Financial Responsibility

A Strength-Based Approach

Money is a source of stress for many adults. It’s often cited as one of the primary causes of divorce, so it’s important to step back and take a look at your own attitude towards money. If it’s a cause of strife and anxiety for you, it’s important to acknowledge and work through those feelings so you can effectively teach your children.

In recent years, the increase in credit card debt and decrease in savings has become a source of instability for many households. Teaching your children financial responsibility can be one step towards reversing this trend. When kids grow up with a clear understanding of how personal finance works, they can avoid falling into debt and learn to save for future goals, like retirement.

Choose an approach to teaching financial skills that encourages confidence and responsibility rather than fear or shame. By providing rules and guidelines -- along with opportunities to make choices and learn from mistakes -- you can help your child understand why it’s so important to avoid spending money “like it grows on trees.”

Keep these points in mind as you develop your strategy for teaching your kids financial responsibility. Methods should:

Enhance Self-Esteem

• Draw upon the strengths and capabilities of each child;
• Empower your child to make sound decisions;
• Increase your child’s confidence in his own ability to make good choices;
• Provide opportunities for success;
• Use disappointing decisions as learning opportunities without shaming or embarrassing your child.

Increase Capability

• Plan to allow your kids to take on more financial responsibility as they grow;
• Support them in developing problem solving skills;
• Increase their capability to become self-disciplined money managers.

Strengthen your relationship with your child

• Money issues generate lots of emotion! Try to stay in touch with your child’s feelings and needs, while providing the right structure for learning. It’s hard to say “no” when your teen craves a new CD or clothing item, but sometimes it’s important to compassionately turn down requests.
  
  
• Enhance the trust you have in one another. Be reliable about keeping the promises you make regarding money, and expect the same from your kids.

Embrace Individuality

• Respect your child’s temperament, including a tendency towards spending or saving, while teaching the skills she needs for success.
  
  
• Base your expectations on your child’s capabilities.

Have a vision of your child at 25

• Envision your child making responsible financial decisions as an adult.
  
  
• Use mistakes as learning opportunities.
  
  
• Think carefully before protecting your kids from the consequences of their financial decisions. Ask yourself, “What am I teaching my child if I provide the money to solve this problem for her?”