How did you learn about money? Were your parents good with money? Did you learn to manage money at home or at school? Everyone has a different money history. Some of us are grateful our parents were good financial role models but others of us weren’t so lucky. Regardless of how you got to your current financial life, take a moment and be thankful. Good role models are wonderful, but the school of hard knocks is not a bad teacher, either.
Past as prelude
Do you find yourself repeating the money patterns of your parents? It’s eerie the first time you utter some money belief and you hear your parent’s voice coming out of your mouth. Some profess, particularly when it comes to finances, we “marry our parents,” and I feel there is some truth to that.
In my childhood home, my father was the primary breadwinner. However, my mother went back to school for nursing after my sister and I were both in school full-time. We were latch-key kids, coming home from school and letting ourselves in for an afternoon snack and some playtime before our parents came home.
I don’t remember lots of specific conversations about money, but I know my dad would get upset with my mom when she overspent. I remember times she would take us shopping for school clothes and warn us “not to tell your father.” While I didn’t fully understand at the time, I know now there were some rough times in our house financially, and money was a sore subject.
Money patterns (and many other patterns, too) often repeat in subsequent generations. As primary breadwinner and worrier over all things financial, I have definitely repeated the role my father had in the household. In some ways, my husband often fills the role my mother did with a propensity to spend now and not worry much about future goals.
If we can recognize these patterns, we can examine them. We can dissect them and keep the good parts, the constructive parts, and discard the bad parts. By taking some time to identify what is happening in a relationship and how your respective backgrounds play a role in your current-day behavior, you can choose a different outcome.
Don’t repeat the past. Learn from it and improve on it.
Teaching the next generation
The next obvious question is “How are we modeling financial literacy for our children?” If you reflect on the way money was discussed in your home growing up, and if you think about how your parents did or did not agree about money, you can resolve to do a better job with your kids. If your parents did an awesome job of instilling good money habits and modeling good communication about money, then repeat that pattern!
It’s when your childhood family’s pattern wasn’t so healthy or helpful that you need to resolve to do better. If you don’t know much about good money management, commit to learning more to be able to teach and model good habits. For that matter, learn right along with your kids!
It’s abundantly clear that kids are graduating from high school and college without an adequate understanding of how personal finance works. Certainly, there are some isolated exceptions, but on the whole, financial literacy is lacking.
What we should have learned
Below, I have linked to three other posts that give some topics to teach children, especially young kids. By the time your kids graduate from high school, however, they should know more. Here are money topics you should cover with your kids.
Banking: How banks work, how to open a bank account, how to reconcile your account statements, how debit cards work, why it is important to keep your checkbook and bank cards safe.
Credit cards: How they work, why banks are not your friend when it comes to borrowing, why credit should be used as a tool and not a crutch, how interest accumulates on a balance carried on a card, why paying your card(s) in full each month is the best practice, why maintaining good credit is important.
Saving and investing: How compound interest works, why saving is important, the power of time in investing.
Work: How to interview for a job, how to evaluate wages and other benefits, how to evaluate a job offer, how to be a good employee, how to increase your skills and the value you bring to the position, how to ask for a raise when you deserve one, why hard work is important.
Spending: How to create a household budget, always spend less than you earn, be mindful in your spending, pay yourself first.
Does that sound like a lot? Does it sound like a bunch of stuff you were never taught? Don’t despair, just take it slowly. Many of these financial life lessons can be taught just by involving your kids in the family finances. While you certainly want to pay attention to what is age-appropriate, you can teach as you are going through your daily life. While you are at it, you can also teach your kids discretion – what is appropriate to discuss outside the family and what is not.
Whether or not you had excellent family role models growing up, you can resolve to be one yourself. Don’t use the “I was never taught that” excuse as a pass on helping your children be the best they can be. Accept that the money history you have is yours and yours alone and be grateful. If you learned the hard way, think how useful those lessons will be for your children!
What stories can you tell about your money history? Or what did I miss in my list of money and responsibility lessons kids should know? Share your thoughts below. Or if you want some like-minded friends, join the free SimpleMoney Community on Facebook to share your stories!
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