system in your home, you have to be prepared to follow through with it much like a boss. That means if you reach into little Jenny’s piggy bank one evening when you’re short on cash for the pizza delivery guy, you’d better write an I.O.U.
“You can’t borrow money from a kid and not give it back,” Orman said.