Can you say that you are truly satisfied with your financial situation, even if you earn a decent income? Usually, we find it difficult not to worry about money, whether that is settling debt, saving for the next big purchase or family vacation, or investing in our kids’ schooling. Despite our best efforts to work hard and earn an income, we often feel overwhelmed by our financial demands. As parents, we only want the best for our kids and, of course, want to see them thrive financially as adults. What you may not realize, is that your financial concerns will likely become your children’s financial concerns. Your kids will adopt your money mindset. Financial struggle is generational, but it’s also changeable.
“So many individuals, regardless of their academic intelligence, effort or even income, tend to achieve no greater financial success than their parents or peer groups.”– Dave Fisher, Destination Wealth
You can teach your kids to be rich
Growing up we often heard our parents say “there’s no money” when we asked for something. And, as a parent, you have probably found yourself mindlessly repeating that expression to your kids. Note that they heard it, and they remember it. On the other hand, you may have indulged in excessive spending with your kids stacked up in a trolley filled with shopping bags. Keep in mind that your spending habits are rubbing off on your kids.
“Whether it’s what parents buy, how often they buy things or whether they look for deals, children are watching just how their mom and dad spend money. Some experts even believe that this is one of the biggest financial patterns kids adapt early on.”– Elizabeth Gravier (in an interview with Mac Gardner, financial literacy advocate for young children)
In fact, our innate tendency to mimic others starts as early as infanthood. Sharon O’Day explains “as infants just learning how the world functions, we soak up everything our parents, siblings and relatives do. They are our role models, after all, our only resource”. (How to Raise Kids with Healthy Beliefs About Money)
‘Monkey see, monkey do’ is part of our biological makeup
In his book, Destination Wealth, Dave Fisher discusses a study done by Italian scientists in the early 1990s. The study discovered mirror neurons, which are neurons that fire when we perform an action and when we see others performing the same action. These neurons lead us to mirror others’ actions, which is usually the case with kids. Kids learn by copying those around them – usually their parents and peers. This behavior then seeps through into how they think about and deal with money. This is not always a voluntary reaction, and its innateness is what makes it difficult to unlearn.
As such, in order to pave the way to your children’s eventual financial freedom, you – the parent – have to rethink your thinking about and approach to money. Whether it’s mindlessly encouraging the “there’s no money”- talk or exercising poor spending habits, it will eventually cause a negative belief system that may jeopardize your children’s financial wellbeing.
It is important to become aware of the imprint that your financial behavior can leave on your kids.
Luck determines your financial context
The truth is, what you think and feel about money is not entirely your fault. Our money mindset and financial context are ingrained in us from an early age. Dave explains that “our upbringing, our parents, our peers and their beliefs about money are our most influential context shapers”. Luck determines your financial context. We don’t get to choose our childhood situation, our parents’ financial history or who we go to school with.
Due to our financial context, we are often stuck in a financial rut. We are educated, intelligent, work hard, and may even earn a good income, but still we battle to achieve financial success beyond our present situation. Dave says “when people acquire more wealth than their financial context has prepared them for, they cannot help but sabotage themselves”. Unintentionally, our belief and behavior towards money are detrimental to us, and, if we don’t address the issue, our kids will inevitably sabotage themselves financially as well.
Uplift yourself, uplift your kids
Parents can encourage a good money mindset in their kids from early on. In order to do this, we have to address our negative thoughts and feelings about money and learn financial behavior that you want your children to benefit from in the long run.
“You won’t be doing them any favors by protecting them from that bugaboo called money — through silence or by indulging. In fact, one of the greatest gifts you can give your kids is to prepare them to be responsible, empowered adults around money.”– Sharon O’Day
So, to encourage your child’s financial wellbeing, you will need to first assess your own relationship with money. Once you acknowledge those negative beliefs, thoughts and behaviors that are withholding you from elevating your financial situation, you have the power to cultivate your money mindset and upgrade your financial context.
Five actions that will change your money mindset and uplift your financial context
In his book, Dave shares five actions that will change your thinking and uplift your context:
1. Start with a vision
Consider that money is a vehicle to you living your dream. Ask yourself, why is having more money important to you? What will your financial independence allow you to do? If you know your vision, you can find perfect alignment among your purpose, context, income and lifestyle.
2. Take stock
Once you have your vision in place, assess your circumstances. Are you satisfied with your achievements? Do you think you save enough money? Are you satisfied with your income and your lifestyle? Are you frustrated with your finances? Does your budget cause stress? Do you like your job? Are you on the path to achieve your dreams? If taking stock leaves you feeling unhappy about your current situation, it is a sign that your financial context does not align with your vision.
3. Decide to change
“A learning mindset is essential for living a meaningful life and building wealth. Being stuck in existing beliefs can be detrimental,” says Dave. If you’re unhappy about your situation, make a decision to change. Start small by simply monitoring what you say to yourself about money – negative self-talk shapes your money beliefs and ultimately your behavior towards money. Use affirmations to cultivate an ‘abundance mindset’. Your money mindset feeds into your context. Once you change your thinking around money, your financial context will follow suit.
4. Invest in your success
Where we invest our money usually signals what we value most. You may invest in your kids’ top-notch schooling, in your church community, in your family or in your business. Consider whether you value wealth creation and how much you are willing to invest in it. This may be in the form of empowering yourself with knowledge about your finances or getting in touch with a financial planner to guide you through the process.
5. Mirror the right people
Like our kids, we too rely greatly on influencers to mimic in our lives. This may come in the form of peer groups. If your circle harbors self-limiting money beliefs and a less than desirable financial context, you will likely adopt it. “You cannot soar like an eagle if you hang around with the turkeys,” illustrates Dave. Move away from those who introduce negativity about money in your life. Join a circle that stimulates your abundance mindset and uplifts your context.
Be the force of financial influence that your kids need
If you can come to terms with your own financial situation and take action to change your money mindset and financial context, you are your own superhero… you can save yourself from your financial woes. In doing so, your kids witness first-hand how your relationship with money is positive, stress-free and abundant.
What you can do right now to empower your kids financially
- Demonstrate your financial know-how to your kids by considering how they perceive things that may seem perfectly harmless to us adults. For example, limit spending sprees that leave you feeling guilty and anxious afterwards. Show your kids that money has value and shouldn’t be misused or abused. Consider using cash instead of cards. Kids’ impression of money is limitless if they equate money with a piece of plastic that never runs dry. Purchasing goods with physical money creates the image that there is money, and when it is given in exchange for an item, the money is gone.
- Feed your young kids’ brains with healthy impressions. For example, as a mother, demonstrate your financial prowess to your daughter. Show her that women should be financially empowered and are just as capable of being money savvy. As a father, show your son that it’s okay to take downtime with your family, and that work – chasing wealth – isn’t everything.
Empowering your kids with the ability to take control of their financial destiny is a gift that keeps on giving. To truly harness this power, start with you. Cultivate a positive money mindset and uplift your financial context. Set yourself on a path to wealth creation, and you will equip your kids with the tools they need to be their own financial superheroes.
Destination Wealth will be available soon. Follow #destinationwealthbook to receive regular updates.