“We can’t afford it.”
That’s the phrase I remember hearing my mom say over and over as we grew up.
My father was a bit more relaxed when it came to money. He wasn’t a big spender, but he made it seem like money wasn’t a big deal. That it was generally there when we needed it and not a cause for stress.
Listening to my parents impacted how I think about money. And their differences came from differences in their own upbringings.
All the things our parents say – and don’t say – about money impact how we manage our finances as adults. Psychologists call them “money scripts” and different scripts are associated with different levels of long-term financial success.
But you can change your script.
Let’s discover our own money scripts, why they matter, and how you can pass on the right mantras to your children.
My Parents’ Financial Upbringings
When it came to money, my parents had very different mental models.
My mom grew up with a single mother who was struggling to raise four daughters. Her father left right after she was born and her mom was doing everything she could to put herself through school to become a teacher.
My mom and her sisters were in and out of foster care while my grandmother tried to make a better life for all of them.
They didn’t have anything extra.
Grandma didn’t waste food and she bought only the essentials, making things work as best she could. As the youngest of four girls, my mom never got new clothes. She didn’t get to participate in after-school sports. They were just too expensive. So, she had to create her own fun. And she did.
I’ve never heard my mother complain about her childhood. She has a very positive outlook on life and she looks back on her past with fondness. However, her view on money was shaped by her childhood and the messages that she heard as a girl.
”There is no money for that,” and “we can’t afford it,” were well-used phrases.
She came from a home where the money mantra was one of scarcity. There was simply never enough to go around. Money was to be spent wisely, on the only essentials.
But for my dad, things were different.
My dad grew up in a household with four boys. His father was a flight engineer and his mom was a homemaker. They were not wealthy but they were comfortable.
When my grandfather died suddenly in a plane crash at 41-years-old, my grandmother received his air force pension which allowed her to take care of the family. There wasn’t a lot of money for extras but they were comfortable. My father and his brothers were able to play sports, go on family road trips and purchase everything they needed.
For my father, money was generally there when you needed it. There wasn’t enough for frivolous spending but it also wasn’t something to stress over. Money wasn’t regularly talked about because it didn’t need to be.
In his house, the money script was one of vigilance.
These differences in script impacted how my parents handled money as adults. And how they talked to me and my siblings about money.
Understanding Money Scripts and Their Impact
My outlook on money and all things personal finance have been shaped by the messages that my parents shared and the money mantras they repeated. Similarly, they both inherited their feelings about money from their parents… You see how the cycle continues.
As a mother, I am now keenly aware of the impact of my words.
Even when you think a child is not listening, they are. Even when you think they aren’t paying attention, they seem to pick up on all of the little details. On your mood, your stress, and your phrases.
Just as most parents refrain from cursing in front of their children so their toddlers don’t go off to daycare spouting a new “four-letter friend getter” it’s important to pay attention to the money mantras we are spreading.
Financial Socialization Starts at Home
Financial socialization is the term used by psychologists to describe how children develop their financial beliefs and behaviors that will ultimately affect their financial views and decisions in adulthood.
When it comes to young children, the family unit is recognized as the primary source for learning about finances. And it starts early. So, you know, NO PRESSURE, mama!
When you consistently reinforce a message about money – “We can’t afford it.” – “Money is the root of all evil.” – “Spend it if you’ve got it.” – Those messages become rooted in our children’s minds.
But financial socialization doesn’t end with what parents say. Otherwise, all siblings would handle money in the same way.
Instead, children enter school, make friends, and see others handle money. (At least on a surface level.) And they interpret what they see versus their benchmark of “normal” – what they’ve learned at home.
Natural spenders may rebel against messages that money is always tight when they see friends getting things they want, making every dollar burn a hole in their pocket. Natural savers may become fearful and develop problems spending money on anything in case disaster strikes.
Luckily, some mantras result in healthier relationships with money than others. And you can control which you use.
What Are Money Scripts?
Money mantras, or “money scripts,” as they are referred to in financial psychology research, are often found to be at the root of people’s money troubles.
The term “money scripts” was coined by financial psychologists Brad and Ted Klontz. Money scripts are the core beliefs we hold about money. They shape our thoughts and actions when it comes to money management, stress, and confidence.
Money scripts have four common traits. They are…
- Developed in childhood
- Passed from generation to generation
- Drive adult financial behaviors
And while there are many varieties of exact money mantras, they typically fall into four categories of money scripts:
- Money Avoidance: “Money is the root of all evil”
- Money Worship: “If only I had more money I would be happier, better looking, ______ (you fill in the blank).”
- Money Status: “My net worth is the same as my self-worth.”
- Money Vigilance: “I work very hard for my money and I want to save it for the future.”
It’s probably not hard to see that the first three money scripts could cause some issues. So, the goal is to promote money vigilance in a healthy way.
Developing the Right Money Script
People who adhere to the fourth script, money vigilance, are usually better off financially. These folks believe in frugality, hard work, and saving for the future. They are also less likely to spend compulsively or ignore their finances.
As a parent, this is the money script that you want to reinforce to promote healthy financial attitudes and behaviors in your children.
Alternatively, research shows that money avoidance, worship, or status scripts result in…
- Lower levels of net worth
- Lower income
- Higher amount of revolving credit
- Compulsive buying
My parents succeeded in teaching my siblings and me a script of money vigilance. Together they taught me the value of money and passed along the importance of creating a budget and saving for the future.
But separately, the lessons were somewhat different.
My mother was consistent in her money mantra that “we couldn’t afford” the finer things. My father, on the other hand, was more likely to splurge on nice dinners or fun family trips. He was never reckless in his spending but one of his money mantras was “you aren’t taking it to the grave so you might as well have a bit of fun now.”
That balance was an important lesson for my siblings.
You see, there is a danger with the money vigilance script if you take it too far.
If you are constantly worried about saving every cent for a rainy day and fail to spend any of that hard earned money on things that could bring a great sense of security (e.g. safe car) or joy (e.g. going on a family vacation), then you can instill feelings of anxiety about money in your children.
Talking to Kids About Money To Encourage Balanced Money Vigilance
1 – Identify Your Money Script
Before you can instill a positive money script in your children you need to identify the money mantras you are currently sharing and evaluate whether a change needs to be made.
Start to pay attention to the way you think and talk about money. Even better, start a money journal and write down the way you feel.
Do you tell yourself that more money will make you happier (money worshipper)? Or do you feel resentment towards those that have a lot of money (money avoidance)?
Once you improve your money mantras, it becomes easier to change your behaviors.
2 – Promote Financial Literacy.
Even if you have a terrible track record with money, you don’t need to pass this onto your children. Make it your mission to educate your kids about personal finance.
Remember that you don’t personally need to have all of the answers.
Take your kids to the library and check out some books on the basics of personal finance. Or, introduce them to some of the amazing personal finance blogs that are freely available on the web.
And while you are helping your children become financially savvy be sure to devote some time to improving your own financial literacy.
3 – Encourage Development of Math Skills
Math is part of our everyday life and is an important skill. But it goes beyond rattling off multiplication tables.
Studies have linked childhood development of math and problem-solving skills to the development of future financial management skills in young adults.
In addition, mathematical ability has been associated with increased patience. Since those who are able to be patient and delay gratification are more likely to save for the future and feel more in control of their financial situation, this is a crucial skill.
Again, it’s okay if you aren’t a mathematician. In fact, it’s okay if you don’t remember how to do long division. There are resources available. Check to see if your children’s school offer extra after-hours help or, if financially possible, seek out some additional tutoring.
Keep the dirty details to yourself. Don’t get me wrong, the topic of money should not be a secret. In fact, you should be having regular, educational conversations about money with your kids.
If money is really tight and you have to make some changes as a family then you should sit down and have a conversation. However, you want to be careful that you don’t add too much stress or burden on your children. If you are struggling financially use this as an opportunity to educate your children on money and some of the difficulties that come with it.
Instead of dumping your worst-case-scenario fears on your kids, telling them, “Dad lost his job, we have no money for food and are worried about losing the house” consider a calmer alternative.
“We are going through some tough financial times so we are going to have to make a few changes around here. Vacation won’t be possible this year and we’ll have to cut back on some things. But Dad and I will figure it out and it will be alright.”
5 – Get Your Kids Involved
Involve your kids in day-to-day money tasks and conversations. Explain when you’re doing price comparison in the grocery store or share how you negotiated for a raise.
When things aren’t as rosy and your kids are aware that you are experiencing tough financial times give them small tasks that they can do. Kids want to help and it will make them feel less out of control. For example, “Why don’t you guys help mom and dad come up with some fun and free activities that we can do as a family this weekend.”
6 – No Money Arguments In Front of the Kids
Kids are sponges. If you need to talk to your partner about money in front of your children do it in a calm and respectful manner. Better yet, save it for when your kids are in bed or out of earshot.
Kids don’t need to be involved in your money spats and it will impact how they talk to their future partners about money.
Don’t Be Too Hard On Yourself, You’re On The Right Track
Here you are, on a site about personal finance. This means you are already taking a step in the right direction. So, don’t stress too much.
Stay aware of the language you use about money. Keep taking small steps to improve your own financial knowledge. And your care and efforts will trickle down into better money mantras for your kids!
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We want to hear from you. What money script do you identify with? How did your parents talk about money and personal finance? Do you think it had an impact on you?