8 Steps to Financially Intelligent Parenting
Eileen & Jon Gallo
A free-reprint article written by: Eileen Gallo, Ph.D., and Jon Gallo,
J.D., © 2005
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Article Title: 8 Steps to Financially Intelligent Parenting
Word Count: 1066
Article URL: http://www.FIParent.com
Author Contact: dsafkow@fiparent.com
Summary
There are money moments every day that you can use to teach your children important skills and lessons about life. Is it a good idea to pay for chores or grades? How do you help your child develop a work ethic? How do you structure an allowance to help your child learn to make choices? Why is involving your kids in charity important? Jon and Eileen Gallo, experts about children, psychology and money, provide parents with eight key behaviors to help them raise financially responsible children.
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What you say and do about money has a profound influence on your
child. There are money moments every day that you can use to teach
your children important skills and lessons about life. But what to say
or do isn't always obvious. Is it a good idea to pay for chores or
grades? How do you help your child develop a work ethic? How do you
structure an allowance to help your child learn to make choices? Why
is involving your children in charity so important? Jon and Eileen
Gallo, experts in the fields of children, psychology and money,
provide parents with eight key behaviors that will help them raise
financially responsible children:
1. Encourage a work ethic
Work ethic is a learned behavior, and parents are the best models to
teach kids to acquire it. If you want your children to work hard and
derive meaning and satisfaction from what they do, make sure you are
modeling the right messages. Insisting your kids do their homework and
help around the house does not guarantee they will grow up with a
sense of accountability and a desire to achieve. Developing a work
ethic in your child is a holistic process and the eight money
behaviors of a financially intelligent parent are keys to this
process.
2. Get your own money stories straight
Because you send your children messages about money all the time, it
is imperative that both you and your spouse are on the same page when
it comes to your money stories. A money story is an open, honest and
personal story of your relationship with financial issues, especially
as you grew up because most people's relationship with money developed
during childhood. You need to identify why you feel the way you do
about money so you can send coherent and consistent messages to your
kids. When both parents focus on their money stories, children receive
positive messages. Getting your money stories straight does not just
mean that you agree on basic issues such as allowances and college
savings. It also means that both of you have agreed to identify
certain basic money values you want to teach your children, such as
giving is good, working hard is its own reward, and you don't always
get everything you want.
3. Facilitate financial reflection
As with most decisions kids make, when it comes to money decisions
they are frequently impulsive. As a financially intelligent parent,
you want to teach your children how to think in terms of choices,
alternatives and consequences. This is called reflective thinking.
Learning how to reflect both before and after making a decision is a
great life skill, and one that is the hallmark of people who make good
choices in everything from careers to relationships to investments.
Financially intelligent parents teach their children to evaluate
financial consequences based on available choices rather than making
impulsive decisions. As a result, children recognize that there are
many options available and they acquire the skill to make good
choices.
4. Become a charitable family
By teaching your children that they can do more with money than spend
it on themselves, you encourage them to become more compassionate and
caring. By participating as a family in volunteer and community
activities, you help your children develop empathy and a sense of
responsibility to others. Your children will realize they have the
power to make life better for others. Because children learn through
modeling behavior, you have to do more than write a check to charity.
You need to show your children what it means to help others. Modeling
charitable behaviors, including volunteerism, can jump start your
child's empathy and desire to help others.
5. Teach financial literacy
Although it is important to teach children how to balance a checkbook
and create a budget, to become truly financially literate your
children must learn within a context of values and money behaviors.
Your children need a combination of concrete examples, their own
experiences and financial reflection. If they do not learn to behave
responsibly with money as kids, they will have to learn as adults when
the cost is much higher. One of the best tools to teach your children
financial literacy is an allowance. Approaching allowances in a
consistently constructive way allows you to instill decision-making
wisdom in your children rather than controlling them. An allowance
also helps your children gain a well-balanced perspective about money,
encouraging saving, investing and giving, in addition to spending.
6. Awareness of the values you model
Your children are tuned in to your purchasing decisions. The ways you
spend your money sends messages to your children about your values and
life priorities. Children also notice how you spend your time and your
actions can unintentionally send messages you did not intend your
children to receive. When you miss opportunities to spend time with
your children in order to put in extra hours at work or manage your
money, you are sending a message that money is more important than
family. Financially intelligent parents are highly conscious of their
spending habits, as well as how they balance their work and family
time, and the values they communicate.
7. Moderate extreme money tendencies
Extreme money tendencies can evolve into money disorders which cause
chaos within your family and send the wrong messages to your children.
There are several types of money disorders, ranging from excessive
shopping to racking up credit card debt to excessive frugality.
Regardless of the disorder, extreme money tendencies cause your
children to experience confusion and insecurity in their lives.
Financially intelligent parents learn to recognize and moderate
extreme money behaviors.
8. Talking about the tough topics
Parents avoid talking about financial topics that make them
uncomfortable or that seem too complicated. Although you model good
money behaviors in certain ways, unless you compliment these behaviors
with good money conversations, you are not being as effective as you
could be. Financially intelligent parents recognize teachable times
each day that give you and your children the opportunity to talk about
financial issues. You should welcome these opportunities, as difficult
as they are, to discuss and reflect on financial decisions.
Eileen Gallo, Ph.D., and Jon Gallo, J.D. are experts on children,
families and money, and the authors of The Financially Intelligent
Parent: 8 Steps to Raising Successful, Generous, Responsible Children
(New American Library/Penguin Group). For more financially intelligent
parenting tips and tools, visit http://www.FIParent.com.
What you say and do about money has a profound influence on your child. There are money moments every day that you can use to teach your children important skills and lessons about life. But what to say or do isn't always obvious. Is it a good idea to pay for chores or grades? How do you help your child develop a work ethic? How do you
structure an allowance to help your child learn to make choices? Why is involving your children in charity so important? Jon and Eileen Gallo, experts in the fields of children, psychology and money, provide parents with eight key behaviors that will help them raise financially responsible children:
1. Encourage a work ethic
Work ethic is a learned behavior, and parents are the best models to teach kids to acquire it. If you want your children to work hard and derive meaning and satisfaction from what they do, make sure you are modeling the right messages. Insisting your kids do their homework and
help around the house does not guarantee they will grow up with a sense of accountability and a desire to achieve. Developing a work ethic in your child is a holistic process and the eight money
behaviors of a financially intelligent parent are keys to this process.
2. Get your own money stories straight
Because you send your children messages about money all the time, it is imperative that both you and your spouse are on the same page when
it comes to your money stories. A money story is an open, honest and personal story of your relationship with financial issues, especially
as you grew up because most people's relationship with money developed during childhood. You need to identify why you feel the way you do about money so you can send coherent and consistent messages to your kids. When both parents focus on their money stories, children receive positive messages. Getting your money stories straight does not just
mean that you agree on basic issues such as allowances and college savings. It also means that both of you have agreed to identify certain basic money values you want to teach your children, such as giving is good, working hard is its own reward, and you don't always get everything you want.
3. Facilitate financial reflection
As with most decisions kids make, when it comes to money decisions they are frequently impulsive. As a financially intelligent parent, you want to teach your children how to think in terms of choices, alternatives and consequences. This is called reflective thinking. Learning how to reflect both before and after making a decision is a great life skill, and one that is the hallmark of people who make good choices in everything from careers to relationships to investments.
Financially intelligent parents teach their children to evaluate financial consequences based on available choices rather than making impulsive decisions. As a result, children recognize that there are many options available and they acquire the skill to make good choices.
4. Become a charitable family
By teaching your children that they can do more with money than spend it on themselves, you encourage them to become more compassionate and
caring. By participating as a family in volunteer and community activities, you help your children develop empathy and a sense of responsibility to others. Your children will realize they have the
power to make life better for others. Because children learn through modeling behavior, you have to do more than write a check to charity.
You need to show your children what it means to help others. Modeling charitable behaviors, including volunteerism, can jump start your
child's empathy and desire to help others.
5. Teach financial literacy
Although it is important to teach children how to balance a checkbook and create a budget, to become truly financially literate your children must learn within a context of values and money behaviors. Your children need a combination of concrete examples, their own experiences and financial reflection. If they do not learn to behave responsibly with money as kids, they will have to learn as adults when the cost is much higher. One of the best tools to teach your children financial literacy is an allowance. Approaching allowances in a consistently constructive way allows you to instill decision-making wisdom in your children rather than controlling them. An allowance also helps your children gain a well-balanced perspective about money, encouraging saving, investing and giving, in addition to spending.
6. Awareness of the values you model
Your children are tuned in to your purchasing decisions. The ways you spend your money sends messages to your children about your values and
life priorities. Children also notice how you spend your time and your actions can unintentionally send messages you did not intend your children to receive. When you miss opportunities to spend time with your children in order to put in extra hours at work or manage your
money, you are sending a message that money is more important than family. Financially intelligent parents are highly conscious of their
spending habits, as well as how they balance their work and family time, and the values they communicate.
7. Moderate extreme money tendencies
Extreme money tendencies can evolve into money disorders which cause chaos within your family and send the wrong messages to your children. There are several types of money disorders, ranging from excessive shopping to racking up credit card debt to excessive frugality. Regardless of the disorder, extreme money tendencies cause your children to experience confusion and insecurity in their lives. Financially intelligent parents learn to recognize and moderate extreme money behaviors.
8. Talking about the tough topics
Parents avoid talking about financial topics that make them uncomfortable or that seem too complicated. Although you model good money behaviors in certain ways, unless you compliment these behaviors with good money conversations, you are not being as effective as you could be. Financially intelligent parents recognize teachable times each day that give you and your children the opportunity to talk about financial issues. You should welcome these opportunities, as difficult as they are, to discuss and reflect on financial decisions.
For more financially intelligent parenting tips and tools, visit
www.FIParent.com .
About the Author
Eileen Gallo, Ph.D., and Jon Gallo, J.D. are experts on children, families and money, and the authors of The Financially Intelligent Parent: 8 Steps to Raising Successful, Generous, Responsible Children (New American Library/Penguin Group), and the web site www.FIParent.com .
