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🚸 How can I teach my kids good money habits? · Money Healing Club Podcast

Welcome to the Money Healing Club podcast.
I'm your host, Rachel Duncan.
I'm a financial therapist and art therapist, and you've come to the softest place to land in personal finance.
This podcast is for education and entertainment purposes only.
For help with your particular situation, please seek help from a licensed professional in mental health, taxes, and finance.
Here, we talk about all the things we don't usually say when we talk about money.
Let's begin.
Before I get into this episode's really good listener question, I want to make a note about episode three, which is the previous episode.
In it, Angie Fitzpatrick and I talked about, at the beginning, broadly about women and pay and work and some interesting research involved in that.
And I just want to acknowledge that Angie and I got caught up in our own lived experiences as cisgendered women in heterosexual relationships and as parents.
And we didn't really acknowledge that's a very narrow subset of, women, we also, Ended up excluding and not really addressing the lived experiences of women of color, non binary folks populations, among others.
I want you to know that I'm planning future episodes that will explore other intersectionalities of how money impacts us.
I want you to know that.
I realized I had missed an opportunity and a responsibility to to really outline that my experience is a narrow one, mine and Angie's, we got a little caught up in the moment of getting this podcast launch.
So I apologize if you felt left out of that conversation.
As this podcast continues to grow, I'm going to do future episodes that really look at the intersectionality of all these different slices of life that money impacts from race to gender, to nationality, language, religion, age, all of it.
So if you have a particular question along those lines, Please go to money healing club.
com slash podcast, where you can easily leave me a voice memo from your browser.
Also, if you know of someone who could speak to their particular lived experience with money who might be willing to be on the show, please feel free to connect us.
You can email me at howdy at money healing club.
com.
Yes, that's howdy because I am a proud Coloradan.
All right now on to the show.
Um, uh, Uh, Hi, Rachel.
I have a question about teaching good financial practices with your kids.
And by that I mean, how can we as parents give our kids good advice and teach them responsibility about money, specifically with allowance.
Do you have any tips on how much allowance to give kids and when to start doing that? Thank you.
I myself am a parent.
I have two children aged 10 and six.
And I think a lot about how my money beliefs were shaped by what I saw my parents do as well as the things they specifically taught me and were intentional about.
So I am sorry that this answer is not as short and snappy as you might want because guess what? We have to do some of the harder inner work as parents.
If we want to change a family pattern, be a cycle breaker in any kind of way, we have to really understand where we're coming from and heal that part of ourselves.
Because if we don't, and we try to teach our kids something that maybe we were not taught, we could either overcompensate for it and get maybe very rigid.
Or we just continue to follow the same pattern and double down or are chaotic and inconsistent, which really, really can backfire.
So here's the thing.
Research has shown that a child's core money beliefs are pretty well developed by age seven.
Isn't that interesting? Because most seven year olds aren't even handling money.
That is based entirely on what they are perceiving around them.
It's based entirely on the people around them, the adults mainly, and their beliefs, attitudes, behaviors, interactions with money.
It is what the children see.
So knowing that I think the biggest financial lessons we can give our children is in our modeling of financial behaviors.
So let's rewind.
Let's go way back in time.
I want you and anyone who's listening, who's a parent to think a little bit about what did your parents teach you about money, the good, the bad, the confusing.
For me, I think the good thing that my parents taught me was to be really watchful about money.
Times were pretty tight for me and my parents.
And there was a lot of talk about, sticking to the shopping list and saving up for that car or that repair.
And my parents were relatively open with me.
They didn't burden me with any of these conversations, but they were pretty open about chatting about these things at the dinner table or in the car.
So I do think that that taught me a couple of things.
It taught me it was okay to be watchful about spending.
I think it taught me that money was not something to be scared of.
My dad also did his taxes himself and he would have me double check his addition because it was all paper and I got to use that cool calculator, you know, with the paper tape that would make all the sounds as you clicked away at the keys.
And I just love that.
That was, that's how I fell in love with calculators and office supplies, actually.
But I think I learned that I could be involved in money and it was safe.
Now, on the other side, you know, my parents were educators, they had pretty limited income and they really didn't know other ways to make money.
And there is definitely a belief of we're poor, but proud and only bad people pursue wealth.
And there's sort of some bigger themes that are really probably more tied to class than anything that I definitely absorbed.
What wasn't talked about that you wish was talked about? Did you notice that the children in your family were treated differently based on gender and money? Do you wish maybe your parent had said simply, money's tight this month instead of freaking out and yelling at everybody about how expensive the birthday party was? I'm just coming up with examples here.
Okay.
So here we've been dissecting what your parents taught you about money, either directly, indirectly, and also what they taught you by what they didn't say about money.
Now, as a kid, what choices did you have about your own money? Did you receive allowance? Did you receive money for work? What were your opportunities to interact with money? What did it feel like? Now that you've done a big trip down memory lane with money, come back to the present moment.
Now that you're recognizing both the helpful and unhelpful scripts in your financial upbringing, what new financial lessons do you want to adopt for yourself? See, we're not talking about your kids yet.
We gotta talk about you.
Is it that you witnessed your parents have a lot of tension, anger, disagreement, fights about money, and that was hard for you? You don't want to carry that through as a parent yourself.
Did you witness your parents have very different financial behaviors and hide that from each other or weaponize it against each other? What new lessons do you want to adopt for yourself? Do you want to have a more open communication about money with your partner? Do you want your children to witness that? Do you want to have more in savings than your parents did? If you want money to feel very practical and real for your children, Maybe it's time for you to step into the reality of money for yourself.
Do you have some magical thinking going on around money? And on the positive side, which scripts in your financial upbringing are supportive that you want to continue or amplify with your kids? Did you enjoy watching a parent clip coupons before going to the store and kind of gamifying the shopping experience? Was that a positive memory for you? Is that something you would like to continue for yourself? Okay, so after you've really thought about the good and the bad and the neutral and the chaotic from your financial upbringing that you want to change in your own financial life, now we can turn towards your children.
But here's where I think you need to build a bridge between your own work and teaching your kids financial literacy.
I want you to let your kids know that you're trying to change a habit and you want their help.
Kids love correcting their parents.
This can be a really fun way to get everyone on board with thinking about money, making it playful, And teaching your kids that you can change a habit, that you can look at something and say, gosh, I need some help getting better with this.
So I have a few scripts for you to try on.
I will put these in the show notes.
You can say, hey, I'm wanting to spend less money, so I need your help reminding me when we're at the store to stick to our list.
Can you help me with that? I'm going to start giving you some limits on how much we spend.
It's called a budget, and I'm doing it for myself too.
Do you want to see our family budget? Lately, we haven't been watching how much we've been spending.
What ideas do you have for how we can all cut down on spending? And you've got to be open to all responses here.
You can say, I'm going to set up a yard sale, or sell clothes, or put things on Craigslist.
What ideas do you all have to make some extra money? Are there things you would like to sell too? Now this is my personal favorite that I started doing last year.
Let's set aside a special day every week or every month for getting a treat.
I need you to remind me so we can wait for it and it will feel really special.
So this has become Wednesdays for us.
And my kids remind me, they covet it, and a magic thing started happening they stopped asking for treats and random stuff throughout the week because they knew Wednesday was happening.
And it has really smoothed out our cash flow as well as brought the kids into enjoying the moment and kind of planning ahead for a splurge.
Another fun thing to do is say, I'm going to set up a new savings account for our family vacation, and you're joining me at the bank to set it up.
Try to bring your kids along to some of these boring adult things at the bank.
Again, remember they are a sponge picking up everything that's going on around them, involve them in a safe way in what you need to do to manage the family's finances, just these little bits.
They don't even have to literally be involved, but just being in the room will help them learn that money is a safe thing.
Okay, now I want you to think about age appropriate involvement in money.
This really varies for little kids and older kids and teenagers.
In general though, I would avoid doing big formal family meetings or a big sit down, things like that.
I would find these micro teachable moments instead to bring up spending, saving and earning decisions with your kids.
Car rides are perfect for this.
If one of your goals is to have more open communication about money, make sure it's open between everyone in the family, not just top down.
Implement shared financial guidelines for your family, like treat day.
These things build consistency, anticipation, and awareness.
And make sure that parents and kids follow the same guidelines.
Try to avoid hypocrisy.
Like if you tell your kids, Oh, you know, we're not going to buy those new clothes.
And then you go and order a bunch of stuff online that gets delivered like a bunch of new clothes online.
You know, it, it just sends a confusing message.
It sends a double standard to kids and they will pick up on it.
I also want you to stay curious and be open to healthy risk taking with natural consequences.
Now this is tough.
For example, a script that's come up in my family, I know that toy looks great, but I remember you spent your allowance on that video game last week.
What ideas do you have? And they may have a tantrum, right? This is the ongoing lesson That money is real.
If you spend it on one thing, that means you have less money to spend on other things.
That delayed gratification is usually a good financial practice, and that it's okay to spend money in healthy ways that are mindful and intentional.
Let your kids and yourself sit with the consequences of mistakes, of changing your mind about things, Flexibility is really an underrated financial skill.
Consider being open about some financial missteps that you've made.
Let's say you buy something and then you find it was much cheaper somewhere else a little bit later.
And you're like, dang, you know, maybe share that with your kids.
Like, you know, I really should have researched that a little bit more.
Look, I found it for 20 less at this other store.
And share with them, are you going to go return it? Are you just going to take that as a learning lesson and go on? Share your process with them in age appropriate ways so that they can see that we can all rethink things and pivot and learn from our behaviors.
Please, please, please avoid guilting yourself, your partner, and your kids around financial missteps.
They are learning opportunities.
We can be real about the feelings.
Absolutely.
If we lay on layers of guilt, anxiety, conflict with financial decisions, that could really cause some harm.
If your kids are starting to associate money with danger, with tension, with conflict, we want them to know that they are fully capable of making financial decisions, learning, recovering from missteps, and that they'll still be loved and accepted.
So we got to walk that talk too.
Hey, if one of your goals is to reduce impulse spending for yourself and your kids catch you in the act of impulse spending, let them do that.
Let them have that win.
Don't get defensive.
You guys got me.
Ugh.
I'm so glad you're watching out for me, right? They will love that.
They'll know that they can talk with you about money and they'll see their parents try to work on their own behaviors and improve their habits.
One of the big challenges I think we have as parents today is that it's really hard to make money concrete when it's all digital.
And I think what's extra problematic about it is that like a 7 or 8 year old is still a concrete thinker.
They're developing some abstraction, but they're still like, the object in front of them is the thing that exists.
If it's not in front of them, it doesn't exist anymore.
So I think what's tough is that we don't deal with cash and coins like we used to.
We're, probably in a hybrid place right now and it's just getting ever more digital.
I have not fully reconciled this yet, with kids.
But I do continue to use cash with my kids.
They love taking out of their piggy bank and adding it up and feeling it in their hands.
And then if they want something that is a digital purchase, then I put it on my card and they pay me.
So it's a little bit transactional, but you know what? It's fine.
It works out fine because I want them to feel the pain of giving me their money, seeing their piggy bank go down, and making decisions about what they're going to buy.
Now, we encourage our kids to shop around for things and, If they're not able to use their cash to buy something that they want out of their allowance, then we foot the bill and they pay us.
I know that there are apps and things like that to manage this, and we have not gone there yet.
But I think this way actually works fine and is developmentally appropriate for how old they are.
As they become teenagers.
I will probably look at more digital options, with them, maybe having a debit card, a linked debit card or something like that.
So you asked about how much allowance I really can't answer that for you, but do make it predictable because kids with predictable allowances tend to build lifelong money habits.
What I would say is this have a predictable allowance with opportunities for them to earn more that are very clear about what those opportunities are and how much they get for that.
I would not make the base allowance negotiable.
It would not be an appropriate punishment or discipline tactic to take away that month's allowance because of bad behavior.
Make it like universal basic income.
They get it no matter what.
Encourage your kids to make their own spending decisions and learn from those experiences.
I have found that my kids naturally Enjoy the process of saving up a little bit that they can get something better when they have saved up for it That's a very basic principle of personal finance if they want something in the moment They can choose to spend their money on it And then if they don't have money for something later on because they made that other maybe more impulsive decision They sit with that discomfort And what's great is then we can talk about it.
They can say, can I earn more money so I can get that thing? Or, let's look at the calendar, when do I get my next allowance and I can plan for it and wait for it.
When we can defer gratification, the better we can sit with a sense of tension.
That tension is okay, we're still safe, everything's alright.
Another reason I just love allowances is it gives families a chance to talk about money frequently and informally.
When it comes to charity, I want to encourage my children's generosity.
They are naturally very generous and contributing financially is something that we as a family do.
Want them to make their own decisions about that, but I also want them to hear my husband and I talk about contributions and spending decisions, even if they're going to be involved in that or not.
I want them to hear about it.
And there are causes that my kids feel really passionate about.
And so there are times where they want to contribute to that and we make that happen.
And I let them decide how much.
My son has also put some of his 1 bills from his allowance in the car.
And he chooses when he wants to give it to people who are asking for money as we drive in our car.
A lot of my clients and people who come to the money healing club are trying to get better with impulse spending.
So if that's you and you want to try to teach your kids better financial habits, less impulse spending, but it's something you still need to work on.
Just recognize that impulse spending often stems for a need for connection and comfort in the moment.
So as you work on identifying some of the deeper needs that you might be trying to fulfill with impulse shopping, recognize that in your children too, and you can gently and lovingly redirect them toward non monetary ways to fulfill their present need.
Maybe they're tired, maybe they're sad because of a friendship dynamic, maybe they feel discouraged at school.
Well, yes, going and getting a treat does feel great.
It's truly about feeling connected and fulfilled.
That's what we're wanting in the moment that impulse spending is a false completion of that stress cycle.
I talk about this more in episode one.
Okay, so that was a very long answer to a very straightforward question.
But just to summarize, reflect on the financial lessons you learned as a kid, both the good and the bad.
Reflect on the financial habits that you yourself want to adopt right now and see how you can kind of include your kids in your own healing.
When it comes to allowance, make it consistent, light and open to communication and allow your kids to struggle and make mistakes.
I know it may sound really scary, but money doesn't have to be scary.
We can open up in little bits.
It doesn't have to be a weekend warrior situation.
Little bit by little bit, the more open and honest we are with the people we trust around us about what they need.
decisions we're making about money, about what habits we want to change, they will grow and learn from watching you.
It's such a cool opportunity for them to learn to trust you and trust themselves with money.
I hope you can take this as an awesome money healing opportunity with your kids and for yourself.
Thanks for listening to the Money Healing Club podcast.
You can find resources and links from this episode in the show notes at moneyhealingclub.
com slash podcast.
If you enjoyed this episode, you'd probably really love my free email course on curbing impulse spending with compassion and mindfulness.
Check it out at moneyhealingclub.
com slash challenge.
Do you have a question about how financial therapy might help you? Leave me a voicemail at moneyhealingclub.
com.
And I might answer your question in a future episode of the pod.
We are in this together and I really appreciate it.
Uh, uh, uh, uh, uh, uh.