How to Talk to Your Kids about Money

By kbk | Published: March 9, 2010

In the next 10 to 15 years, young adults will inherit approximately 1.5 trillion in assets.  With this transfer of wealth, the importance of teaching financial literacy and fostering financially thoughtful children is paramount.  What do you need to know as a parent to help pass on financial skills and knowledge to the next generation?  Here are some ideas for you to consider:

Start the Money Conversation

For many families, talking about money is taboo.  Longstanding beliefs about what is appropriate and not appropriate to discuss with your partner, spouse, friends and children result in a communication gap that negatively impacts the next generation.  Without adequate financial literacy, children will be ill- prepared to emotionally and financially handle wealth.  While parents want to give their children the skills to succeed in life, many do not have a road map for financial conversations and need a little help getting started. 

To figure out how to teach your children and loved ones about money, it is important to look at your money history, identify the issues you are uncomfortable talking about and learn new skills for having effective money conversations.  This is where working with a wealth coach can really help.  While you may not have been given a road map, it is never too late to learn how to create one. 

Learn Together

When is the right time to start talking about money with your children?  The sooner the better but make sure the content of the discussion is developmentally appropriate.  By age 5, teach your children how much things cost and demonstrate how money is used to buy items for the home and the family.  By age 6 or 7, introduce a weekly allowance to help them learn basic money management skills including setting short-term goals and how money can be split into separate buckets – one for spending, one for saving and one for giving.  The general rule is a third of the total allowance goes into each bucket.  Between the ages of 8 and 10, help your children open a checking account and explain the power of interest and saving for the future.  In the early teen years, help them find paying odd jobs outside the home and educate them about setting long-range financial goals. Explain taxes and the economic concept of supply and demand.  By 15 years of age, teens are ready to develop more independence around money and are ready to assess job opportunities, learn about standards of living and make major life purchases.  If all goes well, by adulthood your children will have a solid financial foundation to make wise financial decisions and the skills to manage and talk about money freely. 

If you have not started the financial conversation yet, do not worry.  You can start today and learn together.

Learn Their Language

It is important to talk to your children and teens about money in their language.   Like it or not this often means using technology.  Research done by TILE Financial concluded that teenagers are motivated to become more financially literate and take this education very seriously, but they want to do this type of learning online.  Interestingly, the teens did not want to talk about money and wealth issues on existing social media platforms such as Facebook.  

Even though you may not like texting, emailing or going online to talk about money, your kids do.  Meet your kids where they are at and you will notice how your communication about money and other life issues improves.

Raising Financially Fit Children

Families need to learn how to talk about money openly, participate in saving, spending and giving together and learn to use technology to communicate with their children.  The result will be an increase in the number of financially thoughtful children in the world, a greater ability for the next generation to use their wealth responsibly and the increased likelihood that the family values will live on for years and generations to come.

What steps are you willing to take today to teach your kids about money?

Posted in children | Leave a comment

Raising Financially Fit Children

By kbk | Published: March 4, 2010

Listen to Kathleen coach Chuck Nilosek, host of the radio show Money Matters, to shift his money mindset and teach his children about savings and financial responsibility.  

Click this link to listen to the segment: Money Matters, Part 3.

Posted in children, radio show | Leave a comment

Your Financial Life in 3D

By kbk | Published: March 2, 2010

The recent trend in Hollywood is 3D movies.  First, came the movie, Avatar.   This record breaking film by Director James Cameron not only made box office history, it changed the industry with the development of a technology that makes filming in three dimensions easier.  Next up was How to Train Your Dragon, the children’s movie that was shamelessly promoted during the NBC Olympics coverage.  And lastly, the one that I am most excited about, Director Tim Burton’s Alice and Wonderland in 3D due out this Friday starring one of my favorite actor’s Johnny Depp as the Mad Hatter.    

What makes three dimensional movies so much fun?  Is it the newness of the genre coupled with the retro aspect of wearing 3D glasses in the theatre like they did in the 1950s?  Is it that our lives are so bogged down from the news of war, personal tragedy and another celebrity’s fall from grace that we need an escape? Or is it that real life is three dimensional and we just prefer to see a story told this way?  Whatever it is, 3-D is here to stay.

Wealth psychology is like this new film genre.  It is the new 3-D of the financial industry. It allows you to see the subtle nuisance in your relationship with money that are not visible in a two dimensional world.  It allows you to have insight into your money history, identify and change your thoughts and beliefs about spending, saving and investing and make conscious financial decisions to help you reach your personal definition of financial freedom. 

For years, financial services professionals have neglected the third dimension of wealth focusing only on teaching financial knowledge and skills.  It is important to learn the mechanics of money management but this has not been enough for individuals, couples, families and businesses to take care of themselves and avoid financial problems and in some cases, disaster.  The  psychology of money and wealth addresses the very human reasons why knowledge without insight leads us down the same path – over and over again.   By tapping into the thoughts and beliefs that block us from balancing our checkbooks, managing our credit responsibly and spending money we do not have, we can become more financially responsible as adults no matter what our childhood family lessons.  Recognizing all the dimensions of life and wealth is important and therefore, wealth psychology is here to stay.

What would happen if you viewed your finance health in 3-D?

Posted in financial intelligence, wealth | Leave a comment

Perspective Impacts Results

By kbk | Published: February 25, 2010

Christopher Del Bosco,a Canadian favorite to win the gold medal, placed 4th in the ski cross event the other night.  Del Bosco was in third place most of the race and easily could have won a bronze medal but his last minute attack on the course to pass the skier in front of him resulted in a wipe out and a 4th place finish.  When asked why he did not settle for third place, he stated “I was not there to win bronze.  I was going for the gold.”

Since the race, the media has highlighted his loss of bronze instead of focusing on his intention to go all out and win gold.  While this makes a good read, it led me to think about his perspective of winning.  For Del Bosco, being first was the most important thing, not getting a medal.  My guess is for many athletes this is the viewpoint they take that allows them to race at high speeds, risk injury and train for months and years for one opportunity to compete in the Olympics. 

In life we all have a perspective on what is important, what is worth taking a risk for and what is better left undone.   Money is no different.  Each of us has a money perspective that dictates what type of spending, saving and investing we engage in and how much we are willing to tolerate in an effort to reach our financial goals.  

Are you like Del Bosco, going for the gold?  Or are you more conservative and just looking to finish on the podium.  Whatever your perspective, it is important to identify, own and learn to live with the consequences when it does not work out.

I feel for him but I also think “Cool, he skied his heart out and went for what he wanted.”  In my mind, that is not a loss but a big win!  But that is just my perspective.

What is your money perspective?  How does it influence your financial behavior?  Is it serving you or getting in the way of reaching your goals and dreams?

Posted in money coaching, return on investment | 1 Comment

Are You Doing Your Part When It Comes to Credit Card Debt?

By kbk | Published: February 23, 2010

Yesterday, the long awaited Credit Card Accountability, Responsibility, and Disclosure Act which was signed into law on May, 2009, took effect.   This law requires credit card companies to notify customers at least 45 days before an interest rate change, allows card holders to exit contracts if significant changes are made to the terms of the agreement and prohibits issuing credit cards to anyone under 21 unless they can prove they have the means to repay the debt. Other provisions include more reasonable billing cycles, no additional fees for paying bills online and overpayments being applied to the higher interest balances first.  Overall , the goal of the legislation is to limit the credit card companies ability to take advantage of the consumer by charging excessive fees and instituting questionable policies and procedures.

I think this law is long over due.  I also believe this is a perfect time for each of us to evaluate our credit card use.  What leads so many of us to run up credit card balances, only pay minimum amounts each month and maintain credit card balances at high interest rates when we know intellectually this is not a healthy financial practice?  I have a few ideas for you to consider:

1. Confusing wants with needs.  A ”need” is an essential item necessary for daily living and includes things such as food, shelter and childcare.  A “want” is a non-essential purchase that supports your lifestyle but is not necessary to live.  Common examples of “wants” include dining out, a new sports car or a new set of golf clubs when the old will do.  Ideally, you are financial comfortable enough to purchase some items in the ”wants” category.  The trouble occurs when you start to use your credit cards to buy items that you do not need and can not afford.  A great way to get a sense of your credit card spending habits is to look over your last bill and label each purchase as a “need” or a “want”. If you notice that your spending is falling more into ”want” category and you carry a balance each month, it may be time to put the cards away, pay down your existing debt and ask yourself each time you make a purchase, “Do I really need this?”  

2. The desire to keep up with the Jones. Our society is one fueled by consumer spending.  Yes, it is American to spend money and use credit cards freely.  But at what cost?  What is the real price of having the latest iPhone, computer game or SUV?   Think about this the next time you buy something that you can’t afford, but want it because “everyone else has one” or it is the latest trend.  Is it something that will improve your life, make you a better person or is it a fashion accessory that proves to the world that you, too, can keep up with the Jones?   

3. The appearance of financial freedom.  Yes, credit cards allow us to buy what we want, when we want it and for whatever price we want to pay.  In the short term, these little plastic cards make us feel like we are free from financial constraints.  Well, at least until the bill comes in the mail!  True financial freedom involves developing a solid financial plan, living within your means and saving so that some day in the near future you will be able to live the lifestyle you want and have worked hard to achieve.  Financial freedom is a long term pursuit and what credit card debt does is it makes the date of reaching your financial dreams further away with each purchase, each missed payment and each finance charge.  Ask yourself next time you are at the counter paying for a purchase, “Is it really worth it in long run?”

Ultimately, laws are written to protect consumers.  But don’t wait for Washington to take care of you.  Take steps today to understand your past credit card use and in some cases abuse, and make a conscious choice to be more financially aware going forward. 

Imagine if we all did this what great shape our country would be in financially!  And who are the Jones anyway?  Probably some t.v. family from a 1950s sitcom that were never based in reality to begin with.

Posted in Uncategorized, financial intelligence | 3 Comments

Tax Refunds and Money Beliefs

By kbk | Published: February 18, 2010

My accountant called and let me know that my husband and I would get a sizable tax refund this year.  The good news is it is nice to be able to use this cash to pay down some of our construction debt.  The bad news is a big refund is a sign of poor tax planning and we vowed to do better next year communicating with our accountant and monitoring our tax position.

After the vow, our conversation revolved around the question of “What are we going to do with the money?”  As you can tell from the first paragraph of this blog, I planned on paying down our outstanding debt.  Why?  I was raised with a conservative father who managed his money by reducing his debt whenever possible.  Therefore, my money belief states ”when money comes in that you did not plan on receiving, you use it to improve your finanical situation through debt reduction.”  My husband, on the other hand, had a different idea.  His money script was “Great, free money!”  Well to be fair, he does understand that it is not bonus cash that the government is throwing at us.  But he does look at the situation differently than I do.  His money beliefs are influenced by a history of being raised by a single mother who could just make ends meet.  Therefore, debt is something you have and live with.  When additional money comes your way, this is your chance to have a good time. 

We are your typical couple trying to make a financial decision together.  Our money beliefs and perspectives are radically different but our goal is the same.  To live a well balance, wealthy life that does not revolve around our net worth but does not ignore it as well.  The plan?  This weekend on our ride up skiing we will have a financial conversation, hear each other out and then make the best “team” decision we can. 

What would you do with a tax refund?  Do you consider it “free” cash?  What money beliefs impact your tax decision making process?

Posted in Uncategorized | Leave a comment

Money does not grow on trees!

By admin | Published: February 16, 2010

This blog post was originally posted on November 6, 2007.

Money does not grow on trees, but beliefs about money do. From a very early age we learn about cash, currency and the power of the almighty dollar. Most parents do not sit us down and tell us about money the way they lecture us about manners or good grades. We simply observe. As kids we see our parents fight about money, celebrate cash, struggle to find resources or enjoy wealth and abundance.  Whatever our history, our current relationship with money started years ago. And unless we are conscious of our financial thoughts and beliefs, we will be limited by them.

What is your first memory of money? Was it when your big brother offered you fifty cents to go get him a soda? Was it watching your mom weep when she could not pay for the rent after your dad left? Or was it when your rich Aunt Silvia sent you a savings bond as a gift for graduating first grade? Whatever the memory, I can tell you it influences your check book balance now.

True wealth comes from knowing what leaves are on our historical money tree. We can keep the leaves and stems that serve us and prune away the rest. By examining our parents, grandparents, aunts, uncles and siblings thoughts, beliefs and actions around money, we can actively decide how we want to shape our relationship with money now and in the future.

Happy pruning!

Kathleen

Posted in money scripts | Leave a comment

Believing In Your Worth is the Key to Creating Wealth

By kbk | Published: February 11, 2010

Simply put, in order to create wealth in your life you need to believe that you deserve it and then do the hard work of changing your money scripts to support the idea that you can and should receive money in your life.   This process takes time but is well worth the investment.  Madeline is a great example of this in action.

Madeline is a 55 year old woman who had recently retired from a government job and opened up her own consulting business.  She is a talented professional but struggles greatly with asking for money from her clients.  By the time she came to my office for help, she had been in business six months and had not collected a dime for her services.  While she had 3 consulting clients on her roster, she gave her expertise away for free finding a way to never charge them for her services.  In the past, Madeline had been paid by her employer every two weeks and had never had to ask a client directly for money.  She came into see me as she knew she could not run a viable business without producing revenue and the only way to do that was to ask her clients to pay her!

In our first session she stated that she believed she deserved to be paid for her expertise; however, over the course of the next few meetings it became clear to me that she did not believe deep down that she was worthy of her fee.  Over the course of our work, Madeline explored her money history and identified a series of money scripts that kept her trapped as a professional volunteer.  One such script was “It is rude to talk or ask for money.”  She remembers being told this repetitively by her mother growing up.  Because Madeline worked for the government her salary was pre-determined by her job’s grade level, she never had to go against this parental money belief and therefore, never had to “be rude” and ask for money. But once she decided to launch her own business as a consultant she had to face this money script head on.

Eventually, Madeline adopted a new script that said, “It is not rude to ask for money from your clients, it is necessary to run a viable business.”  While she felt uncomfortable charging her clients in the beginning and experienced a lot of anxiety and fear of rejection, she learned that they wanted to pay her.  In time this new money script replaced the old one and she had many positive experiences getting paid that eventually made her anxiety about talking about money go away.  Yes, something had shifted internally.  Madeline was no longer just saying she deserved to be paid.  She BELIEVED IT deep down inside.

Madeline, like many of my clients, fell into the trap of under earning due to her conflictual feelings about money and wealth.  Once she truly believed in her worth, her business took off and she started accumulating wealth.

Do you believe?  If so, what helps you see and ask for your worth?  If not, what gets in the way?

Posted in Uncategorized | Leave a comment

How Can You Identify Your Money Scripts?

By kbk | Published: February 9, 2010

The following brief exercise will help you identify some of your money scripts. After I read each phrase, complete the sentence with the first thing that pops into your mind. .

Be sure you give your first uncensored response as your answer. Do not judge your responses and just notice what beliefs comes up for you.

1. Wealthy people got that way by…

2. Poor people are poor because…

3. The reason I do not have more money is…

4. Asking people for money is…

5. Talking about money is….

6. The relationship between love and money is…

7. The relationship between spirituality or religion and money is…

8. Financial freedom means….

9. Retirement means…

10. The lesson I want to teach my children or young people in my life is…

Your answers are some of your money scripts. For example, if you completed the sentence Asking for money is rude; than this is a belief you have about money. If you stated that “the relationship between love and money is non existent.” This is another belief about money. Do not judge your responses. Money scripts are not good or bad. These are just beliefs and later I will teach you a technique for changing the one’s that do not support reaching your financial goals.

What did you discover?

Posted in Uncategorized, money scripts | Leave a comment

What Is Your Money Mindset?

By kbk | Published: February 4, 2010

The sum of all your money scripts equals your money mindset. And the tricky part of discovering this mindset is some of the thoughts and beliefs are conscious ones and some are buried below the surface or subconscious. Remember Susan? She had a money script that was negatively effecting her financial planning; however, until she did wealth coaching this thought lived in her subconscious. The work is to bring these thoughts and beliefs to the surface so you can evaluate each one and decide which one’s will bring you toward wealth and which one’s will keep you stuck in financially unhealthy habits.

Your money mindset is influenced by a variety of factors. These include your family your culture, your gender, your social class and your personal financial experiences.

Culture: If you grew up in United States then you were raised in a capitalist society that equates being a good American with buying products and services to fuel the economy. Right after the stock market crashed in the fall of 2009, the President of the United States gave a speech encouraging us all to go out and spend money. Interestingly enough we were the same citizens who that had just lost approximately 30% of our retirement savings! Your culture has a big impact on your money mindset and ultimately your financial behaviors.

Gender: Boys are raised to be competitive, to make money and to be good providers for their families in adulthood. Women are reared to support the family, to help others and to put their needs, monetary and otherwise, second to those around them. If a man demonstrates a profit driven he is great businessman. Conversely, a woman who is motivated by money is viewed as greedy and self centered. While some of this is shifting, it takes generations to truly change mindsets.

Social Class: The social class you were born into also influences your money mindset. If you were born into an affluent family, chances are your view money and its purpose in life is dramatically dissimilar than if you were raised in poverty in the inner city. In a lower income family money was used to buy food, clothing, and shelter and to provide for basic needs. In a wealthy family, basics needs would be easily taken care of leaving excess cash to be invested, to support an enjoyable lifestyle or to pursue philanthropic endeavors. There is an assumption made by many that states that if you are born into affluence than you have a healthy relationship with money because there was an abundance of it in your life. Actually those from extreme wealth often have more work to do on their internal feelings about money than those who were born without.

Personal Financial Experiences: The last area to consider when looking at what contributes to your money psychology is your personal money experiences. Significant money events, including wining the lottery, receiving a sizable inheritance, filing for bankruptcy, an expensive divorce, being laid off, not getting a raise and the like, leave a lasting mark on your money psyche and ultimately alter our money scripts.

Beth is a good example of how personal experiences around money can profoundly impact your money mindset. You see, when she was young Beth worked as a babysitter like a lot of young boys and girls to make some spending money. She worked for about a year with a family and knew that they liked to hire her as she could manage watching all 4 of their children when they were out. At one point, Beth decided to ask for a raise and was never called upon to babysit again. This left her feeling unworthy and ashamed of wanting more money.

Flash forward 30 years, and Beth is now working as a family childcare consultant. She learned that her rate is low and she wants to increase it be more in line with the market rate for family childcare services. She is nervous but decides to face her fear and ask her employer for a raise. Beth’s request is denied and her belief that she is not worthy of a raise is reinforced. Her personal experiences with money, while only two instances, negatively impact Beth’s ability to demand and receive a fair wage.

What’s influencing your money mindset?

Posted in Uncategorized | 2 Comments

  • “Kathleen is wonderful at leading a group with humor, encouragement, fun, and useful activities, and a gentle push out of your comfort zone.” Leanna Hamill, Attorney-at-Law, Hamill Law Offices

  • Subscribe

    Syndicated RSS feed

  • Latest Blog Posts

  • Browse Archives by Category

  • Browse Archives by Date