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The Mixed Messages We Send Kids About Money

by Bonnie Vengrow

The apple doesn't fall far from the tree with many things in life — whether it's the sense of humor you inherited from your father, or the blue eyes that look exactly like your mother's. But what you may not realize is you could have also inherited their money habits — for better or worse.

Bodies of research confirm that parents are the first to take on the task of teaching kids about money, and whether we like it or not, we pick up many of our money habits from them. In fact, a 2013 report by researchers at the University of Cambridge found that when parents model specific decision-making behavior, their children mimic the behavior and possibly even develop a similar habit.

That's right — kids aren't just learning by listening to us, they're watching us as well. "Children develop values about money not from what you say but how you behave," explains Betsy Brown Braun, child development and behavior specialist and author of You're Not the Boss of Me. "The way in which you answer a money question from them — your affect, tone, attitude, knitted eyebrows, anger, welcoming expression — is more telling than the words you say."

Children develop values about money not from what you say but how you behave. Betsy Brown Braun

But you may not even realize there's a contradiction between your words and your actions. Take, for example, a 2015 study conducted by T. Rowe Price, which found that eight out of 10 parents feel they're setting a good financial example for their kids, yet two-thirds of them copped to less–than–stellar behaviors, such as lying to their kids about money or taking money from their child's piggy bank.

Wondering what messages you might be inadvertently sending to your kids? Here are four common scenarios and the lessons they may be sending.

8/10 parents feel they're setting a good financial example for their kids. T. Rowe Price Study, 2015

The scenario: You're paying bills and forgot the password to your online account — again. After several log-in attempts, you're locked out. Frustrated, you snap at one of the children, and the other child whispers, "Don't bother Mom when she's paying bills because she'll get mad."

The lesson you may be teaching kids about money: Money is stressful.

How to reframe it: In situations like this, children are "automatically attaching negative feelings with money, which is a scary thing when you think about it," says Sonya Britt, Associate Professor at the Institute of Personal Financial Planning at Kansas State University, CFP®. She suggests using use your outburst as an opportunity to explain to your children in an age-appropriate way the source of your negative feelings. For example, "I'm frustrated because we forgot our bank account login, not because we have to pay bills."

The scenario: You're reviewing your credit card statement and notice your partner made a pricey and unplanned purchase. A confrontation arises and a heated discussion quickly ensues — as your kids watch from the other room.

The lesson you may be teaching kids about money: Don't talk about money because it will make people mad.

How to reframe it: "It's hard because you want kids to see those conversations about money happening so they know everyone has limited resources. And it's fine for them to understand that — that's a pretty basic life skill," Britt says. "But you want to make sure you're delivering it in child-appropriate ways so they don't leave with a sense of confusion and anxiety. You don't want to leave them in the dark." Providing clarity could be as simple as saying, "I'm just curious where this charge came from and am trying to get more information about it. I'm not upset."

The scenario: You're waiting in line at the grocery store when your child spots a trinket she has to have. She doesn't need any more stuff, but the item is only a few dollars and it will stop her nagging. You put it in the grocery basket.

The lesson you may be teaching kids about money: Buying things will make you feel better.

How to reframe it: While those little indulgences may be meaningless to you, they're sending a powerful message to your child that if they throw a fit or walk into a store with you, they'll get a reward. "That's a pretty big lesson that will carry forward into adult life," Britt says. "When people feel upset, they think, 'I'll just go buy this new scarf because I deserve it and it will make me happy."

Next time you go to the store, bring a list and explain ahead of time to the kids that you must stick to it. Any changes can be considered for the next shopping trip, so long as it fits into the family's spending plan.

The scenario: Your children each received a sizable number of monetary gifts for the holidays, which they're ready to spend immediately. You oblige and take them to the store — it's their money, right?

The lesson you may be teaching kids about money: You don't need a plan with money.

How to reframe it: If there's one area where parents could improve, it's helping their children think through what they're going to do with money when they receive it for holidays or birthdays. "How are they supposed to be able to develop financial goals when they're 10 years old?" Britt says.

Help kids allocate money to different things, such as items they want to buy, savings, and charity. Sonya Britt

Have conversations with your children to help them figure out what exactly they want to do with the money. "Instead of saying, 'OK, let's go to the store and pick out whatever you want,' before you go, come up with a plan together. 'What have you been thinking about? Here's what I do when I get money for my birthday,'" she says. "And then you can help them allocate money to different things, such as items they want to buy, savings, and charity."

The way you act around money is just as important as the way you talk about it. For more advice on teaching kids about money, check out: What Kids' Tough Money Questions Really Mean.

Bonnie Vengrow
Bonnie Vengrow is a writer and editor based in NYC. She has written for Parents, The Bump, Rodale's Organic Life, Good Housekeeping, Today.com, and others.


We get it. Money is complicated. And like any relationship, your relationship with money can be difficult. So how can you make it better? It all begins with a little more engagement—and a little less avoiding. At Citi, we're here to help. So let's get started.

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