How to Raise Kids with Healthy Money Beliefs

At the appropriate age, kids can be taught that, while the total amount of money in the world is virtually limitless, the amount available to them (or to the family) at that moment is limited and has to be allocated based on needs and priorities. How that is done is up to each parent’s beliefs, but the important thing is that it be done.

“Read it to me one more time, Mommy.”

And off we go again, hearing how the damsel in distress was swept off her feet by the charming prince … and lived happily ever after.

Unfortunately, that’s probably one of the most insidious things we can put in our little girls’ heads.  Yet it was put in ours, and it seems harmless enough to pass along.

What our parents didn’t realize (but we do today) is that those long-ago, childhood memories were often left in that less-visited portion of our brains: the subconscious.  And, in many cases, the memories have had long-lasting, sometimes devastating effects on our adult lives.

Money Gremlins and Where They Come From 

From birth to age six, we function almost entirely from our subconscious minds.  That is, we have no real ability to judge what’s going on around us.  Therefore, everything we hear and experience, every interchange with others, absolutely everything lands in our little subconscious minds, like throwing everything into a huge bucket.

Remember that we all have a biological imperative to survive.  So whether we’re functioning from our conscious brains or not, we’re wired to constantly respond to anything that threatens us.  (Conversely, we’re attracted to whatever increases our chances to survive.)

At the same time, as infants just learning how the world functions, we soak up everything our parents, siblings and relatives do.  They are our role models, after all, our only resource.

What we see as memorable incidents could include something as innocent as hearing our parents fighting over money and believing we are somehow the cause…

  • Maybe our cousins have toys our parents can’t afford to buy us, and our parents make disparaging comments about our “rich relatives.”
  • Maybe our fathers are always absent, but bring us expensive gifts to show us they love us.
  • Or maybe our mothers unintentionally plant scarcity thoughts in us.  Say we grab that yummy treat at the market and she says, “I don’t have any money for that.  I barely have enough to put food on the table” …

Whatever the incidents, we each installed millions of these impressions in our infant brains and called them Truth.  (I call them Gremlins because of the mischief I see them causing my clients as adults when it comes to money beliefs.)

We had no tools to decide what was right or wrong.  Instead, we just left each impression there, whether it was rational or not.  Then, as we grew older and acquired the skills of critical thinking, we never bothered to go back and revisit all those old impressions.  Many no longer affect us: they were innocuous or they got disproved as we grew up.  But, like it or not, some of the more damaging Gremlins that were never addressed still seep into the decisions we make today in the form of emotional mischief.

The Power of Knowledge

Now that we know how that works, we have two tremendous opportunities.

First, we can remain vigilant about how our kids might perceive events that, as adults, we consider perfectly harmless.  That might seem like a massive task, but becoming a parent is a massive responsibility.  And today we’re aware of things our parents never even considered.

We know what obstacles we could be creating for our kids’ future well being.  From a little girl who grows up to believe she deserves to find a prince who will take care of her, so she abdicates her power around money … to little boys who become workaholics—putting family relationships at risk—because they can never have enough money.

Second, we can plant healthy impressions in our kids’ brains, from infancy onward.  Instead of telling little girls they don’t need to be good at math, as our mothers did, we can encourage them to involve numbers in many of their activities.  That will keep their math skills active so they won’t shut them down as so typically happens in the early teen years.  The result will be to remove a huge barrier to being empowered around money.

If we do read fairy tales to our daughters, we can alternate them with stories in which little girls are celebrated for taking care of themselves.  (Little boys will benefit as well, as they won’t find themselves expected to go from prince-on-a-white-horse to sole provider forever!)

We can play games with make-believe money, and use that opportunity to introduce the concept of where money comes from.

Children today have an even greater challenge than we did.  We might still remember putting our hands into our little jeans pockets and pulling out wrinkled dollar bills and coins.  It was painful handing our precious money to the nice storeowner in exchange for some candy … and watching our money disappear into a big cash register.

But today, it’s all too easy for kids to think money appears miraculously (and effortlessly) out of the wall.

All you have to do is walk up to that wall, slide a piece of stiff plastic into a slot, push a few buttons and—voilà! —out comes money.  The relationship between money and someone’s effort to earn that money is more tenuous than ever.  Even worse, we now call money “funds,” and send them around the world at the click of a mouse.

At the appropriate age, kids can be taught that, while the total amount of money in the world is virtually limitless, the amount available to them (or to the family) at that moment is limited and has to be allocated based on needs and priorities.  How that is done is up to each parent’s beliefs, but the important thing is that it be done.

We cannot function effectively in the world without a healthy relationship with money.  So don’t ask your kids to live without such a relationship in the future because you were a little uncomfortable teaching them about it today.

You won’t be doing them any favors by protecting them from that bugaboo called money—through silence or by indulging.  In fact, one of the greatest gifts you can give your kids is to prepare them to be responsible, empowered adults around money.  You can do that by making it part of your awareness every day … and part of the family conversation when the time is right.


Raising Kids with Healthy Money Beliefs

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Sharon O'Day

Sharon O'Day

Sharon O’Day is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today, she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy.
Sharon O'Day

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  1. says

    What a great article! Thanks for getting me thinking about this topic. Seems like the Gremlins concept can apply to a lot of things other than money, too!

  2. Maria says

    This is great. I’ve been trying to raise my children with a more open/healthier attitude about money. I tend to use language such as “I don’t choose to spend our money on xyz” etc. for things that we could afford if we chose. Also comparing costs of items, allowing our children to save their money for special items etc. I’m not perfect but I am definitely trying.

    I did tell DD I was no longer buying her expensive leggings after she ripped through the 4th pair in a month! We could have bought 4 chintzy pairs for the cost of one and I explained that to her as well. That they aren’t as soft or nice or as well made but that they all will all rip if you wear/use them as though they were jeans, so we were only buying cheap ones from now on, LOL.

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