Financial Tip

Five Money Myths Our Children Learn from Parents

Five Money Myths Our Children Learn from Parents

When raising kids and instilling them with the right values, the old axiom, "Actions speak louder than words," has no greater context. Money issues can be the most perplexing for families, and parents have a short window of opportunity to pass on to their kids the lessons and the values that will carry them into adulthood. Yet, it’s also the one aspect of family life where they are more likely to communicate to their children, "Do as I say, not as I do." When that happens, kids are much more likely to believe in the myth rather than espousing the value.

Here are five money myths parents inadvertently teach their children.

Greenbacks Grow on Trees

Of course, we want our children to appreciate the value of money and that it doesn’t just grow on trees. Yet, parents are often guilty of using money as a path of least resistance. We may try to avoid giving in to their impulses, but due to our doting nature or panic to avoid a meltdown in the grocery store, we reach for our wallets. And, when we do, we feed the myth that money does grow on trees. Kids need to know early on that money is earned, and its use usually involves tradeoffs.

You can get Paid to Play

Parents desperate to motivate their kids to work hard in school sometimes offer money to reward good grades. This can create the expectation that any form of behavior is for sale. Rewarding good behavior with money can skew what should be expected from our children while diminishing their ability to value their own self-worth. Paying for work, as in weekly chores, is OK, but paying for expected behavior can be counterproductive.

You can say, "I love you" with Money

It’s not uncommon for parents to become guilty over the lack of time and attention they can give to their children due to their busy schedules. To "compensate" their kids and ease their own guilt, they will sometimes use money or material things to replace the lost love. If it happens often enough, children will begin to associate love with money, which, should the money ever stop, will make them feel unloved. It can also lead to resentment as the kids mature and realize that their parents have substituted money for real love.

Nothing to See Here

Parents have suffered through difficult economic times in the last few years, causing stress around the kitchen table. Although most parents try to insulate their children from financial difficulties, kids are highly intuitive, often picking up on their parent’s anxiety. Without at least minimal communication on family money matters, kids could begin to take on the pressures felt by their parents without understanding the cause. If nothing else, bringing your kids into the conversation can ease stress by enlisting their cooperation during difficult financial times.

Money can Buy Happiness

Some people might quietly admit that, at certain moments, having money can make them happier. Who doesn’t feel uplifted when they get a big bonus or can splurge on a nice vacation? For the rest of us, more money and spending doesn’t necessarily improve our happiness. Living a good life doesn’t have to depend on having more money; it depends on knowing how much money is needed to produce the situations that result in a good life.

Sometimes in the pursuit of more, people lose sight of what they have, which is the only proof of what they can reasonably expect, both now and in the future. The critical lesson parents need to pass on to their kids is that if we can’t appreciate the lifestyle we now enjoy, we only increase the "risk of more" with no guarantee of increased happiness.

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