For a lifetime of financial literacy, send your children the right message
“You’re so lucky – you get to decide how to bring up your child.” I’ve heard this far too many times from people I have a child-centric relationship with – meaning I know them as a parent and am getting to know them as a person. The comment is often said in response to finding out I am a single parent.
They often quickly qualify it with an “I love my partner”-type statement. It’s as though they’re speaking to themselves first and me second. If this is you, listen up: children are not only the product of the person they live with. An absent parent
also influences their child’s relationship with money in key ways. This can be detrimental if it contrasts with the primary carer’s values and system at home.
This is more damaging than cohabiting parents disagreeing about how to deal with money. Dialogue that ideally includes children in an age-appropriate way exposes them to the reality of family situations, values, priorities and hopes for the future. It means they understand why they live the way they do, and learn how to manage disagreement, discussion, partnership and more. Here is a situation I recently came across: a father, who doesn’t see his child for months at a time, has been on his first solo holiday with his child. This is great for the child’s well-being, right? Let’s go over the money picture.
This parent pays nothing towards his child’s upkeep. The mother’s financial situation is wobbly as a result – and of course this affects the little one’s life. The father is in dire money trouble, including legal issues around bounced cheques, fraud and more.
Contrast the above with the splashing of cash on holiday, buying things the child is saving up for and going on shopping sprees. This father doesn’t want to hurt his child but, as the saying goes, the road to hell is paved with good intentions. He would send a better message to his child, one that could benefit him for life, if the conflicting money messages stopped.
Money patterns observed and modelled in early life are a primary source driving
financial decision-making in adulthood. Countless research papers delve into this, including a paper published by the University of Cambridge in 2013 titled Habit Formation and Learning in Young Children. While I hope none of this is relevant to you, it’s more than likely you also send some conflicting messages to your child(ren). Here are some examples:
We should do good things because that’s the right thing to do / Here’s Dh20 for cleaning your room.
We must be honest / Tell them you’re 11 so we don’t pay the full price.
You need to save for that / Here you go, I bought it for you.
Some parents go so far as to bribe their children to behave. Parents are their children’s primary educator when it comes to handling money. When our behaviour does not match what we say, it’s confusing. And, when parents have a troubling history with money, their children are more likely to also have troubled habits.
Studies that support this include a survey titled Parents, Kids and Money by asset management company T Rowe Price in 2017, which examined the attitude and behaviour of 1,014 parents of eight to 14-year-olds in the US, and their children. So what of the mother with the child on holiday with his father? Well, she is in an impossible situation. If she brings up any of the above, such as the mixed message over money with her former husband, or appears to begrudge the spending on her child it will not end well. Then again, their inability to communicate effectively probably contributed to their marriage ending.
Co-parenting is a phrase often used once a partnership has ended. However, it should apply to the lifetime of your child – not the lifetime of your relationship with their other parent.
This father doesn’t want to hurt his child but, as the saying goes, the road to hell is paved with good intentions