Money Messages

by Valerie Frankel

Money Messages

What you’re telling your kids and how to communicate the values that matter most
My daughter Maggie, 10, and I were walking down the sidewalk. We passed a boutique, and I said, “That’s a cute store.”

She said, “You’re just saying that because the word ‘sale’ is in the window.”

A week later. My daughter Lucy, 7, and I were buying a newspaper at a sidewalk kiosk. The vendor gave me the change, and a $5 bill blew out of my hand. I chased it half a block until I trapped it under my foot. When I looked up, I realized I was in the middle of the street. Lucy watched me from the corner. She said, “Is five dollars worth getting hit by a car, Mommy?”

Amazing, isn’t it, how kids start using sarcasm so young? My daughters can be as snarky as media critics when it comes to my, shall we say, frugal tendencies. I laughed at their little jokes but also wondered if my parsimony was somehow influencing them in ways I couldn’t predict or imagine.

That concern was confirmed a couple weeks later, when, encountering one of those low spots in household finances that are occurring more often — and to so many of us — these days, I started grumbling about our expenses and announced that a planned trip to Old Navy was now off. Maggie looked distressed and said, “Do we have enough money for food?”

Then Lucy spoke up: “Are we going to move to a bad neighborhood?”

I reassured them, but marveled at their Grand Canyon-wide leap from a postponed search for cute tops to destitution. And naturally, as a parent, I blamed myself. Not only were my kids keenly attuned to my cues, but they were misunderstanding them. And those misunderstandings might influence them as much as the cues themselves.

It’s hard enough as a parent to do battle with our consumer culture, with shopping as leisure activity, sophisticated and highly targeted advertising, and product lines disguised as TV shows. We try to act as a filter, but we can’t really control it. But I saw that I was also shaping my girls’ ideas about money — and that’s something I do have control over.

Unwittingly or not, we set the tone for our children’s relationship with money, and the way we spend and talk about it says a lot about our beliefs. “A parent’s attitude about finances will affect the entire family and can have a big influence on her child’s money values,” says Sharon Danes, Ph.D., economist and professor in the department of family social science at the University of Minnesota.

This doesn’t mean that there’s a straight-line relationship between our money attitudes and our kids’ financial futures. “The child of a gambler might become a risk taker in the stock market or decide he won’t wager a penny and keep his money inside a mattress,” says Rick Kahler, a financial planner in Rapid City, South Dakota, and coauthor of Conscious Finance. “Two kids, raised in the same house, observing the same parents, might turn out completely different.”

But just because you can’t control the future (or the economy!) doesn’t mean you can’t control the money messages you send in the present. Here, four common ones you might be depositing in your child’s mental bank account — and how to counter them.

Here’s a clip of Parenting‘s Lisa Bain discussing “Money Messages” on The Today Show.

Message #1: “We can’t afford that!”

Sound familiar?

The emotional cost: Regardless of your intent, claiming poverty when you’re not impoverished might send your child the message that you think he’s greedy. And what do statements like that really mean, anyway? That you can’t afford it today? Can’t afford it ever? Can afford it, but it seems like a waste of money?

Checks and balances: To temper genuine financial limits with a healthy enjoyment of money, experts often recommend a monthly plan. “Gather the family together and take turns talking about things you’d like,” says Danes. “Make a list, and explain which items are unrealistic. Then plan some purchases on a rotating basis. One week (or one month), a child gets something. The following week or month, it’s Mom’s or Dad’s turn. The consistent message is that you have to take turns, that everyone deserves treats, and that saving and waiting don’t negate the pleasure of sometimes getting to buy the thing you want or need.”

Here’s how it broke down for us: First, my husband, Steve, and I decided we’d put aside $50 for a rotating monthly indulgence, and then we called in the troops. Maggie wanted a new pair of winter boots. Lucy wanted sneakers with wheels. I longed for a new comforter, and Steve wanted to replace a stolen iPod. Since it was coming on winter, we decided the boots and comforter could be the first two items purchased. Lucy agreed to wait until spring for her Heelys, and Steve knew he’d have to save up a few turns for his iPod. Upon hearing that, Maggie offered to let Steve use her iPod until then. Everyone left the table satisfied, and Maggie showed encouraging generosity.

Kids of any age can sit and listen to the conversation. Sure, they might be too young to understand the concept (you can almost hear a 3-year-old’s list: pony, castle, rainbow), but they will get it eventually, says Danes. “And it’s never too early to start teaching your children about money and responsibility.”

Message #2: “Whatever you want, honey”

“My parents completely indulged me,” says S.K. (who wishes to remain anonymous), mom of 7- and 4-year-old daughters in Princeton, New Jersey. “We’d go to a store and they’d buy everything. And now I find myself buying things for my daughters I know they don’t need.”

The emotional cost: Kids can become, in a word, spoiled. “We went shopping for a birthday present for a classmate,” says S.K., “and walked out with new toys for my girls, too. This happens all the time. The only problem is that now when I try to say no, the girls won’t take no for an answer. I’ve had some really embarrassing moments at Target. And I usually cave.”

“If you teach a child that the money will always be there or that price is no object, it prevents him from developing a good work ethic and can set him up for a lifetime of thinking the world owes him a living,” says Kahler.

Checks and balances: “Some parents think that if they don’t spend a lot on toys and gifts, it means they don’t love their children,” says Kahler. “If you change that thinking, that spending means love, you can change the behavior.” All well and good, but that nice realization may not play with your toy-lusting kid. “The easiest and best strategy is to avoid temptation,” he suggests. “If you can’t stay away from stores, make it clear to your children beforehand that you’re only going to buy the items on your list.” Reconditioning an entitled child takes some time and might mean dealing with a few tantrums. “But kids adapt faster than parents think they will,” says Kahler.

Message #3: “Mommy has to work to buy you all the things you love”

“I’m the sole breadwinner in our family, and I need to work a lot to keep up,” says Judith Newman, mom of 5-year-old twin boys in New York City. “I’m constantly telling my sons that I can’t play with them now, I have to work to buy them the toys they like so much. Last week, Henry cried outside my door and said, ‘I don’t want any more toys.’ It just about broke my heart. But then I had to get back to my job. The sentiment was short-lived for him, too. A few days later he came up to me and said, ‘Mom, I think I need more toys. Are you working today?'”

The emotional cost: Whether it’s devotion to work or the prod of financial pressure that’s turning you into a workaholic, it doesn’t matter to a kid. Even though you’re trying to explain the reason in a way your child can understand, she only sees your unavailability and feels abandoned.

Checks and balances: Instead of ignoring your child’s perspective, address it right away. Danes suggests telling your child, “It sounds like we need more time together; let’s plan a date right now.” And use that time — whether it’s that afternoon or the following weekend — to be with her, without interruptions from the phone, BlackBerry, or e-mail.

Message #4: “I don’t care how many dolls your friend has. One is enough for you”

My daughter Lucy often comes home from playdates with vivid descriptions of the bounty she finds in her friends’ rooms. A shoebox full of Game Boy cartridges. An army of AmericanGirl dolls. I immediately get defensive and start telling her that one Samantha is all any girl needs. So what if her friend has four? Lucy tells me, “Okay, okay, I hear you,” but I doubt my words penetrate past the image she’s got in her head of a bed crammed with coveted dolls.

The emotional cost: The real problem isn’t the culture of acquisition, it’s my immediate, knee-jerk assumption that my kids are being greedy. “Is it that she wants more AmericanGirl dolls, or is she just reporting what she observed?” asks Danes. Your child, after all, is only starting to learn about relative wealth and plenty. “If you react negatively, she’s likely to see only that Mommy is angry at her, but she won’t understand why,” she says. (And if you buy another pair of shoes the next day, you’ll just look like a hypocrite.)

Checks and balances: Bite your tongue. Don’t get defensive when your daughter comes home talking about her friends’ stuff, says Danes. Before you start a lecture on the perils of materialism, pause for a moment and find out what your child’s really saying. Ask her what she thinks, instead of simply telling her what you think. The last thing you want to do is cut off the flow of conversation. Today, the topic is toys. But tomorrow, next week, ten years from now, it will be more complex.

Talk isn’t cheap. Not when it’s honest and open with our kids. Let that be the ultimate healthy fiscal message for them and ourselves: A parent can teach her children to be more at ease with money matters simply by paying…attention.

Confusing signals

Little ways we baffle our kids about money — and what to do instead:

We covet
We all throw admiring glances at the neighbor’s shiny new car. Instead of hiding your lust, let your child know it’s okay to want stuff. But also let him know that we can’t always buy what we want, and that’s okay, too.

We send nonverbal cues
Mutter about a bill arriving, count up the money in your wallet — there’s nothing wrong with doing this, but they’re subject to your child’s misinterpretation. Be honest about your feelings and tie them to something from your child’s life (“Remember that time your Transformer broke? I feel frustrated, too”).

We use nonsensical expressions
“Money doesn’t grow on trees,” “Easy come, easy go” — they seem harmless enough in context, but they can be scary or meaningless to kids. Try to be more aware of what you’re saying, and explain your words.

Valerie Frankel is the author of 19 books. Her latest, Thin Is the New Happy, a memoir, will be published in September.