Parents: let's put on a (personal finance) show!
Once upon a time, managing money was something we could see. Mom or Dad would sit at a table surrounded by paper statements and bills, writing checks and balancing the register. Cash was received at a bank branch, maybe even from a teller.
Many important associations with money were formed by witnessing these activities. We might notice a parent who got very stressed when the checkbook came out, or discussions about expenses that quickly descended into argument. Or we may have seen money management as a normal and neutral (maybe even positive!) aspect of the family's operations.
Money management activities today can be a bit more mysterious, if not completely invisible to children. We may check balances on our phones (indistinguishable from the other million times a day our kids see us looking at our phones), or pay bills online during a few minutes at lunch (if we directly pay bills at all). We get cash from points of sale or ATMs that we hit during our rush to get somewhere else.
This can leave kids with a skewed understanding of what it takes to direct and manage finances. Money seems to just happen automatically, without much attention. Often there are systems or institutions who capitalize on this inattention, protecting us from accidental oversight or promising to monitor our accounts and alert us if there's anything we need to know.
So as parents, one of the most important parts of financially educating our kids involves finding ways to bring money management to life so that it doesn't just happen behind the scenes.
It might take real effort to make money management more visible in your family. It's easier to use the conveniences of automation and mobile access. This is especially true if money is a stressful trigger. We look for ways to minimize our exposure to things that cause distress.
In a sense, when we make money management visible we're putting on a show. We choose what and how we demonstrate to our children about money.
Kids pick up on this performance on various levels, and that's why it's important to pay attention to scene, script, roles, and routine.
What do our kids see when they look at us managing money? Are we shuttered off in a dark corner, muttering angrily to ourselves? Or are we integrated with family life, accessible for curious questions? I understand it can be hard to review an account statement while sticky fingers reach for your keyboard. I used to pay bills after the kids were asleep for this very reason. But you'd be surprised how many young adults come to my practice who've never learned that it's normal to review expenses, plan for cash flow, or read through account statements.
What language do we use with money, and how do we dialogue with others? When it comes to money, words matter. I recently changed how I talk about my usual Saturday practice, saying "Mommy's managing our money,' instead of "Mommy's paying bills." I want them to frame what they see as something positive and self-directed, as opposed to reactive and compulsory. Language and tone are especially important when choosing how to communicate with loved ones. Watch out for panicked or accusatory tones when asking your spouse to explain that recent charge at the Apple Store.
Who takes which responsibilities when it comes to managing the family's money? In two-parent households, does one person do it all, while the other declares him- or herself "hopelessly terrible" with numbers? Ideally children should see a flexible back-and-forth, where both parents treat each other as competent and equally responsible. It's okay to have different jobs, but no grown up should be exempt from money matters.
There should be a predictable choreography to our financial management process. Mail gets opened every day, bills are paid weekly, accounts reviewed and reconciled each month, investments quarterly. Children need to see that money exists within a framework of time, and that inattention to time brings a swift consequence of disorder. It shouldn't be, "Crap! Didn't I just pay that?" or "I think I'll jump on Mint.com today." Without choreography, the actors crash into each other and the audience can tell the scene is a mess.
If all of this makes you feel a little stilted and self-conscious, don't worry. As with real theater, the more you rehearse the more comfortable you'll feel. And you couldn't be in front of a more receptive audience.