It’s not easy knowing if or how to intercede when your child faces a tough decision.
“We’re all familiar with helicopter parents and, if we’re honest, each of us is probably guilty to some degree of the same behavior, but regularly stepping in and taking the reins, no matter how well-intended, can undermine self-sufficiency,” says Taylor Burton, founder of Till Financial, a collaborative family financial tool that empowers kids to become smarter spenders. “Experience is a great teacher and if a child isn’t allowed to make and own their choices, their decision-making skills could suffer.”
For parents, this is particularly a concern when it comes to finances. “No one wants to see their child enter adulthood, only to make a major financial decision from which they spend the next decade trying to recover.”
So how can you foster independence while instilling in your child the skills to keep them on the right financial path? Burton breaks it down with five tips.
Bring it into the light
“If you’re like me, growing up, you likely saw your parents paying bills and constantly running to the bank for various transactions. Yes, the convenience of direct deposit and online tools is terrific, but that visible reminder of staying on top of finances is gone. Bring it back into the light by showing healthy financial practices and explaining what makes for a smart purchase. Further, let your children see, and even experience, the tools and apps you rely upon to handle family finances.”
Recognize their ownership
“We regularly ask our kids for their opinions on family matters. What should we eat for dinner? Are we prepared to care for a dog? Where should we vacation next summer? Their voice and vote counts and a great first step is simply recognizing their stake and conveying the responsibility that comes with family and financial decisions. Acknowledging the big picture, and their role in it, can open the door to actions that’ll cultivate wise saving and spending habits.”
Learn by doing
“Your child wants to become a rock star? Get them invested in it, literally, by having them purchase a guitar with their own money. Ask them to list out pros and cons. Have them investigate quality, pricing and any accessories that might be needed. Ask that they give a presentation on their findings, and if all checks out, brainstorm ideas to help them make money to reach their goal (performing tasks around the house is a win-win). Further, consider an incentive like matching their savings or buying an accompanying amp when they hit their target goal.
If you want to instill the accountability of bill-paying skills, and your child wants a cell phone, consider purchasing the device so long as they commit to paying the monthly service charge. According to the Learning Pyramid, practicing by doing is the second best method for retaining information.”
“Discussing money can sometimes be uncomfortable and confusing. What’s more, you might not feel like an expert on money matters. A good way to eliminate the stress is to harness the right technology for working collaboratively. There are solutions on the market that feature apps and debit cards specifically designed to help parents create smart spenders and savers. This can provide the independence for children to grow, yet give parents the means to follow, reinforce and reward healthy habits.”
“Try as we might, no parent is perfect – we all make mistakes. Those financial lessons we learned the hard way? They can be some of the most effective educational tools, so share them with your children. It shows them that even the best of us can make mistakes, that you can recover and how to avoid them from the start. Detailing how you recovered from a mistake or bad choice is particularly important because it illustrates a real-world scenario and solution.”