While many children learn about money in school, their first financial teachers are their parents. Children’s primary ideas about finances come from the way they watch their parents interact with money. The dynamics of a household and the way each member handles money can have lasting impacts not only on children’s beliefs about money but also on how finances shape their roles and place in society. Here are four messages children might subconsciously be learning by the way their family handles finances.
1. Women are not meant to be financial leaders
Women are earning more money for their families than ever before. However, despite the fact that in 45% of modern marriages, women earn as much or more than their spouses, women are less likely to be in control of the family’s finances. Many women, even when they earn as much or more money than their spouse, are less likely to be involved in long-term investing strategies, financial planning, estate planning, paying bills, and even daily household spending. While there may be many reasons for this, societal expectations surrounding men's and women’s financial roles certainly play a part. Women are more likely to say that their contributions in the household are valued more than their contributions at work, while it is the opposite for men.
These ideas can start as early as childhood. According to a survey of 1,000 parents, mothers are more likely to teach their daughters about finance while fathers are more likely to teach their sons. Furthermore, girls are more likely to be taught about aspects of daily personal finance, such as saving and budgeting. Meanwhile, boys are more likely to be taught more in-depth finance concepts like taxes, bank accounts, credit cards, and investing. Because of the different expectations of men and women in the household and the differences in parental financial education between boys and girls, the traditional narrative that men are the financial leaders of the household has persisted, even when women are significantly contributing to household funds.
How to fix it?
Financial strategy should be a collaborative effort in any household, regardless of who is the primary breadwinner. In order to help negate the idea that women should not be involved in finances, both husbands and wives should be actively involved in the financial happenings of the household. Furthermore, make sure the financial education
your children receive is the same, no matter their gender.
2. Women should be paid less than men
More women are in the workforce earning money for their households, however, they are not earning it at the same rate as their male counterparts. On average, women earn 82% of what men earn, a gap that has remained relatively the same for 20 years. While this issue is largely a systemic one, the beliefs that perpetuate it can start within the home. A 2019 study found that girls tend to receive less money from their parents than boys do. On average, boys receive more money for chores, allowances, and even when it comes to Christmas presents. Paying girls less than their male counterparts maintains harmful ideas about women’s financial worth and can lead to young women internalizing the belief that they should be paid less, even for the same amount of work.
How to fix it?
Do your best to educate male and female children the same and handle chores and allowances evenly as best you can. Every family is different, but regardless of your situation, have a talk with your children about their worth. Build them up and instill in them that they deserve to be fairly compensated for the work they do, regardless of their gender.
3. They are at fault for financial struggles
While it is important that children be involved and educated on finances from a young age, it is vital to ensure that knowledge about the family’s financial state is framed in a healthy way. In households where children are exposed to financial stress that they cannot control, they are more likely to develop poor financial habits and financial anxiety as a result. Unhealthy communication with children about money can be anything from venting about financial issues, talking about stress related to childcare expenses, or using the child and the cost of their upkeep as a reason that other financial obligations cannot be met. When children know that their parents are stressed about money due to childcare, they can begin to feel responsible, leading to future emotional and behavioral issues, financially and otherwise.
How to fix it?
If you are struggling financially, be honest with your children. Explain the situation to them in a calm way without placing blame. Furthermore, outline your plan to alleviate the financial stress and reach your financial goal. This way, your child gets real-world financial experience without feeling responsible for the situation.
4. Finance is hard to understand
Teaching children about the complexities of money management can seem daunting at first. However, the fact of the matter is, that your children are already picking up ideas about how to handle money, even if you’ve never said a word to them about it. Children are able to grasp basic money concepts by the age of 3 and by age 7, they have already formed habits surrounding money that can remain with them for life. Suppose you are not talking to your child about good financial habits because you think they cannot understand. In that case, they may grow up believing financial acumen is beyond them, making the bad habits they’ve already developed harder to break.
How to fix it?
Make an effort to teach your children good financial skills from an early age. It is easier to instill good habits than it is to break bad ones. Children are smarter than you think. Honor that intelligence by teaching them what you know and encouraging them to continue learning about how to handle money.
Handling finances in today’s world can be difficult, and it becomes even more complicated when you have to consider what your children may be learning from the way you handle your money. The great news is that it is never too late to begin teaching your children, and yourself, how to live a financially empowering life.
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