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Ask A TFI Clinician: How to Talk to Your Kids About Money

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It’s tax season, and as a result we are examining money and financial issues at TFI Talks, and how they impact families.

Today’s insights come from Dr. Aaron Cooper, PhD. Dr. Cooper is a licensed clinical psychologist at The Family Institute, where he works with individuals, couples and families. In 2008, Dr. Cooper co-authored I Just Want My Kids to be Happy: Why You Shouldn’t Say It, Why You Shouldn’t Think It, What you Should Embrace Instead, which received highest honors in the 2008 Mom’s Choice Awards and was a finalist in the 2008 Indie Excellence Awards. His thoughts about youth and family issues have been cited in over 500 newspapers, magazines and websites from coast to coast.

 

We want our kids to learn to be comfortable with money, not to fear it or overvalue it.

“Because money is one of the topics that couples fight about the most, we want our kids to have a balanced and healthy approach to money so they can bring that approach into the future relationships.

Here are some of the significant lessons our kids should learn about money:

  • Money is just one of the things we value in life, not the most important thing.
  • Money shouldn’t be an end in itself, but a means of accessing things that are important in our lives (like education, health care or food).
  • Money should never be used to signify a person’s worth, and we must never discriminate against people who have less money, nor esteem people just because they have a lot of it. Character and deeds signify a person’s worth, not how much money they have.”

 

Your kids can handle it—and they should.

“We must debunk the notions that children cannot understand concepts pertaining to money, or should never be within earshot of parents discussing money matters. In fact, children as young as five can learn the concepts of “saving for a rainy day,” “save some/spend some,” and the value of charity and generosity.

Parents often avoid talking about simple spending decisions in front of the children, which can be a mistake. So long as parents have the skills to discuss and debate and handle differences respectfully, there can be value to kids hearing parents talk about the pros and cons of certain spending decisions.

Conversations about money and spending can transmit to children a variety of important values, like sharing, collaboration, generosity, respect for all, and being reflective rather than impulsive. Children should learn:

  • That spending decisions should be made thoughtfully
  • That it’s important to balance saving against spending
  • That it’s important for big spending decisions to consider the preferences of different family members (and not just one family member).”

 

Resist the urge to Interfere.

“It’s common for parents to interfere with their children’s spending decisions, hoping to prevent “mistakes,” rather than allowing the child to experience and learn from the sometimes negative consequences of poor spending decisions. Children who receive an allowance ought to spend their allowance as they see fit, which is a kind of freedom many parents have trouble allowing.

Parents often tie allowance to doing jobs around the house. Those two elements are best not linked.  Children should perform household tasks because it’s part of being a member of the family and making a contribution; it’s part of belonging. Allowance represents money that parents provide just so that children have access to funds of their own and can start to learn essentials of money management that way.”

 

Next week, Dr. Cooper will provide concrete tips on how best communicate money and financial issues with your children, and concrete ways to impart healthy habits.

 

To read more of Dr. Cooper’s expert tips on TFI Talks, click here.

To read more about Dr. Cooper or to make an appointment, visit his bio on our website.

The Family Institute offers affordable family, couples and individual counseling at our Evanston, downtown Chicago, Lagrange Park and Northbrook locations. Visit our website to learn more.

 

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