Positive Financial Habits

by Nicole Dugan

Childhood Habits Stick With You

People are a product of their environment. It’s a common enough saying, but how does it apply to your life? It may not be surprising to learn that most habits developed in childhood stay with us into our adulthood and, once formed, these habits are hard to break. Diet patterns, for example are formed in childhood – once the habit of having a midnight snack is developed, it tends to stick.

A few weeks ago, I accompanied my boyfriend’s sister, Joy, and her three year old daughter, Brielle, to Liberty State Park so that Brielle could see that Statue of Liberty. Joy explained to her daughter that the Statue of Liberty was a gift from France and a symbol of freedom for people who moved here from other countries because they did not enjoy all the freedoms we enjoy in the US. I listened to this explanation, eager to see how it would be absorbed by a younger audience. Brielle expressed more interest than I would have thought possible as to why France gave us the statue and what kind of freedoms people in other countries did not have.

It’s Never Too Early to Start Teaching Your Kids About Money

I tell this story to demonstrate how easy it is to mold the values and habits of children at a young age. Just as it is important to teach children to have good values, to eat right, and to share their toys, it is important be upfront about the need to form a positive relationship with money. Once you instill your children with basic finance and budgeting knowledge it will be easier to teach the more complex concepts, such as how to invest in stocks, later in life. An article in Forbes entitled “The 5 Most Important Money lessons to Teach Your Kids,”  states that kids’ money habits are formed by the age of 7.

Forbes goes on to describe a few lessons that can be taught to create financially savvy children. One key example is to explain that you may need to wait in order to buy something- delayed gratification.  Teaching “delayed gratification”  instills the importance of saving. If a child asks for something, ask them to help save towards it or do chores in exchange. This isn’t to say that you can never give your kids something simply because you want to, after all everyone enjoys being spoiled sometimes, but making instant gratification attainable on a regular basis can be damaging to your kids’ future financial practices.

Good Financial Habits are Taught

When I was younger, my prized possession was my American Girl Doll, Molly. My parents bought me the doll as a gift and would often purchase accessories for Molly on my birthdays. If I wanted a new dress or accessory for Molly, and my birthday wasn’t close by, I saved up to buy it myself. This taught me the necessity of saving for things that I wanted.

I’m no expert on parenting, but I draw on experiences I had growing up and can honestly say that behaviors that were taught by example have shaped my financial habits For those of us who were not taught positive financial habits at a young age, never fear- it’s not too late to learn!