Here are two questions new and expecting parents should ask themselves:
Let me define the terms map and mindset.
By map I mean plotting major markers in kids heads and hearts for them to reference and shape their thinking on money.
For now, we can define mindset as habits, attitudes, feelings and thinking on money. According to Dan Ariely, noted Duke University Behavioral Economist and author of the book, Predictably Irrational: The Hidden Forces that Shape Our Decisions, environments and emotions play a large role in our decision making.
Parents should ask the above-mentioned questions if they want to:
If parents are going to take charge of their kids’ money mindsets, mapping needs to start earlier than many adults suspect, including educators and financial service professionals. Here are a few reasons why:
Here are some additional data and statistics parents want to consider in thinking about kids, money, and financial education.
So, what can parents do to consciously and effectively shape their kids’ money mindsets? Here are three tips:
FIRST, develop a script.
Whether it is entertainment, sports or business, managers, directors and coaches all use written scripts, plans and playbooks to increase their odds of success. Parents should do the same.
Hence, step one is invest time writing down your core money beliefs and messages. Taking this step has important benefits. It clarifies and cements your financial feelings’ and thinking in your own mind. This enables you to communicate what you choose with more purpose. It also serves as a stimulus for you to act on your philosophy yourself. If you are able to better align your thinking, feelings, and behavior on money, it means your kids are going to get more consistent messaging on the subject whether it is what they hear, see, or feel being transmitted from you.
Your script should minimally address four areas: earning, saving, smart spending, and giving. Here are a few simple and empowering messages we share with kids on each topic starting around age three.
We place extra emphasis on the habit of saving money. We do this because the payoffs gained from learning to save extend beyond finances. Learning to save consistently teaches a child discipline, delayed gratification, and goal-setting. It builds esteem. It also helps lead any individual, child, teen or adult, to start asking questions about their money choices. What interest rate is my savings earning? What is investing? Should I be investing? Am I making the right spending choices, etc.?
SECOND, develop a list of vocabulary on money and goal setting you want your children to be exposed to.
One key to this step is not to focus and measure success by whether a young child understands or is able to explain each term. Instead concentrate on how often you can expose your child to the words you determine are important for them to be aware of. Comprehension will come later through repetition.
Also, see if you can become conscious of how you communicate about money. Listen to yourself – what you say and how you say it. What words and emotions do you attach to money? How do you express them, verbally and nonverbally? For example, do you “hate” your job? Do you love sales? Do you celebrating saving and investing?
Your list should include but go beyond the identification and naming of numbers and coins. Your list might include words like:
You may also want to examine and consider making small but important changes in your speech patterns. Rather than say something like, “I cannot wait to take you to Disneyland.” Instead share, “I cannot wait to start planning a trip to Disneyland.”
THIRD, make a list of activities and experiences you can do with your kids that reinforce the habits, attitudes, feelings and thinking you want to map into their money mindsets.
This might include stories, songs, activities, games, arts, crafts, making deposits into a piggy bank, at the bank, or online, playing store, cutting coupons, making shopping lists, doing and getting paid for small jobs around the house, and paying for inexpensive items themselves.
Once you have laid the foundation both in their minds and yours, you can incrementally grow the process to include other subjects like credit, borrowing, planning, insurance, taxes, inflation, etc.
FINALLY, remember education is a process. And, in the case of financial education, it is a process that should take place from womb to tomb.
Discover more about Sam, Sammy Rabbit, their thinking and resources on kids and money at SammyRabbit.com