In Part One we examined four of the beliefs of financially intelligent parents:
- Financially Intelligent Parents Are optimistic about their ability to change money behaviors.
- Financially Intelligent Parents value the difference between financial savvy and financial intelligence.
- Financially Intelligent Parents think long and hard about the meaning of money in their lives.
- Financially Intelligent Parents consider the financial education of their children a primary parenting responsibility.
Financially Intelligent Parents recognize that their unconscious money deeds have at least as much impact on their kids as their conscious money words.
We are communicating to our children about money all the time. Sometimes it is verbal and intentional, such as when we have discussions about allowances or summer jobs. Other times our children absorb messages about money from our behavior, such as observing the way we treat the sales clerk at the department store or seeing us put money in the Salvation Army kettle at Christmas. Research shows that as much as 90% of communication is through non-verbal modeling behavior; it is what we do, the tone of our voice, our eye gaze, our gestures and our posture.
Understanding this concept helps us make the unconscious conscious. Financially intelligent parents recognize that they are sending the wrong message when they fail to give a food server or a taxi driver an adequate tip or when they talk about how they wish they could have been the one to make a million dollars through insider trading. While no one can catch and control all his negative messages, the goal is to catch and control some of them.
Financially intelligent parents also understand that they may be sending their children money messages because of unresolved issues from their own childhood. In Parenting From The Inside Out, Dan Siegel and Mary Hartzell point out that experiences parents have with their children often trigger the parents’ unresolved, leftover issues from their childhood. When such an issue is triggered, they experience what psychologists call “implicit memories.” These memories are recalled so fast that it feels as if they are happening right now rather than in the past, and thus trigger the childhood feelings that accompanied the original experience. Here is an example of how implicit memories can affect the money messages children receive.
Larry and Mary have a 15 year old son, Chris. When Larry was a child, his father would become angry and emotionally abusive if Larry ran out of allowance money before the end of the week and asked for an advance. Larry’s dad would scream that he was going to be a failure when he grew up because he couldn’t manage money. Larry said that when his father yelled at him like this, he would feel rejected, fearful and angry. When Larry and Chris have disagreements over money, Larry sometimes experiences that disagreement as a personal rejection, rather than as a teenager reflexively rejecting his father’s advice. The feeling of being personally rejected triggers Larry’s memories of his own father and he becomes angry and fearful.
Emotions such as anger, fear and rejection interfere with our ability to use our pre-frontal cortex, the part of the brain that allows us to be rational and reflective. As a result, we end up sending the wrong messages to our kids in these moments. Like Larry, we might respond to our child’s reasonable request for money – summer music camp tuition, for instance – by worrying about the cost and making our child feel guilty for no reason. If we repeat this type of behavior regularly, we may raise a child who feels guilty about spending money on himself for any reason!
The belief here helps parents think before they act, especially when it comes to money issues. Financially intelligent parents spend a few minutes at the end of each day asking themselves why they reacted the way they did and whether their behaviors expressed their values.
Financially Intelligent Parents feel that “no” and “enough” are words that children need to hear as part of their money education.
Under the mistaken notion that they can never give their children enough, some parents shower their children with gifts at all ages and routinely give in to pleas and demands for more. They may set limits in other areas of a child’s life, but when it comes to money, they just can’t say no.
Sometimes this is due to guilt – they’re trying to compensate for being away from home so much, a common problem among parents pursuing high-powered professional careers. In other instances, limit-averse parents are responding to a childhood in which their parents always said no. They want to give their children what they never had, and as a result, they believe in indulging their child with few if any limits.
It is easier to say no in theory, of course, than when staring into the eyes of a child you love who acts betrayed and hurt when you say no. Recognize, however, that the importance of limits is psychologically sound. In all areas of their lives, kids need limits. As much as they might act as if they don’t want them – especially in adolescence – they actually crave boundaries. These boundaries give them a sense of security; it structures their lives and helps them deal with the complexities and uncertainties of growing up. Though kids often push against these boundaries and sometimes cross them, they also need them. Allow children to have anything they want and you foster a sense of entitlement and diminish their drive to achieve. In fact, overindulged children tend to lack a sense of self-worth: They believe that they are not important enough for their parents to bother to set limits.
The art of saying no is one that financially intelligent parents master. It is an art because they must balance the no’s with yes’s. There are times when kids deserve rewards and should be allowed to exercise financial independence. A belief in saying no, however, gives parents the inherent right to set limits when necessary. As a result, they don’t feel like they are being mean or withholding love when practicing financially intelligent behaviors.
Financially Intelligent Parents want their children to work for love more than for money.
Children who are passionate about a given activity or interest exhibit what social psychologists call autotelic behavior. Autotelic is a word composed of two Greek roots, auto, which means self and telos, which means goal. An autotelic activity is one we do for its own sake, because to experience it is the main goal. In other words, autotelic behavior is behavior we engage in because we enjoy it, rather than for a reward or out of fear of failure.
When we use money to motivate our children, we are creating external motivation rather than relying on their own enthusiasms and passions. As psychiatrist Ed Hallowell points out in The Childhood Roots of Adult Happiness, we want motivation to come from the inside and not be supplied from the outside. “You may still deal with carrots and sticks, but if the carrot and the stick come from within a person, that system will last much longer than if the motivation comes entirely from the outside.” Hallowell believes that using money to motivate children is as likely to produce a depressed adult as it is to produce a materially successful one.
Social psychologist Mihaly Csikszentmihalyi, who coined the term autotelic, points out that the less parents rely on external motivators and the more they concentrate on helping their children become internally motivated, the happier their children will be. If you overemphasize the importance of money or rewards in achieving a goal, rather than the process of achievement itself, you run the risk of turning your child into a kind of money junkie who has no true enthusiasm for anything except more money. This is not a recipe for a meaningful or happy life.
USC economist Richard Easterlin, who has pioneered studies on the relationship between material goods and happiness, observed in an L.A. Times interview that the more we make, the more we want. Using money as a motivator simply makes us want even more. If materialism is our motivating factor, we can never get ahead of our material wants. Social psychologists call this the hedonic treadmill. The hedonic treadmill ensures that very few of us can be very happy for very long if what motivates us is getting more. As Easterlin comments, “The more you have, the more you need, especially if someone you know already has it.” Money and material goods are external; happiness is internal.
A belief in working for passion more than money helps parents keep kids off this treadmill. The more you can help your child discover what he loves to do and then encourage him to do it, the more autotelic your child will become. Autotelic children are able to keep money in perspective. They view money as a tool to use, not a goal to achieve. They take money into consideration when making decisions but they don’t allow their lives to be driven and controlled by money.
Eileen and Jon Gallo are the authors of Silver Spoon Kids: How Successful Parents Raise Responsible Children (McGraw-Hill/Contemporary 2001) and The Financially Intelligent Parent: 8 Steps To Raising Successful, Generous, Responsible Children (Penguin USA/New American Library 2005). Their website is www.galloconsulting.com. Portions of this material have been adapted from their books.
