The Gifts We Give Our Kids
The most valuable things you give your children won't cost a cent
Most parents strive to give their kids the best life possible. History is full of tales of generations of people who have scrimped, saved, and worked tirelessly so that their children could have things easier than they did. We work to provide opportunities that will position children to flourish and thrive. We want to protect them from the pain of scarcity and want. But the calculus of what and how to give to our kids is complex. No one wants to raise a spoiled brat.
Advertising and attempts to get us to spend our money bombard us at every turn. This is particularly true, especially around the holidays. But, we don't like to talk about money. We definitely don’t spend much time discussing some of the difficulties that wealth can create. At the suggestion that the affluent struggle, some people roll their eyes and muse, “When so many people have hardly anything at all, how hard can it really be to have lots of money?" We don't believe that, in some cases, wealth can be burdensome and can turn into too much of a "good" thing. Having more money doesn't make problems go away. It changes your challenges.
In my clinical practice, clients talk to me frequently about financial stress. I see how money impacts all aspects of our lives. When I work with affluent families, a common concern is how not to let their wealth hurt their kids. It's not a champagne problem–it's a real threat. Entitled children who are used to having everything handed to them can be monsters as adults. Individuals who lack financial discipline and exhibit a poor work ethic because their early environment didn't require it often become poor pilots of their own lives.
There is often unique tension for parents whose own life stories have followed a rags-to-riches arc. Many individuals who have managed to jump socioeconomic rungs recognize that part of what helped them create their current life came from things they learned through their own experiences and struggles. They wonder, "Is it possible to recreate valuable money lessons without replication of the same financial challenges I faced?" Parents with more resources to raise their children than their own parents had may grapple with how to handle money with their own kids. They want to teach fundamental financial principles and virtues to position their kids for success.
Raising tiny humans is the most humbling thing I've ever done. I'm in the trenches trying to figure out how to best raise generous, grateful, hard-working children who will become generous, grateful, hard-working adults. My husband and I sometimes wrestle with what this should look like in practice. We are both in the category of kids who grew up in homes with hard-working parents who had very limited financial resources during our childhoods. I grew up on a farm in the Midwest. When I was young, the markets were abysmal and my parents were hemorrhaging money. My husband’s parents were missionaries in the third world. We never went hungry, and the lights were always on. Still, my husband and I were conscious from a very young age that there was not much money to go around. Every time I take my kids out to eat or book an Airbnb, I am struck with the contrast of my own early childhood financial benchmark with theirs. How do I help them appreciate "how good they have it" and instill the foundations to help them build their own financial security?
When it comes to parenting, I will never pretend to have things all figured out. (No one does—if they tell you otherwise, they're fooling themselves or lying.) But, as a parent and a psychologist who works in the finance industry, when it comes to kids and money I have a few thoughts…
The cost of what you buy your children doesn't determine its value to them–the quality of your relationship does. My children will have no appreciation for how much anything under our Christmas tree costs. As military brats, they spent most of the summer playing with boxes and packing tape while we waited three months for our belongings to arrive following an international move for my husband's latest military assignment. Older kids who may have more of a sense of what things cost can often catch on pretty quickly if someone is trying to replace time or presence with nice things. I talk to these people in therapy. Trust me, this strategy doesn't work. You can't buy love.
A want is not a need. It's important for people, young and old, to discern what is essential and what is "nice to have." When people treat wants as needs, they can easily justify going to great lengths to secure an object of desire.
Respond gracefully to "no" and "not now." The ability to delay gratification is a crucial life skill. We can't always have what we want exactly when we want it. It's important that kids start to develop the ability to tolerate the discomfort and manage the feelings that this reality principle creates. I'm committed to weathering the (thunderous) storms with my kids when they don't get everything they want in the store. I don't want them to turn into adults who throw adult-sized tantrums in the future. Giving in to your kids to make whining stop when their wishes aren't immediately indulged may be an easier option today, but this pattern will create bigger problems downstream.
Instill stewardship. My earliest memory of money is bringing a frosting container of change to church to put in the offering plate when I was four years old. I want my children to understand that their money is not just about them, no matter how large or small the sum. Money is a tool. Whatever amount has been entrusted to us at any given time, money comes with responsibility. I am trying to raise my kids to look outside of themselves and seek opportunities to use the resources they have to improve the lives of others. Giving is a discipline, practice, and one of the greatest gifts in the world.
Talk about money thoughtfully with your kids on a regular basis. Not talking with your kids about money doesn't mean kids aren't having thoughts or feelings about it. It's important to consistently have developmentally-appropriate conversations about the topic. I want to raise my children to be financially conscious, skilled, and confident. To do so, I need to normalize talking about money.
Monitor the tenor of the discourse when discussing money with your kids(read: don't transmit your financial anxiety to your kids). If children hear parents talking about not having enough money or struggling financially, make crystal clear that it is not a child's responsibility to solve parents' money problems. Kids can't meaningfully control a family's financial situation. If they start taking ownership of something out of their control, they may become a bundle of anxiety. Parents need to provide reassurance when kids pick up on financial strain. Remind children that their responsibilities within the family are different than a mom or dad's.
It's my job to educate my kids about various aspects of financial life. My husband and I encourage curiosity, learning, and asking questions about the topic. My daughter loves looking at stocks with her dad. She can't yet articulate the difference between value and momentum investing strategies, but early exposure to conversation and information will help increase the likelihood that investing and other aspects of money life aren't daunting to her later on.
Teach the difference between having and affording. My maternal great-grandmother lived through the Great Depression. I never met her, but her sage financial wisdom was passed down to me by my mother. When I would look at the people around me and beg for some of the things they had, I would be reminded by my mom, "Just because they have it doesn't mean they can afford it." I want my kids to understand that if they make a choice to live a life they can't afford, they will feel stressed and suffocated. Learning to live contently within your means is freedom.
Just because you can buy something for your kids, doesn't mean you should. Growing up, most of my clothes, shoes, and toys were second-hand. It was all that my parents could afford at the time. When I run the math, I can afford to buy more things "brand new" for my littles, but that doesn't mean all of it is necessary. Kids grow like weeds and destroy things—fast. Lucky for me, recycling and reusing are now very in vogue. Even if it wasn't, I believe my kids will be better off if they aren't used to always having the latest and greatest of everything the world tries to sell to them. Based on their choices for professions or partners, there is no guarantee that they will have the same resources available to them that my husband and I do right now. They may have more. They may have less. While I will take care not to create an environment of scarcity or undue financial stress, I think it's wise if their ability to practice contentment is not contingent on everything being expensive or brand new.
Kids need to know where money comes from so they can figure out how to get it for themselves. Money doesn't come from a credit card or The Bank of Mom and Dad. My money is not automatically and unconditionally my children's money. I work for mine, and I believe it's important my kids learn to eventually work for theirs. There is no one-size-fits-all rule for when or how much money to share with your children or when to give it to them. But kids need to know that Dad or Mom won’t pay for anything, any time, for the rest of their life. I'm not helping my kids if they don't know how to go out into the world, contribute to society, and be compensated fairly. My husband and I have intentionally fostered an entrepreneurial spirit in our children from a very young age. Our twins started their first recycling business when they were four. We're having them develop the practices of saving, giving, and spending their own earnings. Someday my son and daughter will live independent of me. They shouldn't rely on my money in perpetuity.
Tell the truth. Don't keep financial secrets from your kids. My young children don't need to know every detail of my balance sheet, but it will be a problem if I hide the truth of my financial situation from my kids for decades of their life. Sometimes parents conceal information about wealth or how dire a financial picture is because they think they're "protecting" their children. Sadly, this decision, while well-intentioned, often has a different impact. Pretending you have more money than you do isn't going to help your child. It's modeling financial denial and unhealthy behavior. Conversely, hiding wealth from your kids can hurt your relationship too. You may think that telling your adult child they will come into an unexpected windfall will be a pleasant surprise, but this kind of news can be overwhelming, emotional, and erode trust.
Kids pick up on financial dynamics in a home more than people give them credit for. People's first money memories are often burned in their brains far earlier than most adults think. I've spent more than a decade sitting with clients in a therapy office. People talk about money with their shrink as much as they discuss other taboo topics like sex and death. It's an emotionally-fraught topic that's tied to so many deeper things—security, significance, trust, safety, power, status, and control. I know if I can help my kids learn to manage their money so that it doesn't master them later on, I will give them a priceless gift.
I'm grateful for the financial heritage I received from my parents. They didn't give it to me by writing a check. Instead, they modeled prudent financial behavior and helped me practice my emerging financial skills while I lived under their roof. The economic milieu of my early childhood shaped me. It wasn't always easy, but I'm forever thankful for what I learned experientially. My kids are living in a different classroom. To ensure they receive many of the same lessons, I must take an active role as their educator, model, and guide.
My goal as a parent is not to provide my kids with the easiest life possible. I don’t want my short-term attempts to “help” to ultimately hold them back. It's not my job to protect them from challenges. Instead, I want to help them develop the competence and confidence to do hard things. They will learn to cope by coping. I want to raise resilient kids with perseverance and grit who can tolerate discomfort. My kids will face different hurdles than I did. My role is not to constantly rescue them. Doing so will only rob them of invaluable opportunities to grow. The best things I'll ever give my kids won't cost a cent.
A picture is worth a thousand words… last year when I was at my parent’s house I found this relic. It was one of the aforementioned “spend” “save” and “give” frosting containers. Needless to say, thirty years later, the scratch-and-sniff sticker no longer smelled like a watermelon.
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