by Stephanie Berenbaum – April 6, 2011
How to Raise Financially Responsible Children
You know here at Fab & Fru we’re always looking for expert advice on that mother of all financial questions: how to talk to your children about money! And I definitely hit the jackpot with my interview with Neale Godfrey – founder of the Children’s Financial Network, and author of many books including the New York Times #1 best seller “Money Doesn’t Grow on Trees.”
Credit Where Credit Is Due
I found Neale’s personal history fascinating. Back in 1972 she was one of our nation’s first female banking executives at Chase Manhattan. Now here’s the crazy part: at that time, women rarely had credit cards in their own names! I know it seems inconceivable now, but that’s where we were at a mere generation ago…
Neale found herself in a situation where even though she was the high powered banker, and her husband was still a law student, she could only get a credit card in his name. In addition, she had to carry around a written permission slip from HIM, plus a copy of their marriage certificate! Most places also insisted on calling him to approve purchases- made even more ridiculous in a pre-cell phone era! It was based on these early experiences that Neale went on to found the First Women’s Bank and then the Children’s Financial Network.
Think about it – this quote from Neale is so powerful. But when you look at the daily lives of our children it is probably not the message they are getting! In this age of recession and down sizing, Neale advocates honesty with your children. If the family is going through hard financial times, the worst thing you can do is pretend like it’s not happening. Neale points out that unless told otherwise, children tend to think the worst. So, by trying to shield them from what is really going on, you are likely only to increase their anxiety level.
Do Not Apologize
If your family is in the midst of financial constraints, Neale advises that you should NOT apologize, but rather focus on explaining the situation. This is a teachable moment! Neale views it as an opportunity to educate your children that we don’t judge our friends – or our ourselves – by the amount of money one has. As she says, “We are not our car or our house — but we ARE our behavior…” We know quite a few adults who could benefit from this lesson too!
The Art of the Allowance
One question we get a lot is - are allowances a good idea? And what age can kids start to understand the concept?
I really like Neale’s approach to the allowance dilemma. She is all for allowances – but broken down in a specific way. She says there are certain things that fall into the Citizen of the Household category for which the child does NOT receive pay. For instance, brushing their teeth, picking up their toys, etc. But she DOES advocate giving an allowance for extra special chores – of course this all depends on the age of the child! For instance, we offer my 5 year old payment to help wash the car – and he loves it!| Print
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