I think few people would disagree that children learn much of their life skills from their parents. From parenting, to work ethic, to spousal relationships, to personal finance, the most important things in life that children learn are those taught by the example of their parents. That isn’t just a broad opening statement, it’s truth born out of years of investigation by researchers…and from parents and grandparents who witness it every day.
I’ve been thinking lately about what my children are learning from me because as a parent, I AM a model for my kids. But it’s my choice whether to model good behavior or bad and my example, much more than my words, will leave a lasting inheritance with my children.
When it comes to parenting, much more is “caught” than “taught.”
Children react to the behavior of their parents in two ways: they will either model their parents behavior in some way or they will react to it and behave in the opposite way. If your parents bought a new car every two years, chances are you feel the same pull. If they paid cash for everything, you probably will find it difficult to justify credit purchases. If your parents always ate a Sunday meal out, you may do the same.
But it also works in reverse. If you were always forced to wear hand-me-downs, you may be now inclined to ONLY purchase new clothing. If you never (or rarely) were allowed to go to a restaurant as a child, you may be averse to home cooking in your kitchen, preferring instead the perceived glamor of eating out.
But before we start working our kids over to learn about personal finance, remember the contempt you had for the fat gym coach that made you and your 13 year old peers run wind sprints and laps around the track, do sit ups, push ups, and chin ups? What was the basis of your contempt? You (and he) knew that he couldn’t do anything he was pushing you to do, and in your young opinion, he probably never could.
We need to model to our children the way to handle money and our personal finances. So the key, in my opinion, is to ask yourself some hard questions about your current attitudes toward money and personal finance to determine if you want THAT to be your lasting legacy to your children. Questions like:
1. Do you have financial goals for the next year, the next five years, and beyond? I do have financial goals, but I think mine are too vague and I haven’t done a very good job communicating them to my children.
2. Do you have a spending plan for the next 12 months? Not just a “budget,” but a real plan for how your money should be spent? I know where I’m spending my money, but my miscellaneous category is far too large and arbitrary.
3. Do you know how much debt you’re carrying and do you have a workable plan to pay that debt? I’m in good shape on this question. I have paid off all of my credit cards, all my student loans, all my department store debt, and all other debt except the mortgage! Make sure you’re communicating to your kids that debt is slavery.
4. What would happen to your family financially if you lost your job or lost your ability to create income? I am personally very well insured, both with life insurance and long/short term disability insurance, but I need to update and regularly review my plans.
5. Do you spend impulsively, either on big things or little things? I used to be pretty bad about impulsive spending but have really reined in my impulsive habits. I still impulsively spend on some small things but I’m getting better. Books are my weaknesses.
6. What does your lifestyle communicate to your children about your values? I need to think on this one some more. It’s a very thought provoking question to ask. Do my finances and lifestyle line up with my values? My kids live very well but they don’t get everything they want (by design), but all their needs are met. The problem is that children have a difficult time separating needs and wants.
7. Are you saving and investing for the future? Yes, but it never seems like enough. Depending on which model you use for inflation, it appears that we’re falling behind more and more, with no end in sight. It does make me question whether financial freedom is a goal that’s attainable.
8. Do you have a will? Is it up to date? Yes….and no. This is a high priority on my to do list.
9. Do you and your spouse ever disagree on money matters in front of the kids? I don’t want my kids to think everything is peaches, roses, and sunshine, but disagreements have their place and I’m quite confident it isn’t at the dinner table or on the way to church.
…and the hardest question to ask yourself is:
10. If someone, who did not know you, were to write a story about your life based only on your checkbook, what would that story say? That’s a scary question to answer. My life’s story over the last 15 years has seen me make some colossal blunders, and I mean some biggies. I’ve messed up badly on so many fronts, but I’m committed to righting the ship. My early story would be one of selfishness and disaster, of bull-headed stubbornness and snap decisions. But I have changed a lot and I’m willing to change more.
And that is the key. Look to the past only to learn from it, not to think what might have been. No matter where I am today, tomorrow is an open book for me to write.
I WILL NOT be a victim of my past decisions. It is a myth that I am captive to my past. I WILL move forward with determination along a wiser and smarter road. I WILL make certain my children know what I stand for and that my financial decisions match my values. And I will teach them diligently to make good choices and wise decisions.
How about you?