July 16, 2012 admin

Lighting the way Part 1 – What you don’t know

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George Bernard Shaw once wrote, “Life is no brief candle to me. It is a sort of splendid torch which I have got a hold of for the moment, and I want to make it burn as brightly as possible

Children are the most potent receivers in the world they are also notorious mimics.  A child can read the unconscious signals in how we react to certain events and at once surmise and integrate our attitude into their personalities. If we show a negative attitude    toward   things   of   a   financial   nature, chances are our children will too.  So how do we know when we are sending the wrong financial messages to our kids and what should we do about it?

What You Don’t Know …

For many people, it may take discipline not to let out a groan when the bills come, a sigh when it is time to balance the books and a curse when a financial analyst appears on the television screen. However, if your reaction to financial topics is typically negative and your strategy one of avoidance, these    will    send    a   message    to    your   child that finances are an annoyance best to be avoided.

Social scientists have discovered that the vast majority of children are destined for a financial future that differs little from that of their parents.   In many cases, the middle class raise the next generation of middle class people, the poor raise the poor and the wealthy raise the wealthy. Very few children move up the ladder from their parents, while sliding down is as simple as swiping a credit card.

If there is going to be a change between your level of wealth and that of your children, the odds are that they will do worse financially, rather than bet- ter. They may earn more than you do, but they will also spend more and save less. In recent years, the practices of  saving  to  buy  and  general  frugality have  been  sabotaged   by  quick  credit,  payment plans and a “why wait?” shopping attitude.

Deadly Silence

Many parents avoid discussing money with their children but, unfortunately, omitting this subject can have an effect on the financial lessons they pick up and the attitudes they adopt.  In general, parents tend to avoid speaking to their children about finances because it is an “adult” subject. Finance is seen as something that a child can worry about when childhood gives way to adulthood and, as a result, parents neglect to address these topics with their children at an early age. Implicit in this silence, however, are a number of negative signals if you do not discuss finance with your child, it may suggest to him or her that money is either unimportant or something to fear.

For many children, this silence continues at their schools, with only the most cursory glances at ac- counting and vital life skills like budgeting. The undeniable truth is that your children are going to learn about finances from you. But to do this effectively, you need to develop a plan and some techniques that will help make the lessons count.  A good first step is granting your children an allowance.

In the next post we will discuss starting an allowance.

Susan-Mercers-Money-Talk-3rd-Quarter-2012

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