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Friday, September 4, 2015

4 Money Mistakes Parents Make



We've all heard these statements growing up, most likely from our own parents. Most say it's not polite to talk about money, but then how will our own kids ever learn to be responsible with it?

The challenge of finding the right system to teach our kids about spending, saving, and giving can be overwhelming. Piggy banks? Allowances? Money App? Oh the choices...

Well, here to help us with our financial fiasco is Justin. Financial Planner by day and father to (soon be) four boys at night. 
While experiencing an I Guess Im Due money moment in the toy aisle, Justin realized he was doing the whole "money thing" all wrong with his kids. And that's where his idea of Small Change was born; a site to help parents teach kids about money. Enjoy his tips to help us avoid the 4 Money Mistakes that parents make...

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As a father of two (soon-to-be four) boys, I knew there would be parenting challenges. But the one scene I never anticipated, was turmoil in the Target toy aisle. That's right, the toy aisle became my biggest nemesis. You see, I am a Certified Financial Planner (TM) by trade and for the past 12 years I have helped people with their money. I pictured when my oldest son, Beckham, was born that he was going to have the financial wisdom of a Warren Buffet, the business vision of a Steve Jobs all wrapped in the charm and likeability of a Brad Pitt.

He would be superhero-esque in his ability to interact with money. Can you imagine my disappointment when, despite all my best laid plans, all we did was fight over Batman action figures. That's right, the money guy's kid experienced the toy-aisle tantrum.

It started out with the task to buy a birthday present for a friend. We entered the toy aisle which possesses a black hole for manners and all sensibility. We quickly found the gift, but then the descent began:

My son's last rational thought: Oooh, Dad, look at that Iron Man.
Me: Let's go bud, we've got one just like it at home.
Son, now determined to find a tiny difference: No, Dad, this one has a blue helmet... blue is my favorite color!!! (What a startling coincidence, I know) Can I get it?
Me: (oh great... I don't know. You have a jar at home... I have no idea how much money you have... better diffuse this situation for now) "Well, you have some money at home, and I'm not sure you have enough to ---
Son, knowing where this is going: DAD -- WHY CAN'T I GET IT??? I NEVER CAN GET ANYTHING <followed by tears, a scowl, and a refusal to listen to anything else>
Me: Let's talk about it when we get home... come on, we need to go.
My son, now possessed with super powers, cannot be moved out of the aisle. I am flooded with embarrassment and confusion why his ninja-like upbringing has imploded and left this angry shell of a person in its place.

The toy aisle tantrum laid waste to all my plans. So what went wrong? I have had some time to think about why these situations happen and here are the 4 mistakes I feel parents make teaching children about money...

1. We start with the wrong idea

Money is values first. It's not primarily a skill or a knowledge, while there are obvious practical things needed to handle money wisely. Yet we often chose financial curriculum over financial conversations. We immediately run to the practical instead of the relational. When building a strong structure you must always lay an unshakable foundation. Values are the things that can hold spending, saving, and sharing in it's rightful place.

2. We start programs we are not consistent with

When it comes to a child's learning you don't need fancy curriculum, apps for your phone, or glitzy organization charts. You don't need a famous financial person's 10 step system guarantee. You simply need to be consistent. We know this is true with every other activity we introduce to kids -- let them consistently do something and watch them grow. So it's not about finding the coolest Pinterest board filled with ideas, it's about finding what YOU the parent are willing to be consistent with. Start with one thing if life is busy. Being consistent with that one thing is better than sporadically enforcing 5 things.

3. We start at the wrong time

Simply put, we often start too late. We miss the formidable seasons in our child's life where money attitudes and values have already taken root. Most parents will begin to seriously address money during teenage years. But your child has already been an active consumer for a decade or more by then. This approach is akin to cramming 10 minutes before a pass or fail final exam. We know children learn new things easiest when they are young, so why do we procrastinate?

4. We forget what's at stake.

Did you know that money is the #1 reason for relationship conflict, the #1 fear of incoming college freshmen, a leading stressor that reduces healthy living, a deciding factor to major life decisions like marriage, family, career choices, home and car purchases. You add this all up, and you start to see that money isn't just another skill to collect. Money is essential to their ability to be well-adjusted adults throughout their entire lives.
I am determined to help parents teach their children about money. I had access the the latest content, the latest experts, the latest curriculum. But none of those things helped me communicate money values to my son. Are we all hopeless? It can seem that way -- I know. 

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Stay tuned for the next post where Justin will offer 3 things you can start doing now to have better conversations about money.

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