Today’s post features advice from Leslie Dashew, author and family business consultant. When asked of the top 10 lessons that parents must instill in their teens in order to ensure financial responsibility, this is what Leslie offers:
“As an advisor to families who have businesses or share assets, I have often been called upon to help parents think about how to do their most important job: to raise the children to become healthy, competent adults. What we know about emotionally healthy, competent individuals is that they have a sense of purpose, a passion in life; and a sense of competence and confidence based on their own experience of accomplishments, on facing and overcoming challenges, and on experiencing reciprocity of responsibility.
To define these terms:
Sense of purpose: I believe there’s a reason I’m on this planet and I seek to achieve this mission, which is often connected to my passions — those things that give me energy.
Competence: I gain competence through practice, persistence, commitment, and achievement, which leads to a feeling of confidence.
Confidence: When I face adversity and survive, I grow even more confident in my abilities.
Reciprocity of responsibility: I recognize the two-way nature of relationships and the importance and joy of giving as well as receiving.
As parents or family members, our role is to do what we can to give children or others the opportunity to develop those competencies and achievements.
Strategies for Reaching this Goal
As parents we are challenged with how to provide the right environment, opportunities, and “coaching” so that our children can develop into healthy, competent adults. Many heirs have shared with me how important it is that their parents “parent” them, investing the time and love themselves. In doing this, we must:
- Instill realistic expectations about life and the world. There are limited resources, whether they be money, time, energy, or water. Having financial resources is lucky; not “deserved” nor a culpable act. Neither is it something to take for granted. We all need to appreciate the limitations on other resources and work to manage them carefully.
- Help youngsters identify their own gifts: talents, interests, and mission. Encourage them to develop these gifts with commitment, persistence, and joy.
- Share your own views, personal mission, and beliefs. Your own clarity about identity helps them feel good about themselves. Demonstrate a work ethic by your own behavior: if they see you gaining pleasure and esteem through your activities and engagement, that is what they will learn for themselves.
- Give them opportunities (and even necessity) to develop competence, allowing them to do what they are capable of rather than doing it for them…including “stretch” goals. Encourage work and volunteer activities that develop skills and challenge their current capabilities. If a child can dress himself, let him. If a child can make her own sandwich, let her. If he or she can make decisions about where to spend allowance, encourage that budgeting.
- Model and teach effective communication, the most essential competence as a human being: including listening, sharing of feelings and constructive feedback.
- Avoid over-indulgence and encourage the capability to delay gratification and develop persistence; let them work through their own problems without “bailing them out.” Allow them to experience the consequences of their own actions and decisions.
- Teach financial competence (making choices, budgeting, good stewardship, etc.) as well as understanding of banking, stocks, bonds, and types of investments. Start very early: 5 year olds, who get $l allowance can learn about saving some, tithing, etc.
As families we can also provide shared learning opportunities, policies, and practices that encourage the next generation’s development of healthy competencies and attitudes. Whether informally or formally, develop family organizations for this purpose.
- Create a Family Mission Statement and family organizations (e.g., family council) in which the family values are imbedded. Formulate a family creed, a statement of values/philosophy that is manifested in the activities and behavior of the family. Establish policies about the use of family assets and working to earn opportunities in the family business or use of family resources (rather than entitlement).
- Focus on non-financial assets: What can we do with our own skills/knowledge? How can we continue to grow them? How do we support the community to which we belong? How do we cultivate our spiritual connection or resources?
- Provide a forum for ongoing dialogue about the challenges of being affluent (e.g., a cousins group who talks about what it means to be wealthy, the status and stigma of having a name associated with wealth, etc.) or living in an environment where people are affluent and expect kids to have the same access to resources that they do.
One of the outcomes of having children is that they test our values and help us refine our thinking about what is most important to us. Dialogue with our teens about these beliefs, challenges and opportunities can bring us closer to one another at a difficult time in family life.”
Easy Action: Teach your teen a great money management system that is age-appropriate.
Resource at Your Fingertips: WealthQuest for Teens’ Silo System teaches a system that works great for teens now AND for the rest of their lives.
Remember to Pledge to teach your teen to be an excellent money manager! Let the world know that parents are doing their part to build a financially literate society!
© Your Teen’s Money Skills, Inc., 2012 All rights reserved worldwide.