Parenting Finance Tips

Financial Literacy Month: Becoming the Financial Role Model Your Child Needs

As a financial journalist, I can tell you that it’s easy to get disconnected from the advice you give.  Sharing information is your passion, your job.  You are so committed to the audience that you can easily forget that the same rules apply to you.

[Related: File Last-Minute Taxes With Easy-to-Use Smartphone Apps]

The same is true for parenting.  We are so focused on our children that we often disconnect from how our own behavior mirrors our message.   While we may have trouble seeing our own reflections, our children are watching and absorbing every move.

“Children rarely listen to their parents about financial matters, however they have never failed to imitate them,” says Sabrina Lamb, Founding CEO of the and author of “Do I Look Like An ATM? Raising Financially Responsible African-American Children.”

We should not expect our children to make smart spending choices if they see us spend recklessly.  We should not expect our children to invest if we never talk to them about investing.   We should not expect our children to be able to have healthy conversations about money if the only time they hear it discussed is when there are concerns or conflicts.

The Power of Love

We all know that changing financial behavior is not easy — we can feel stuck in patterns and lifestyles that encourage us to live beyond our means   Behavioral experts say it is imperative to have an ‘emotional incentive’ in order to make lasting change.    This is where your child comes in.   If you make a commitment to become a positive role model for your child the financial part will begin to fall into place.

The Basics: What is the most important thing I want my child to know about money?   What is the most significant financial situation I want my child to avoid?

I have always stressed to my son that the most important thing to remember about money is that it doesn’t define him.  We discuss how he will constantly be getting messages from the media, advertisers, even the people in his life, that certain lifestyles and choices make a person “good” or “bad.”  We stress how those definitions should come from his ‘inner voice’ not outside forces.   This will also help him avoid situations where he is literally paying for things — a certain house, a certain car, a certain image  — that are not in line with his values.  This will also help him stay out  of debt — a situation I want him to avoid.

The Details:  What is the most important thing I want my child to know when it comes to:  Earning, debt, saving, giving back?  What do I have to do to walk the walk in my own life?

When you make adjustments to your finances, don’t hide it from your child.  If you are having a financial short fall and have to figure out a side hustle, share the process.  Let them know how you got into the situation, and how much extra income you need to earn to get out of it.  The goal is to give our children skills to use during challenging times.  Knowing your child is going to see what you do will also give you incentive to make better decisions.

Getting on the same page: A united front is key when it comes to role modeling positive behavior.  If you’re raising a child with a spouse our partner discuss the following questions:

  • What are the five most important things we want our child to know about money?
  • What changes do we have to make in our own life to walk the walk?
  • Who can we trust to help us stay on track?  Who can be our child’s financial godparent and hold us accountable?

Becoming your child’s financial role model will not come without bumps and you won’t be perfect.  Setting out on this road, however, will remind you of a truth we often forget:  We are not only our children’s greatest teachers, they are also ours.