Most of us grow up thinking that we will be different than our parents. We tell ourselves we will raise our children by culling the best attributes that our parents may have had and add them to our own updated values. And this might work some of the time. But when it comes to money, we can’t seem to shake the influences our parent’s had on us. So that leaves us wondering exactly what are we teaching our kids?
I’m sure that most parents if asked the question of what kind of parent they are would suggest that they are doing the best for their kids. They give them the obvious: shelter, food clothes, morality and ethics. But chances are, you are also giving them your parent’s attitude toward money.
On a personal note, I should mention that my parents were a product of the Great Depression. And this has had a lingering effect on the way my wife and I have raised your kids. her background wasn’t all that different with one exception: her family finances were not well handled with good times, followed by bad. So she is adversely impacted by the idea of debt, which is a good thing.
Growing up in the Depression infected my parents with a deep distrust for the stock markets, the ability to pinch a penny when it seemed almost squeezed dry, and of course, this was all done with absolutely no language, except for body English. To this day, I see a double bagged tea bag as representative of two cups of tea, an Alka Seltzer pack as two doses. You grow up watching this sort of stuff and it affects the way you think about money, even if they never suggested they were pinching anything.
And probably the worst example of all, we never really seemed to be in want of anything. Not that my parents were free spenders. In fact, they were quite the opposite but we never seemed to be without. But they maintained the illusion that they were doing okay financially when in fact, they made incredible sacrifices in order to keep the facade.
There is an incredible likelihood that we are raising our kids based on values about money that our parents gave us, even though we said we would improve on how they raised us. How could this have happened?
I’d be willing to be that there are two groups of child-rearing parents in the reading audience that are raising their kids based on the way their parents grew up. Those who were influenced by their own parents’ experience with the Depression or those who grew up with post WW II parents. The former knew nothing but money as a precious commodity and poverty as something that lurked behind every financial decision and the latter as having grown up in what seemed to be a very prosperous time. So one set of parents taught austerity; the other taught the exact opposite.
And now, we are parents of the children who are growing up in the days following the Great Recession. And we are missing an opportunity that we should be taking but probably aren’t.
Just like my parents influenced my outlook on waste, or what appears to be waste, we can influence our kids future outlook about money without too much effort and the result will be this shadow voice in their heads for years to come. We should think about how we talk about money first.
Do we talk about money or do we simply show signs of emotions at either end of the spectrum? In other words, do we either look like we are having an issue or do we hide it? Our kids know the same way you knew and will do exactly the same later in their life as a parent. If you use cash as a reward, they will do the same. If you think of spending as irresponsible, they will do the same. If you saw money as a means of control, then they will use it the same way
Do you give your kids the impression that everything is okay financially when it might not be? Three things happen here and none of them good. Your finances impact their finances. Your retirement impacts how they will launch their own financial lives – if you haven’t done a lot then you will probably one day need them for help. And most importantly, they don’t see money as the glue that holds their world together. Not that it should, but in their mind, not knowing what it costs to keep their version of the world intact – the electronics, the clothes, the extracurricular activities, gives them a false sense that things just happen.
And one last thing: if your parents are beginning to age, then now is the time to talk about their financial situation. If anything, it will be a mirror of not only how you see money, but how they taught you to see it as well.
