- From a child's perspective,
you know, everybody's bigger,
the world is scary, they're not sure how to navigate.
- The brain is taking in information;
is making narratives from an early age.
- They are looking to the people around them
to show them how to interact with money.
- But children don't directly interact with money.
So parents don't need to worry
until much later in their lives, right?
- At the age of three,
this is when we first start putting together
the equation of money and value.
- What are the parts of my money story
that I think are valuable to pass on to my kids?
What were the messages that were sent
by your mother, your father, your grandparents,
your aunts, your uncles, you know, significant caregivers—
and how do you think it affects
your financial communication today?
- The biggest thing that parents can do
to help their children make better financial decisions
in the future, is talking to them
about their personal financial decisions
now in the present.
- How can we make sure our children
learn healthy attitudes around money?
And how can we confront and correct
the deficits in our own upbringing?
This is “Your Brain on Money.”
So Dr. Kable, when we're growing up,
how does our brain take in money behaviors?
- We're born at a stage where the brain
isn't fully developed yet—
and a lot of the final development of the brain
happens outside in the world, you know,
compared to other species.
- And so the brain is taking in information,
and is putting it into categories,
is making associations,
is making narratives from an early age.
- And we start to develop these thoughts
that are called ‘money scripts.’
And so, just like an actor is given a script,
and told in a scene how to act,
when certain things happen around money,
our brain gives us a certain thought,
and then we know the script and how we're going to act.
- Our early experiences in our family system
and directly around money, have a profound impact
on our beliefs around money,
and our beliefs around money
predict our financial outcomes.
If you grow up poor, money is something that's scary,
not having money is scary.
The problem is that as you grow older
maybe you do have money,
but you still have that fear,
you still have that anxiety
because you can't shake that belief:
‘There'll never be enough money.’
- On the other side, folks who might be
really affluent and privileged,
they might think money can solve every problem,
but not build up mental toughness
or withstand things
that sometimes money can't solve.
- And so, children are being constantly exposed
to the attitudes, the mindsets, and the behaviors
of their parents and other loved ones around them—
and their relationship around money.
- If all of this is happening at an early age,
what are the real-world effects later in adulthood?
Kathleen and Brad were kind enough
to share their own stories growing up.
- My mother gave me some money to go buy milk—
it was the good ol’ days when you could go buy milk
when you were a kid unsupervised—
and so I ran off with my friend, we got the milk,
and I can remember there was a nickel change.
And when I got home, I gave my mother the milk,
but I did not give her the nickel.
And, of course, I got in trouble.
What I walked away with was
my love of money is shameful.
That there's something wrong
with my desire to hang onto this nickel, that is not okay.
And so as an adult, what is interesting
is I've always been good at managing the money,
making money, but my love of money—
my desire as an entrepreneur to be profitable—
actually, I had to work through some of that shame
and that discomfort,
I think, because I was sent the message that,
“It's not okay, Kathleen,
that you love money so much
that you wanna keep it.”
- So, I think I associated not having money
with pain and anxiety and family strife.
My mom likes to say,
"We were middle class except lower."
And I'm like, "Yeah, mom, they got words for that."
In my understanding, my own financial psychology,
I went home and I interviewed my mother.
I didn't understand why she was so afraid to invest.
And then she told me this story about my grandfather
which all of a sudden made
my crazy relationship with money
make perfect sense.
My grandfather went to the bank one day
and his money was gone.
It was the Great Depression.
The banks closed.
He never put a dollar in the bank the rest of his life.
He died in his nineties,
keeping his money in a lockbox.
So, understanding that family pattern,
it really gave me compassion for my grandfather
and my mother because of course
my mom's anxious about money—
she's too anxious to invest.
She was raised by a guy
who wouldn't even put money in the bank.
So we have these conclusions we walk away with
around money:
“Rich people are greedy or money corrupts.
Or you can never have enough money.
Or there's virtue in having less money.”
These are all beliefs that we've studied
that get inherited
and emerge from our experiences around money.
- So what can we do to help our children
learn better money habits,
and perhaps even reconcile
what was passed down to us?
- The first is the earlier you start, the better off.
So start early, and talk about money often.
- Let your child digest what it is
that you're talking about about money.
Be sure that you don't push all the details
of your financial experience on them.
- And so the collection of all these money messages
that we receive as we are growing up
is called your ‘money story.’
Pick those lessons that you want to pass down
to the next generation, like passing on a legacy.
- In modern society, it's gotten tougher,
it's become digits on a screen.
And the more abstract it gets,
the more vulnerable we are
to making mistakes around it.
So make it visual, make it concrete.
- So for a five-year-old, it might be,
“This is a quarter,
this is a dime, you know, this is a dollar.”
And then, you know, showing them how to make change.
And as someone progresses,
then you start to increase those lessons
in terms of, you know, somebody gets their first job,
how do you negotiate a salary?
How do you read a paycheck?
So it's these educational moments
that happen over time.
- And you might be able to say like, “Sometimes, you know,
this is just a really tough time
and we're gonna talk about it.
Maybe we're gonna journal about it.
Maybe we're gonna take a walk.
We're gonna do other things to help us feel better.”
And that gives your child or children
multiple resources
of how they can deal with themselves,
their emotions, and their money.
- If you think that you are very financially well-off
and so your children are fine, they don't need to hear
or you don't need to talk about money—
take a step back
and think about your parents,
and your parents' parents,
and your parents' parents' parents—
so that you can be clear
that you're only benefiting your child
by having these money conversations
and experiences with them.
- And the more you do it,
the more you'll see these opportunities arise—
and I think those natural financial conversations
and those teachable moments are great ways
to be able to express your family values,
to teach your kids about money,
and to do so in a way that is a little bit more palatable.