How to Empower Your Kids to Win the Money Game

When my daughter was born, I was totally clueless how to raise her. I wanted her to be healthy, happy and successful but I didn’t know how to raise a successful child. I wanted her to get a great education, have good friends, and find the work she loves. Teaching her about money and financial literacy was not on my radar as a mother.

BIG MISTAKE.

Kids are sponges for new stuff. They are curious and open to learn all kinds of stuff!  Many toddlers start reading and counting while in pre-school! Then we see our kids learning math and science, biology, history, and literature in their middle- and high-school. Most young adults study all kinds of subjects in college (for which parents often pay) but not how to be money-savvy adults.

Yes, they learn all kind of stuff except for how to deal with money. There is no basic financial education offered in schools or colleges. Yet, the sooner kids understand the Game of Money, the higher probability that they will succeed at this game as adults.

Further, most public schools and colleges prepare kids to become competent employees, working for employers. Kids rarely learn about entrepreneurship or the intricacies of starting and running a business. Most young adults have no clue that they have to pay taxes.

Become a Role Model

You, as a parent, have the biggest influence on your child’s attitude, self-image, and beliefs about money and wealth. If there’s a bad role-modeling of managing money in your family, kids often mirror it and only notice it once the struggle starts as they become adults. If they grow up with an expectation that money is scarce and is the source of struggle, problems, and pain – it’s likely that they’ll experience this in their life…unless you catch this soon enough and instill positive money beliefs and habits.

Most kids only see parents spending money when they go with them to a store or on vacation. Kids rarely see parents paying bills, saving, investing and donating money. Talking about money in an open and positive way is very rare. Yet it is imperative that you speak with your kids often about money, wealth and gratitude.

The Future of Economy Is Shifting

According to a 2017 study by Upwork and Freelancers Union, about 36 percent of the workforce in the United States is freelancing, either full-time or as a supplemental work to their fulltime job. If this trend continues, the majority of Americans will be freelancers by 2027.

Yet most public schools and colleges teach neither entrepreneurship nor personal finance. That’s why many millennials use credit cards to buy for cryptocurrencies so that they can become millionaires quickly.

And since we’re quickly moving toward entrepreneurial economy, the need for financial literacy becomes a necessity. Fundamental financial rules like SAVING (paying yourself first), BEING INTENTIONAL with your SPENDING (not spending  more than you earn), AVOIDING high-interest consumer DEBT (not having balances on credit cards), and MAKING your MONEY WORK FOR YOU (by strategic investing) are not taught anywhere.

Some people are naturally money-savvy others learn the game of money the hard way.

But it doesn’t have to be that way!

Savvy money management is a skillset that can be taught.

Preparing Kids for the New Economy

The lack of financial education among young adults often leads to devastating effects on their lives later on. High-interest consumer debt and rate of default on student loans are an record high. According to a 2017 GOBankingRates survey, more than half of Americans (57 percent) have less than $1,000 in their savings accounts!

By becoming a responsible and savvy money manager yourself, you will model the healthy money habit to your kids. Talking to them about different aspects of money – from “abundance mindset” to the dual nature of money (energetic and physical forms), to fundamentals of managing money – will help them be better prepared for financial responsibilities later in their life. Make your money conversations with young kids light, fun and open; without projecting energy of scarcity, lack, and fear.

You may also find programs (locally or online) that offer financial education for teenagers. There are programs (outside of public schools) that cover both – personal finance and entrepreneurship. Some programs teach kids about every-day financial tools like using debit cards (instead of credit cards), planning their spending (of allowances), and maintaining the balance of a checking account. Other programs focus on instilling the abundance mindset so kids have understanding of financial security.

There are private programs that teach kids about entrepreneurship and business ownership – how to manage the cash flow and operating expenses, how to pay yourself and your employees, how to create a budget. The creators of these programs are often people who learned financial and entrepreneurial literacy at a young age. These teachers are aware of the importance of knowing the Financial Freedom rules and how their money habits affected the trajectory of their lives.

This experience can be very inspiring and empowering to your kids because not only they will learn about challenges and rewards of entrepreneurship, they will also witness pride and joy of becoming a successful business owner.

Guiding and Empowering Kids 

We love our kids and want them to succeed in life. But do we always know what is best for them and how to help them? We often try to protect and advise them so that they won’t make costly mistakes. We try to ‘save’ them every time they ‘fall’. But does it really help your child to be afraid of making mistakes, especially with their finances? Will an overly protected child, who expects to be ‘saved’ every time, become a resilient, confident and self-reliant adult?

Most of us have learned lessons in life through trial and error, by falling and getting back up, by learning from ‘failures.’ Emotional maturity is built by continuous life experience. With this being said, your guidance as a parent must be mindful and sensitive to the child’s unique character traits, inclinations and talents.

Instilling a sense of confidence, self-love and personal responsibility in kids from a very early age is imperative. Making your children feel loved and accepted unconditionally — regardless of their achievements, imperfections and shortcomings — will make them feel lovable and significant. Empowering kids with proper financial education and an opportunity to explore, will help them build confidence and succeed in life.

Share your own lessons about raising a money-savvy child in the comments.

To Your Health, Wealth, and Freedom.

Millen

About the Author Millen Livis

Millen is a Wealth architect and Financial Independence Coach, entrepreneur, and a bestselling author. Being a Possibilities' Catalyst, she uses her intuition, business, and investment expertise to support entrepreneurial women (like you) who want to master their money, live their purpose achieve financial prosperity and freedom. With her physics and business education, corporate and entrepreneurial experience, money management know-how, mindfulness practices and transformational coaching skills, Millen has a unique ability to guide and support clients in achieving extraordinary success in their lives.

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