Children Form Perceptions About Money By Watching Their Parents

by Lisa McCarthy

Money PerceptionsThe other night I had a book-signing event at a local public school. The event began by talking to the parents about why it is so important to educate children on money and finances. After the parent discussion, we brought the children into the room and read my book, The Money Tree.

Kids get so excited when talking about money. It was so fun to hear them shared their thoughts. During this discussion, one little boy raised his hand and said, "My mom is super smart -- she saves all her money and never spends it!"

"Wow that is great how does she do that?" I asked.

"Well," he replied, "She just uses her credit cards."

After the laughter died down, and his mother crawled back out from under the table, there was a silent pause. I look around the room and you could see every parent thinking about what they themselves are showing and teaching their children about money.

There is a lot of talk about financial literacy in schools. Ultimately, children form their perceptions on how money and finances work by watching their parents. Today it is even more important that parents are talking about money with their children, as soon as the child starts asking for things!

The advances in technology have enabled us to use credit card, debit cards, and even our smart phones as the standard mode of payment. In a child's mind, the relationship between paying for something and spending money is not so clear cut as it was in the days when you had to hand over your hard earned cash.

Young children do not understand that with each swipe of the card or the phone you are actually spending money.

Years ago, I remember my brother telling my mom one day not to use her money but to write a check instead. That night, my father sat us both down at the table and explained how checking accounts and buying thing on credit cards worked.

After that, every time a check was written or a credit card was used, we got the same lecture. My father was one who didn't believe in buying something unless you had money in the bank to pay it -- and he consistently reinforced those values to us.

I am sure my dad thought his lectures were going in one ear and out the other -- but I can tell you every time I make a purchase to this day, I calculate if I have enough in the bank to pay for it. This one small lesson has gone a long way in helping make me a financially responsible adult. As parents, isn't that what we want for our children?

Lisa McCarthyLisa Laughton McCarthy is a mom with a passion! As the founder of MoneySmartKidz and author of "The Money Tree," Lisa, takes delight in finding fun creative ways to help show young children the value of financial independence! Her first book "The Money Tree," with its eye-catching illustrations, is the answer to every parent who wants to give their child a head start on the road to financial independence.

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