If you've ever raided your child's piggy bank when money's been a bit tight, you're not alone. New Australian research released by Financial Planning Association (FPA) shows that 38 per cent of Aussie parents have dipped into their kids' savings for urgent expenses. And we're not always honest with our kids about money either. More than a quarter of mums and dads (29 per cent) reported lying to their children about finances.
The research, released in a report: Share the Dream: Raising the Invisible-Money Generation examined parents of 4 -18 year olds born into a world of primarily online transactions. Along with confessions of borrowing cash from our offspring and telling lies about money, four distinct types of money-parent personalities emerged: Engagers, Troopers, Relaxed and Avoiders. The four types are based on how comfortable parents are talking to their kids about money matters and how often they do so.
Let's take a closer look:
Engagers: If you're an engager you find talking to your kids about money easy - and do so often. You're more likely to be female, have a bigger family and a higher household income. Engagers are more likely to reward kids with money for good behaviour - and they also pay the most pocket money. Kids of Engagers are more likely to make online purchases, buy items using a mobile phone and use a credit card. And they're more curious about things like Afterpay, Cryptocurrency and in-game app purchases.
Troopers: If you talk about money a lot but feel uncertain and awkward doing so, then you're a Trooper. Troopers worry about talking to kids about money out of fear it will make them anxious - but they do it anyway. Teenager kids of Troopers are more likely to have a job and have more experience making online transactions.
Relaxed: Are you comfortable talking about money but don't do it very often? You're most likely to be an older parent and fall into the category of the "Relaxed" money-parent personality. While Relaxed types have the lowest level of financial stress and regret in their homes, there is a downside to being too laid back about fiances. The FPA notes that offspring of the Relaxed may be left to explore money matters alone, due to missing out on opportunities to learn.
Avoiders: If you'd rather talk about anything other than finances, that makes you an Avoider. Avoiders tend to earn less, and give less pocket money. They're more likely to be male, they talk about money infrequently and they have smaller families. Kids of Avoiders are least likely to engage in the world of "invisible-money" via online and phone-based purchases.
"Engagers and Troopers show us the earlier you start talking about money with kids the better," notes FPA CEO, Dante De Gori.
But while you might not be a natural Engager when it comes to finances, there are some lessons you can take from this money-parent personality.
"There is a lot we can learn from Engagers," says Certified Financial Planner Adele Martin, adding that for all money-parent personalities the key is to not make money taboo.
Here's are some ways you can add fiances into conversations with your kids.
- Pocket Money: "The best way to stop making money taboo is through the use of pocket money," Ms Martin says, adding that while some chores should simply be completed because they're part of the household (e.g. packing and unpacking the dishwasher) and shouldn't be motivated by money, other tasks like washing the car can be paid for. "This helps children understand the relationship between work and money and where money comes from," Ms Martin says.
- Getting a part-time job: "Teenage children of "Engager" parents are most likely to have a job and make online purchases for themselves or their family," says Ms Martin. "Depending on your kids' age you could encourage them to get a part time job or to start a side business to earn extra income - eg buy things from garage sales and then sell on facebook marketplace.
- Talk about how kids are spending money: "I'd encourage all parents to have a discussion about the sort of spending or expenses children are expected to budget from their pocket money or part time job," Ms Martin says. "With any income your child receives (gifts, pocket money etc) get them to split between how much they want to spend, save and share.
- Let kids learn from their mistakes: "This might be hard as I know it can be tempting to help your kids out," Ms Martin says. "But let them learn from their money mistakes when they are young. If you bail them out when they are young, they could also come to expect it when they are older."
- Be mindful of your "money story". When you think of the word "money" what comes to mind? If money talk elicits anxiety, (if you're a "Trooper" for example) chances are you have a bad money" story running through their head like "I never have any luck". "These stories generally arise from an event or series of events in their past which then becomes their belief," Ms Martin says. "Once you have a belief then you are constantly looking for things to support it and therefore you could be filtering out opportunities." Ms Martin says t's important for Troopers to be aware of the language they use about money and the impact this could be having. "A classic example - they might find themselves saying "we can't afford it" to their kids," Ms Martin says. "The word "can't" means your brain stops looking for solutions. A better phrase would be 'how can we afford it?'"
To find out which "money parent personality" you are try the quiz available on moneyandlife.com.au/share-the-dream.