I remember when I was a child I thought my parents knew everything there was to know. Anything I asked, they had an answer. Now that I have children of my own, I see that same thing happen.
To my kids, I am a wealth of knowledge on how things work in the world. When they ask a question and I give them an age-appropriate answer, they say ‘how did you know that?!’ I tell them: ‘I passed the Mom test!’
The only thing is, as I get older, I don’t have all the answers. (No one really does except God, right?) As my children grow, they’re beginning to ask questions I don’t always have an answer for. It was the same with my own parents; they went from being able to answer all my questions to coming up short sometime around my late teens to early twenties. That’s when I thought I knew EVERYTHING.
I needed to learn some things on my own, just like my kids now do.
However, when I became an adult (and a parent), my own parents became fountains of knowledge again. They shared valuable advice with me and I realized: our children see parent knowledge like an inverted bell curve.
To them, we start out with all the information in the world, like the Great Wizard of Oz. In their teenage years, we become ‘dumb’ and don’t understand anything, but then we’re back on top when they start ‘adulting’.
As we go through this inverted bell curve with our children, I think it’s important to realize how we can use this opportunity to guide them toward a positive relationship with money.
We give them allowances when they’re younger to help them learn about saving and spending. As our children grow up, we get to teach them bigger lessons.
College Lessons
College is a time of huge growth and learning for our children. They take classes in new subjects, meet people from all over the country, and perhaps even get a chance to travel themselves. Managing money plays into all of those things, not to mention the cost of going to college. So why don’t we prepare our kids for the financial parts of college?
Here’s a smart move that your kids will hate, but will provide a great lesson for them.
I’ve always felt that parents would do well to send their children off to college with a budget instead of a credit card.
Why?
Because a budget helps kids put limits on their spending and learn that money is finite. Credit cards, on the other hand, teach them that money is unlimited and that someone else will foot the bill.
Instead of a credit card with a $1000 limit, set up a direct deposit of $1000 per month – or $500 twice a month. Students can decide how to spend it. They can pay for things like rent, books, pizza, club dues — let them budget for themselves.
The most important lesson in this method is the understanding that when it’s gone, then it’s gone. If they need more money, they may need a job to fill in the gap.
Having a budget and spending limit teaches teens to spend responsibly throughout the month, as well as showing them the pain of having no money if they go through it too quickly.
Resources
I’ve found some good resources for parents who want to send their kids off to college with the financial tools they really need. Knowsy Moms has a lot of articles on how to move your child into college, how to deal with the pain of missing them, and the financials of it all.
I’ve also created a course right here for newly accepted college students. I break down the personal and financial skills they need to know before leaving the nest. So if you want to give your child a leg up on finances and college readiness, this is the course for them!
What do you think of the inverted bell curve of parental knowledge? Have you experienced it in your life?
Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice and asset management for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.