Very recently, one of our viewers wrote in saying, "How do I teach my child
financial responsibility?" Let's see if we can take that on in today's video. Like
with almost any other topic, I think we have to acknowledge and take a look
first at our own attitudes. -About finances. You know financial topics bring
up a lot of emotions. Have you noticed that? There's always like... -Oh, yeah. A lot
of energy attached to money and whether I have enough or how I'm going to get
some. -Or even having other people know that you're thinking about it or
what you're going to do with it, right? -Right. So, let's start with an
acknowledgement of our own attitudes and programming about money. If you're coming
from a place where you have struggled with money where you think that money
will solve your problems, where you feel that you don't have enough, that's going
to impact how you teach your children. We probably just opened a big old can of
worms because there are so many emotionally charged issues around money.
And everybody is programmed. Whatever your programming, everybody you kind of
know about money what your parents taught you or didn't teach you
but either way programmed you for. -And we're not asking you to change that.
We're mostly just inviting you to see it. -Yeah. To examine it
occasionally. -Take a look at what your attitudes are and realize that it's
going to affect how you interact with your kids. Now, can you change your own
attitudes about money? Sure you can. That's not the purpose of this video.
Just realize that it's going to impact how you work with your kids. Definitions
are often important as we're trying to teach a particular topic. And the first
one is an obvious one. What is money? -But that's so scary. How do you answer that
question? Right? -Sometimes we make the error in thinking that money is value.
Money isn't value. Money follows value. Money is a result of creating value. So,
the value happens and then the money flows after that. For example, if we have
someone come over here to do something at our house. Our air conditioning man
came over and made this house much cooler in the summer. -Much more. -Grateful
for that, aren't we? He created value for us. Guess what? We gave him some? -Money.
-Yeah, why? -Because it had creative value for us. You know I think where you define
money I think one of the important things to talk to our kids about is the
fact that money in and of itself doesn't have that much value. -Right. -Doesn't
really have any. The only thing money has value for is what you can exchange it
for something that you actually value. So, we exchange some of our money for
something we really value which is having a cool home in the summer. -And I
doubt he hung onto that money and just went to bed holding it going this is the
best thing. -This is what I always wanted. -I don't know. An oil change in some
food and I don't know, what else? You know, whatever is important to him that's what
he exchanged it for. -And this is reflected in your attitudes in your
language because if you're constantly talking about how you want money or you
need money, no you don't. You want or need what the money can buy for you what you
can trade it for. -Right. -And that changes a whole another story because if you're
talking with your kids about, "Boy, I would really like to go on a vacation. And now
I'm gonna try to figure out how to earn the money to pay for that vacation." It's
kind of changed the value of the money. It's now the value was put on the
vacation which is really what you value. -That's what you want. And how do you get
the money? Well, you got to figure out how to create enough value for other people
that they'll trade their money for that value that you created for them. -Right. -So
money is not value. Money follows value. It think of it as a receipt. That's a
handy way for me to think about it. You create value, you get a receipt for that.
Okay? Or if you receive value, you have to give somebody a receipt for that value.
-That's the money. -Okay. One of the big key things that I've tried really hard to
work with our kids is learning a budget. And boy... Do you know I have 4 kids. And
I've gotten a lot of different responses to that
his budget. You know, because most of my kids who I've had some kids that are
like, "I don't want to be restricted. I don't want to be told I can't do
anything." -Budget. That's a six letter word. We can't say that, right? Well what is
budget? Let's define budget. -Let's do. -But first, by what it's not. -Right. -Budget is
not restriction. -Right. -That's what has people avoiding it. And teenagers
especially. They don't want to be restricted, right? -That's their
development has to kick against being restrictive so budgeting is a really
hard thing for them to wrap their head around unless we define it for them so
that they understand it's not restriction. -So, what is it? What if we
were to think of our money as little employees? -Mm-hmm. -Okay?
Every little unit of money is an employee of mine. -Right. -The budget is the
marching orders. -Right, yep. So... -I'm going to tell each one of them what to do.-This one is
going to go pay them for a movie. And this was going to pay for new shoes. And this...
-And I'm going to send these 10 over there to an account that's going to grow for
me to a point where I can use that for investing. So, budget is not restriction.
Budget is marching orders. And who's going to give the orders? -Hopefully me.
Right? I'd rather take control of it. And that's that's where budget is strong.
It's not a restriction. It's a chance for you to take control of it. -You know
what's the darndest thing about these little units of money? Whether they're
dollars or euros or yen or whatever they are, they will march somewhere. -Uh-huh.
-They're going to go somewhere. Have you noticed this about your own money? -U used
to always joke that as soon as we got a certain amount in our savings account
our car must have heard us talk about it cuz I'd break down for that exactly. -And
the point with the whole with the budget. You get to be in charge. Give these
little guys marching orders so that they know where you want them to go. That's
what a budget is. Vicki let's take on one more term. This is one that is often
misunderstood. It's called interest. -Yeah. -My grandfather used to say, "Those who
understand interest earn it. Those who don't, pay it." -Mm-hmm. -And I
think he really lived that way too. He did. He lived that way. So, we really have
to talk about interest early to children/ You know it's not just a magical thing
that happens on on... You know. -Do you understand interest? When you put
your money in an account and it earns interest, where did that come from? When
you put your money into that account, whether it's an investment account, some
kind of a mutual fund or a stock or even a savings account at a bank., does
your money just sit there and magically grow? No. Your money leaves and goes
marching. -The bankers sent it on a marching order and then they give you
some interest for letting them use your little soldiers for a while. Because
they're all going out to do what? To create value for other people. That's the
magic of interest. -Yeah. The money gets put to work. So, my dad for example. He
likes to turn items out of wood. He's got a lathe, he makes pins, he makes magic
wands he makes kaleidoscopes. And these are really cool little items. Well what
if he's sitting there with nothing to do? And I approach when I say. "Hey, dad. Why
don't you make some of those cool things?" And that's like, "Well, I would but I don't
have wood to turn I don't have the materials to go make that stuff." Well,
what if I give you 20 bucks, can you go get the materials? -And he's like, "Yeah,
sure." So, I give him the 20 bucks, he goes any bites wood and materials and he gets
everything together and then he applies his skill and his knowledge and his
human life value to that material and he transforms it into something that
someone else would value. They'd pay him money in exchange for that now he has
more than 20 dollars. Magically? No. He created value for people. -Yeah. -Now, can he
turn around and give me $20 back plus an extra couple of dollars as interest for
letting him use your money. It's not magic if that money is not sitting
somewhere it's being put to use to create
value for other people. No,w this is important to understand because we all
get into some kind of magical thinking about money. And our kids will have
magical ideas about money. Especially if we're demonstrating that to them in our
own attitudes and behaviors. So, we're taking the magic out of this. Money
doesn't just magically appear and stop saying, "Oh, I don't have the money or I
wish I had the money." It's not wishful magical stuff. It's about creating value.
How can we create more value for more people. That's the economic answer. So,
that takes the magical thinking out of it and helps your kids to have a solid
financial understanding. As we've defined these terms for our kids and and give
them a better understanding of what money is where it comes from.
Take the magical thinking out of it. We now want to give them opportunities to
actually practice this. -And the reasons to do it. I think a really great term to
teach your kids and to model is instead of them saying, "Mom can I go to the
movies?" You might say, "Mom, what would it take for me to go to the movies?" And so
that might bring up a conversation where it's like, "Okay. Well... if you will..." Because
remember that money isn't the value. There's a lot of things for values. So
you might tell them something they could earn the money or you might say, "You know,
if you will help me get the rest of the lawn mowed, I'll Drive you down there." So,
what will it take? You know, how can I get to the point where I can do this? So, that
just kind of takes the the power out of the money portion of it. -Right. And it
puts the responsibility back on their shoulders. So, I'm picturing this
interaction. And our kids learned this as we started to implement some of these
things with them. I remember our son coming to us and say, "Mom, dad what would
it take for me to get..." And something that he wanted, right?
that is a beautiful question. -Right. -And as a parent, it's fun to hear that.
Because they're not asking for something they're like what would it take? You can
respond... Let's go back to your movie example. What would it take to go
to the movies? Well sweetie, the movies cost five dollars. Have you thought about
how you could handle that? -Right. -And they're like...
Ah! Now, if you've instilled a culture around this where they understand value
exchange and they know that it's not magical. It just doesn't magically appear
in mom's hand anytime that I want money. Mom got it from somewhere. -Right. -So how
have you thought that you might handle that? Well, I don't have five dollars. Hmm,
I wonder what you could do to obtain five dollars. -Right. So, just get them
thinking and taking some ownership and responsibility. You know, that's part of
the thing with parenting is you don't want to provide everything. -Good point.
Why would they have any motivation to go obtain the five dollars if you're
always providing. Movies okay let's go and you just swipe. Now, a little
disclaimer here because you have to provide certain things to your kids.
-Yeah. By law morally, ethically because you're a good parent. But there's only
5. -Right. 5 freebies and they are in this order: Love because your job is what
no matter? What even if I know we harp on that all the time on this channel love
them. That is free it's not conditional on anything
the next thing, air. I know you don't always think about that because you
don't provide it. But you have no business depriving them of it. -So, you're
providing it. -So, love air third, water. Fourth? -Food. -And and it doesn't mean
preferred food. Necessarily. You got to keep the bellybutton away from the
backbone, right?Aand then fifth shelter which in most
cultures and societies includes appropriate clothing. Now, those are the
freebies tTey don't have to buy their own now everything else what if you were
to give them some opportunities to practice what you've taught them about
money so that they can manage some of their own funds and obtain the things
that they want outside of the freebies list on their own money. -Yeah. I think the
most important thing is just start talking about money. just start talking
about finances. Money, budget, interest. All of these things. We
love being part of your positive parenting team. So, glad that you're here
and that you share this channel with other conscious positive parents like
you. Encourage them also to join us at the parenting power up. parentingpower
up.com. We'll see you there.
I wish