a conversation with Pamela Gerloff
to Joline Godfrey, author of
Raising Financially Fit Kids,
to learn her advice for raising financially fit young people.
Here's what she told us.
Talk to Your Children
Don't be afraid to talk about money with your children.
As adults, we have our own unresolved issues about money,
and so we put off talking to our kids about it. I like to
think of talking to children about money as a vaccination:
If we don't inoculate them against the messages being sent
by the culture, they are prey to whatever society says about
money. If we don't talk to them, there will be a vacuum,
and the world will fill it-because the world, of course,
talking to them.
Start with Values
If you are clear and explicit about your values, you're
less likely to get into the kind of family dramas that arise
when your children's ideas about money conflict with yours.
Let's say your daughter wants you to buy her a pair of expensive
designer jeans and you don't want to send the message that
in order to "be somebody" she has to have name-brand clothes.
Instead of arguing about it, you can discuss the values
that are guiding your decision. When you get into "can I"
or "can't I" power struggles with your children, it's hard
to win, because kids are excellent negotiators. Raising
the conversation to a higher level (e.g., asking, "How does
this choice reflect who we are as a family?") often helps
defuse the power struggle; and it helps young people make
choices based on their values instead of on peer pressure.
Your values may differ from your children's, but if you
don't at least talk about values with your children, then
the world will get there first.
Start early, start early, start early! So many parents say,
"I don't want to burden my children by introducing them
to money too soon." The point is not to burden them; you
want to start talking about money early because learning
about money is like learning a language-easier to acquire
the earlier you begin.
Take Your Time
Teaching children about money is like teaching a language:
it's an iterative process. Children are not going to become
financially fluent in a few days or weeks. If you share
information and teach skills as children grow developmentally,
repeating in increasingly sophisticated ways over time,
the knowledge and skills will become part of them. It's
a lifelong process of learning.
Pay Attention to Developmental Stages
It's important to realize that money struggles with children
are not an indication of failed parenting skills or financial
ineptitude. Conflict that seems money-related often arises
because we forget that, just as children go through developmental
stages in the process of learning motor, communication,
and relationship skills, they go through stages in their
financial development. The apprenticeship stage of financial
development that I talk about simply refers to the years
between 5 and 18, when children are able to acquire many
financial life skills (such as saving, spending wisely,
and philanthropic behavior) in increasingly sophisticated
ways over time.
to keep track of money
to get paid what you are worth
to spend wisely
to talk about money
to live on a budget
to exercise the entrepreneurial spirit
to handle credit
to use money to change the world
on the Ten Money Skills
If you focus on what I call "the ten money skills," raising
financially fit kids becomes fairly straightforward. The
skills themselves don't change over the course of the apprenticeship
years, but the level of understanding of each skill becomes
more sophisticated as the child grows. You can get people
to help you, and divide up the tasks. For example, you can
ask one adult to teach your child how to balance a checkbook,
another to teach him or her how to do an Excel spreadsheet,
and you can focus on developing the habit of giving. This
makes the whole process manageable.
Do It Alone
It's not possible for parents to raise a generation of financially
fit kids alone; we need to involve extended family and others
in the community. At Independent Means, we involve MBA students
in our summer camps and programs because the kids think
the MBA students are so exciting, so fun, so smart. We believe
that those young MBA students have a responsibility to help
raise a financially fit generation, just as parents do.
a Team of Money Mentors
We also coach families to set up money mentoring teams for
children. By building a network of mentors, you can amplify
your voice. I work with one family who, once a year, places
in a bowl the names of all of the cousins in the youngest
generation. The adults choose names until every child has
at least one adult mentor who agrees to spend time engaged
with that child during the year. The mentor's job is to
come up with resources to help extend that child's financial
fluency. It doesn't have to be a deep bond or a promise
to do something specific. It just has to be something that
will help the child in some way.
one mentor, it might mean taking the child to open a savings
account at a bank; for another, sending an email once a
month with information related to developing financial or
philanthropic skills. The idea is to send the message that
you take the subject and the child seriously and you expect
them to develop these skills as a normal part of growing
up-like learning the alphabet and brushing teeth.
Children for a Global Economy
Appropriate Money Skills to Master
Counts coins and bills . Understands the value and
purpose of money . Learns to differentiate between
wants and needs . Begins to develop a sense of ethics
Can make change . Shows initiating behavior and entrepreneurial
spirit . Shows awareness of cost of things . Shows
awareness of earned money . Can balance checkbook
and keep up with savings account
Can shop comparatively . Understands time-money relationship
. Begins to earn money; initiates small ventures .
Commits to saving goals . Has basic understanding
of investment . Connects money and the future . Can
read bank statement . Understands interest and dividends
Actively saves, spends, invests . Connects goals and
saving . Experiences responsibility for others and
self . Able to talk about money and plan future .
Understands money as power . Can read a paycheck,
do simple tax forms . Shows developing capacity for
chart shows Joline Godfrey's stages of financial development
during "the apprenticeship years," ages 5-18. Children
tend to move through the stages in sequence, although
they may begin a stage at any age. If your child is
16 and has not acquired the skills from an earlier
stage, you can help him/her do activities appropriate
to an earlier stage and move along from there. It's
never too late-even for adults-to become financially
For a more expanded version of this chart, please
see "The Life/Money Map" from
by Joline Godfrey (Ten Speed Press, 2003),
p. 19. The Apprenticeship Years (ages 5-18)
To effectively prepare young people for a global economy,
we can help them develop their entrepreneurial spirit and
acquire international awareness. Children who grow up feeling
that it is "normal" to start a business, learn about currencies,
speak other languages, and think internationally will be better
prepared for the complexities of their economy than children
sheltered from these issues.
If you don't feel as financially fit as you would like your
children to become, take heart. You can learn right along
with them. You can, for example:
your kids in the apprenticeship process. You can begin
developing the Ten Money Skills whether you are 5 or 50.
clear about your own financial values. Write them down.
a money-mentoring team for your own learning process.
I consider grace to be one of the money skills we all need
to learn. By that I mean graciousness and gratitude. Birthdays,
holidays, and other events where children are given presents
or money often become times when young people "collect loot"
instead of using the occasion to acknowledge and celebrate
their life. When parents wake up one day and find they have
mad little consumers, I think it's often because families
forget to teach their children how to be gracious; they
forget to teach gratitude. When Grandma or Aunt Susan send
a gift, you need to teach your children that it's important
to acknowledge that what they have done for them is special.
This acknowledgement should be given whatever the income
level or net worth of your family or theirs. It doesn't
matter what families can afford; it matters how they behave.
Communicating that thanking people for gifts shows love
and caring is one of the ways you bring values into financial
that it's More Than Money
Raising financially fit kids is not just about money. It's
about launching great kids. Financial education is a great
tool for developing the skills of independence, good judgment,
and responsible habits. It's a tool for helping the next
generation become contributing members of both family and
community. That, I have learned, is what kids want for themselves
-and what parents want, too.
Godfrey originated the concept of financial apprenticeship
as a distinct stage of life [see sidebar, p. 17], giving
families new tools for raising children in an affluent society.
She is the CEO of Independent Means, which offers financial
education programs and consulting services for families
and the companies that serve them. The author of four books,
Raising Financially Fit Kids
Press, 2003), Ms. Godfrey has been recognized in features
The Today Show, Oprah, Fortune, Business Week, The
New York Times, and Working Mother
magazine. She is a
popular speaker and the subject of a Harvard Business School
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