As a mom who writes about money for a living, I figured my 6-year-old daughter would learn a lot about personal finances from overhearing me talk about my work. She’s listened to me give radio interviews espousing the benefits of budgeting, and heard me talk at the dinner table about the importance of frugality.
The behavior I was modeling, though, was severely undermining many of those lessons. She noticed that when we went out for dinner, it was almost always her dad who picked up the bill at the end of the meal. (In fact, I often left my wallet at home, knowing he had his.) When she heard her father and me talking about bills and saving for college, she probably could tell that while I was handling many of the monthly bills, her dad was managing many of the longer term savings accounts. Until recently, I am embarrassed to admit, I didn’t even know some of the passwords.
As I researched my new book, “Smart Mom, Rich Mom: How to Build Wealth While Raising a Family,” I realized that I was probably passing on harmful lessons to her and that the situation needed to change immediately. The dozens of smart moms I interviewed taught me how essential it is not only that I take more control over our family finances, but also that I demonstrate that behavior to my daughter, so she can learn from it.
A 2014 survey on parents, kids and money by T. Rowe Price found that boys are more likely than girls to say their parents talk to them about setting financial goals (58 percent versus 50 percent). The survey also found that boys are more likely to consider themselves smart about money and to say that their parents are saving for their future college tuition.
Those gender differences are pretty disturbing, and I can’t help but wonder if they are related to the fact that surveys repeatedly show that as young adults, women tend to save less, invest less and earn less than their male peers. One 2014 Wells Fargo survey found that women in their 20s feel less satisfied with their money than their male peers, and that the women carry more debt.
The moms I interviewed who I admire most when it comes to money were in constant communication with their children about the financial choices they were making for their families. Those useful conversations include the mistakes that they made with money; how and why they earn money and what it pays for; and how they are saving for big goals such as a family vacation or college tuition.
I started trying to incorporate these money-related discussions into our daily chats. On the way to school, when my daughter asks for a story from my childhood, I tell her how I made a budget before my parents let me get a hamster, and about my first job running a neighborhood summer camp.
I could tell she started thinking more about money, too. She often reminds us now that we shouldn’t go out to lunch, because it’s too expensive. Or she offers to share her piggy bank savings with us if we ever run into hard times (I really appreciated that one). After helping me pay the water bill one morning, she brainstormed ideas for how we could reduce our water consumption. When her 3-year-old brother bemoaned the fact that I had to go to work on a day he didn’t have school, she calmly explained to him, “Mommy has to work so we can live in our house.”
Like highly trained CIA agents, our kids are studying us all the time — even when we think they’re distracted. Sometimes it’s shocking to hear them repeat our words back to us; sometimes it’s adorable. One thing is for sure: In all things, from eating to getting dressed to interacting with our partners to paying for a restaurant meal, we are their models.
Kimberly Palmer is the author of “Smart Mom, Rich Mom: How to Build Wealth While Raising a Family,” from which this piece is adapted. She lives in the Washington area with her two children.
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