I recently heard on NPR a story about how our parents play a huge role in our money potential and attitude. “Kids who said they spoke with their parents about financial matters actually performed more responsible financial behaviors.” according to Joyce Serido, a researcher at the University of Arizona, Tucson.
Now you may be thinking “Oh no – here we go – blaming our parents again.” While it wasn’t much of a surprise, I want to focus on the positive, what we can learn from this and do different.
* If you have children, have conversations about costs of living, grocery shopping and basic saving and investing. I just opened a mutual fund with my 8-year old daughter. I’m still trying to explain why the market goes up and down but we are starting somewhere.
* If you don’t have children (even if you do), examine your parent’s conversations about money. Did they talk about money at all? Did they tell you “you good with money”? Did they teach you about budgeting or investing? Most of us answer “No”. Just realizing our past can be a huge part in moving forward and making money changes.
* Give your children an allowance – and that’s it. Let them spend it – almost – any way they want. If they run out, they are done with spending money for the week. It is the best lesson you can teach them. As the research from University of Arizona pointed out, by talking about money with your children, they are “more likely to make more responsible financial decisions when graduate from college.”
* A client recently shared her mother didn’t work, always asked her father for spending money and therefore had no control in their family. Perhaps this is an extreme situation – but talking about money on a positive basis with your family and friends is an integral part of feeling in control of your money situation.
Share lessons from your parents, and, perhaps, lessons you’ve learned as a parent below.