How To Lay A Rock-Solid Financial Foundation For Your Child Interview With Mothers Teaching Money
Why we do not teach kids about money in school is beyond me, budgeting, saving, investing, donating. These are essential life skills that many master much later in life. Money was scarce as I grew up and I definitely grew up with a scarcity mindset. Becoming a mother changed my relationship with money hugely my priorities changed. Money became an opportunity for a long term partnership rather than a month by month plaything. I feel it is deeply important to teach my daughter about money from an early age. I’ve shared a few great books below but what I really wanted was practical print outs and something my 7 year old would remember. Which is how I discovered Laurel Makowem and her amazing site Mothers Teaching Money.
Hi Laurel, Welcome to No Mum Is An Island. I am a great believer that no mum or dad should have to do everything themselves, we can’t possibly know it all, and we need all the support we can get, there is a wealth of information out there to help us upgrade our parenting experience, to make our lives easier and this website is a hub for just that! We love you have upgraded your life by using your passion to give your son a financial education to learn about money and then share it so other parents can join the journey.
You say on your blog that your relationship with money changed when you realised you wanted to give your son a thorough financial education, yet you realised you were incapable of giving it to him – as you were financially illiterate. How did you change that?
When I started on my financial journey with myself and my son, I didn’t even know I had a ‘relationship with money’. I thought a financial education was about money only and dived headfirst into learning about investing.
Our financial education started, but the more educated I became the more frustrated I got because I just couldn’t seem to implement what I was learning into my own life.
Slowly it dawned on me that I had a highly emotional toxic relationship with money and was operating from a place of scarcity and fear (and a fair amount of shame). Regardless of how much I learned, I was going to keep on failing unless I did the inner work alongside the outer work.
Just a bit of background of my emotional situation at the time – I was in my late 40’s and after a violent hijacking in South Africa, had lived with post-traumatic stress (PTSD) for about 20 years. After 10 years of infertility treatment and 3 miscarriages, my beautiful boy arrived. Post-natal depression on top of PTSD turned me into a very ill, anxious mum. When Daniel was two, we emigrated to New Zealand. It was challenging but unbeknown to me, a change in my physical location would give me the opportunity to start healing.
I had no idea how this financial journey would be one of the greatest growth experiences of my life and infiltrate into every aspect, including my relationship with my body and food and of course the impact of a well mother on her son.
I had a choice, I could either acknowledge this relationship for what it was and set out to try and change it, or I could carry on as I was.
Because of my son, I chose to change it.
The more inner work I did, the more financial changes I made. And the better I became at laying a rock-solid financial foundation for my son.
I have learned that everyone has a relationship with money and unless we choose to isolate and live off the land, we cannot opt out of it. Money is everywhere and part of almost everything we do.
Changing our relationship with money is a process that requires time, effort, vision, patience, gentleness, commitment and determination. The more you learn, the more opportunities you create, the more confident you get, the more motivated and inspired you feel to go to the next step.
Thankfully my husband is in finance so took care of investing in assets and planning for our future. I realise now that even though, on the surface I showed no interest, I was actually just plain terrified and it was probably easier to continue burying my head in the sand.
On your website, you say “ Financial experts and our common sense tell us that we should spend less than we earn and save some of our money regularly, consistently and automatically.” why do you think it is that so few people live by that?
There are many reasons, but I think the two main ones are lack of a formal education and the money beliefs we unconsciously create as children.
These beliefs are so powerful and drive how we think about money, how we make financial decisions, what we do with our money and ultimately determine our financial situation.
Experts tell us that our money beliefs are set by age 7 and that our children learn the most by observing their parents and other adults of influence in their communities, religions and cultures.
It took me a long while to be able to uncover some unconscious beliefs and start to make sense of why I didn’t spend less than I earned, didn’t save and more importantly why I didn’t even think about long term financial planning and creating wealth, let alone do anything about it.
I grew up in a loving blended family where there was enough money (not heaps but we didn’t go short). But money wasn’t talked about and it felt as if it was a bit secret. The ‘dad’ figure handled everything related to business and money and it was only ever discussed with other ‘dad’ figures. The ‘mom’ was given money each month and there was a lot of anxiety around how that money was used. I also learned that rich people were greedy and not kind. And I clearly remember being a little girl at a Christmas party with our neighbours and an adult of influence in my life jokingly told me to ‘marry money honey’. The adults laughed and I burst into tears.
These experiences led me to believe that money was something secretive and made you greedy and unkind (so on a subconscious level why would I want it?). I also believed that because I was a female, I wasn’t capable of earning or having money. I can also see that I feared there wouldn’t be enough and I would be judged if I bought something nice for myself.
These beliefs together with a lack of a formal financial education resulted in my not earning what I was worth and definitely not negotiating for a raise, not saving anything, spending exactly what I earned, not creating long term wealth and security and feeling anxious and unworthy.
I also think the universal mindset of ‘save if there is anything left over’ needs to change to ‘save and then spend what’s left over’. If everybody starts doing this, it will become our norm.
Consumerism encourages us to spend and accumulate and social media and advertising tells us if we spend, we will be happier.
So, it’s actually a web of reasons but it doesn’t mean we can’t change it.
“A growth and abundance money mindset is one of the most powerful building blocks for raising financially savvy children.” can you share a bit more with us why this is so important?
I understand a person with a growth and abundance money mindset as someone who thinks they are capable of achieving anything they set their minds to and are prepared to put in the effort. They see a world full of opportunities, learn as much as they can, don’t give up easily and are kind and generous.
We know how powerful our thoughts/mindset is and how it drives our decisions and behaviour and ultimately creates our situation. We also know our beliefs drive our thoughts.
It makes sense to me then that if we teach our children healthy supportive money beliefs, a growth and abundance way of thinking, together with a comprehensive financial education, surely we are setting them up to make educated and informed financial decisions and create a successful financial situation for themselves and their own families.
I like to use the concept of a funnel of opportunities to show children how their beliefs, thoughts and behaviours all work together to create either a good or a bad result and how we can actually be in charge of choosing that result.
When I became a mum, I was mentally ill, depressed, paranoid and anxious. I was a bit of a mess and as my little boy grew, I realised I had to do something about it, otherwise, it would no doubt affect him for the rest of his life.
Dr Carol Dweck’s book MINDSET: THE NEW PSYCHOLOGY OF SUCCESS helped me change my way of thinking, my life and my parenting.
It’s essentially about understanding why some people give up and others keep going. She says that intelligence is not only based on IQ but is something anyone can achieve with effort, work, determination and persistence. And this is the concept of the growth mindset. People with the opposite, a fixed mindset believe their basic abilities and talents are fixed, talent alone creates success and they often feel scared to take a risk in case they fail.
I knew for sure I had a fixed mindset.
I’ve always been intrigued by the concept of an abundant universe but never took the time to fully understand it or work with it. About three years into our financial education journey, I discovered the abundance mentality in Stephen Covey’s THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE. A person with this mindset believes there are enough resources (including money) and successes for everyone. In contrast, a scarcity mindset sees money and other resources as zero-sum games where more for others means less for you and visa versa.
I had no doubt in my mind that I had a scarcity mentality.
I have been working for years now to change my fixed and scarcity mindset to a growth and abundance mindset (I think this could be neuroplasticity at work). And what a difference it makes. It made perfect sense for me to combine these two powerful mindsets as the basis from which to teach my child about life and about money. I can see my son operates mainly from this mindset and if I hadn’t made the decision to change mine, I think he would operate from a fixed and scarcity mindset.
(Neuroplasticity is the ability to change and grow our brains over time).
Can you share with us how we can start these important financial conversations with young children?
Best piece of advice I ever got was “just start” and educate yourself while you are educating your child.
But I suggest you give yourself a little bit of a head start by having a gentle look at your money beliefs, money mindset and financial habits. Notice how you speak to yourself about money and about yourself and money. Notice, without judgement how you spend and how you save. If you don’t budget, commit to starting. Read a financial article every day and look up the meaning of one financial word/term/concept that you don’t know.
Keep financial conversations short and to the point – no waffling. Let your child guide you as to how much information they can take in. My son quickly taught me that I had about 45 minutes max to explain something to him. I would see his little eyes glass over, and I knew I had lost him and he was bored.
Be intentional and find and create opportunities to have those financial chats. Talk about money as much as you talk about ‘sharing is caring’, brushing teeth, being kind, manners, ballet, soccer, art, healthy eating and tennis. Normalise it!
Go on financial discovery outings (you are doing them all day every day anyway) and talk about assets, liabilities, how much things cost, who makes what money from doing what, how much they have to pay to the government, credit and debit cards – chat about whatever you are dealing with at the time.
I try and create fun visual images that will hopefully stick in my child’s head. We made videos where we dressed up, role played, danced, laughed and learnt about money.
We made a video about ‘pay yourself first’ where Daniel was the ‘richest man in Babylon’. He will never forget the concept of ‘pay yourself first’ even if he strays off the path, he knows the right thing to do.
We also made a video about compound interest where Daniel’s dad was Einstein (who supposedly called compound interest the 8th wonder of the world). We had such fun as a family and were literally rolling around on the floor laughing. Daniel was introduced to the concept of compound interest before he was a teen and I only heard about it in my late 40’s.
I find activities, games and board games (like Monopoly and Cahsflow) are great conversation starters.
Use the correct financial jargon so these words become a normal part of your child’s vocabulary.
Remember that learning how to manage money is about mastering a whole lot of different life skills. Skills take time, effort and practice before they are mastered and become habits.
You have an amazing video of your son talking about assets and liabilities in terms of a smoothie ( an asset as it is healthy and gives his body energy over a sweet which is a liability and not good for him) why is it so important to keep it fun with kids?
If something is boring and tedious and forced on me, it’s certainly not going to inspire me or keep me engaged. So why would I expect my child to be any different? I need to find ways to keep him engaged with me and his financial education.
When Daniel and I first started our financial education journey, I clearly remember him looking at me and saying, “but mum, money is so boring and not cool”. He also told me that I was the only mother that made their kid learn this boring stuff.
Daniel wanted a YouTube channel and I wanted him to get a financial education. We made a deal; I would do all the ‘boring’ stuff if his channel was about money. He reluctantly agreed but once we started, it was such fun and he was keen to carry on AND he was learning heaps about money.
My husband is fully involved in all Daniel’s education and loves to draw when he’s explaining something. So, we often have a big sheet of newsprint laid out on our dining room table where we all write and draw as we are learning, discussing and chatting about money, business and economics. Invariably the newsprint becomes full of jokes and funny illustrations which have nothing at all to do with a financial education. But the lessons are getting learnt.
Children love to draw, create, express, play games, be active and silly, so I think we should incorporate all that into our teaching.
It must also be relevant for them and make sense in their world.
Be mindful of their attention span and be able to explain the financial concept in no more than a minute.
Children learn early on about the tooth fairy and how it gives us money in exchange for our teeth. This is fun and feels like magic but what is even more fun is introducing them to Fluffy, the Compound Interest Monster. Let them experience the real magic of money.
Is it hypocritical if the parents are teaching about the importance of saving and not living it? How can we model behaviour if our own finances situation needs work?
I think it’s fantastic for any parent to want to teach their child about money. And believe me, I fully understand just how difficult it can be if you aren’t living the lessons you are trying to teach them or don’t really know what you want them to learn.
Of course, role modelling is the best way for our children to learn life skills and I think that should be our goal. But as I said earlier, don’t wait until you think you have enough knowledge, rather educate yourself while you educate your child.
Practicing what we preach took on a whole new meaning to me when my son was about six. I have always had a bit of a yo-yo relationship with chocolate and would have my own little stash hidden away that I would enjoy in private. One day I found my young son hiding away eating a chocolate and I realised that he was 100% copying my destructive behaviour even though I had been preaching the opposite about good nutrition etc since he was a little tyke.
First and foremost, I think it’s important to make a commitment to yourself to stick to your guns, no matter how challenging it gets. One sure thing in life is that the curveballs and challenges will come. If we know this, we are prepared to deal with them and won’t let them knock us off track.
If we are intentional about teaching our children how to manage and grow money with a growth and abundance money mindset, we would be raising a generation who believe in their own capabilities and know how to create opportunities for success and happiness for themselves and their families.
How can parents who want to teach their children about money find you and what resources do you offer?
Top of mind for me is to support mums as they lay a rock-solid financial foundation for their child. My products are downloadable black and white printable activities for children that come to your inbox. They are designed to facilitate financial conversations and provide plenty of opportunities to learn, practice and master financial skills. Mums guides are included.
A growth and abundance money mindset is at the heart of the products. I am in the process of creating a gang of Money Mindful characters who are either learning a financial skill, getting better at a financial skill through practice or practicing the mindset.
My first product, Earning Money with A Growth and Abundance Money Mindset is a bundle of activities, posters, colouring in pages and conversation starters, all to help children learn they can have as much money as they are prepared to plan and work for. Not only do we touch on different types of income and income streams but concepts like delayed gratification, the difference between needs and want, chores vs work and financial goal setting are included.
I run workshops for mums and for tweens and their mums and am currently working on a colouring-in-book-journal broken down into 5 sections, namely mindset and how to get, keep, grow and share money.
New products are continuously ‘under construction’ and I cannot wait to share them and support mums everywhere as they teach their children the one life skill that every adult uses every day.
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