What Financial Lessons Did You Learn From Your Mother?

Key Points

  • Mothers (and fathers, too!) play an important role in influencing how we feel about money and the financial decisions we make later in life.
  • Whether you consciously do it or not, you're actually teaching your kids about money every day by your own actions.
  • You can nurture good financial habits by letting kids make money decisions early on, setting a good example, and being open about financial challenges.

Dear Readers,

Recently, some colleagues and I were talking about our mothers and the role they played in our financial educations. As you can imagine, there was a wide variety of response depending to a large extent on what generation we grew up in, but also on each family’s outlook and dynamic.

Those growing up in the 50s seemed to learn as much about what not to do (like keeping several hundred dollars in a drawer or even hiding money from each other!) as what to do. Others were fortunate to have moms who helped them kick-start the savings habit by opening a savings account early on and matching their contributions. One of the most impressive stories I heard was from a colleague who had taught her young daughter the difference between needs and wants. Now when they go shopping together, her daughter will often decide not to buy something she wants because she doesn’t really ‘need’ it.

For myself, I think I first became aware of money issues when I was nine years old and my parents got divorced. At that time my dad was just getting his business off the ground and I saw my parents struggle with the family finances. I'm pretty sure that had an impact on my desire to learn whatever I needed to be independent.

All of these conversations and memories got me thinking about how important our mothers are in influencing how we feel about money and the financial decisions we make throughout our lives. So with Mother's Day just ahead, I thought I'd focus on the many ways moms (and dads, too, of course!) can nurture a positive and practical financial attitude in their kids.

Give your kids an early start

I'm a big believer that kids can learn about money from an early age—and that they need to experience what money means by actually having some of their own to handle. From letting a five-year-old choose and purchase a treat and then count the change to giving a young teen a reasonable allowance and having them save and budget for what they want, each financial interaction teaches a lot about making smart choices. Which, to me, is what good money management is all about at any age.

You've probably heard me talk about mindful spending, controlling your money rather than letting it control you. Well, the earlier a child learns to think carefully about how they spend money, the more successful they can be in making bigger money decisions later on. That also includes letting them make their own financial mistakes when they're young and the stakes are lower.

Show them by example

Whether you consciously do it or not, you're actually teaching your kids about money every day by your own actions. As all moms know, kids don't miss a trick. They're paying attention in the grocery store, when buying school supplies or clothes, at a restaurant—you name it.

All of these interactions involve choices and money. And whether you carefully consider what you buy or spend freely, your kids are watching and making inferences. If they see you economizing, they'll notice. Likewise, if they see you splurging all the time, they'll think that's normal. To help them understand, why not let them in on the decision when it’s appropriate? It's doesn't have to be a serious discussion. Something as simple as saying "I don't really need this, so I won't buy it today" or "This is something I really want and have saved for" can make a lasting impression.

Be open about the challenges

Typically Americans are uncomfortable talking about money, especially money problems. But again, kids are pretty smart about sensing if something's wrong. So if you're dealing with financial challenges—coming up short with your budget, struggling to save—talk to your kids about it. They don't need the details, but there's no harm in letting them know a bit about what's going on whether it's a need to cut back or postpone a big purchase. You might even engage them in finding a solution.

Encourage them to think ahead

If you asked my kids what they've learned from me, I'm sure they'd say that I've hammered home the importance of saving for retirement. As soon as they had earned income, they opened a Roth IRA and were expected to put away at least 10 percent of their earnings. And as soon as they had accumulated savings, I helped them invest, explaining the basic concepts of risk and diversification. “Easy for you to do,” you may be tempted to say. But if you're saving and investing for your own retirement, you already have a good example to share with your kids.

Enjoy their success!

Being a parent is a challenge and a joy. And one of the greatest joys is to watch your kids succeed. You want them to be happy, healthy, and economically secure. To me, that doesn't mean being rich and famous. It means being confident and independent. And the financial lessons you teach your kids early on can play a big part in them achieving that success. It's not easy, but it sure is rewarding. And I believe even they will appreciate your efforts as time goes on. Happy Mother's Day!

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