Five destructive money messages you might be giving your kids - and how to stop

When using cards to pay for things, explain to your kids that it's using money you've already saved.
When using cards to pay for things, explain to your kids that it's using money you've already saved. Photo: James Davies

I have so many "parent fails". Just today it involved unmatched-sized school socks, nearly giving my kids raw fish sandwiches (I thought my husband had frozen already-cooked chicken) and a missing Ventolin for my asthmatic son.

But, food poisoning and breathing aside, most day-to-day fails are insignificant in the scheme of things. We all know what's important is teaching our kids to be good human beings, giving them an education that will set them up for a career they love (and will hopefully pay) ... and equipping them with the knowledge to - eventually - move out.

The thing is, at least in the last case, we can undermine our best intentions and instead pass on destructive money messages.

Illustration: John Shakespeare.
Illustration: John Shakespeare. 

Let me be clear: This is usually through no fault of our own but due to the new world in which we're raising our families.

Destructive message 1: Not easy come, but easy go  

I don't think there is a parent who hasn't uttered the phrase "We work hard for our money", usually in frustration at food rejection. Or moaned just a little about having to do this work. Which conveys neatly the life lesson that money is earned not bestowed (but are you promoting a work ethic that's going to see your child excited about it later?).

What your kids may not appreciate is the spending side - how you don't spend willy-nilly but, after the bills are paid, target sweet rewards for your family (right?). Tell them often - both to get them excited about the coming trips/treats and to demonstrate the need to wait. Chocolate is also a great proxy for spending for young children ... see how they go delaying their own gratification and saving some. 

Destructive message 2: Money is endless and/or debt is OK  

All adults know full well money runs out. Perhaps you were lucky enough growing up to see the physical form doled out around the table until there was none left and the countdown to the next pay commenced. Our kids don't have that perfect illustration that money is finite ... instead they rarely see it and many have their own quasi-credit cards in the form of student IDs that magically get them anything at the tuckshop.

Each time you blip a card at a counter, explain you're using real money that you've saved first (when your children are young, even if you haven't!). And occasionally throw in that you can't afford something until next month ... otherwise it would cost more than the actual price (that's interest), which is just silly.

I'm sure you never say: "We can't afford it, but let's do it anyway."


Destructive Message 3: Finances don't need managing  

When I was little, it felt like we went to the bank every afternoon. For hours. Mum would sit there with a cheque book doing mysterious things ... but I knew she was paying bills and saving (sometimes as little as $5 a pay).

Nowadays, parents do this with a few quick clicks from the couch after the kids go to bed - it saves getting hassled to use the iPad! Instead get them involved by showing what you're doing, all the better if your net banking has some nice calculators and/or graphics. And at age eight, consider opening their own account (you'll have full control until maybe 10), which will usually carry kid-tastic tools and even games. You want to encourage engagement (and not anxiety).

Destructive Message 4: Waste is OK 

Very tricky, this one, when we live in such a disposable society. And party bags with endless plastic trinkets have to be the ultimate example. But today we have just so many toys and clothes ... and they all represent money. Be conscious of it in your family. Regularly get your young ones to pass to friends or give to charity what they no longer need - and watch them beam as they discover benevolence.  

The earlier children start saving for something special the better.
The earlier children start saving for something special the better.  

Maybe it's our "starving children in Africa" indoctrination, but I believe throwing out food from the fridge sends an especially bad message. Plan well and realise just about everything freezes (just beware raw fish!).

Destructive Message 5: Financial security is a pipedream

You may have lamented your insurmountable mortgage and worried aloud about retirement but, again, this one's not your fault. Perhaps the media - of which I am apart - is to blame. But I'm distressed at the number of high school students I meet who are despondent about being able to get independently solvent and secure. Many have given up on ever buying a home. These are 14, 15 and 16-year-olds who are already beaten down by "life stuff".

Combat this attitude when your children are young. Get them saving for what shiny/furry/sparkly thing they want from the moment they earn their first dollar of pocket money - which should be as soon as they know numbers - and 10 per cent for something long term (but still fun) like their first car. Your new mantra: small amounts buy BIG things ... it's easy when you start early.

Kids get less exposure to seeing their parents do the mechanics of banking now that it's moved online.
Kids get less exposure to seeing their parents do the mechanics of banking now that it's moved online. Photo: Michael Mucci

Imagine if someone had told you that.

Nicole Pedersen-McKinnon is a financial educator who presents for ASIC's and delivers her Smart Money Start, fun financial literacy incursion, in high schools around Australia. Follow Nicole on Facebook at Nicole Pedersen-McKinnon Money and Twitter @NicolePedMcK.