Hello parents, Kids & Money fans, and followers — it’s been quite the journey! This final lesson in our series ties together all the concepts and financial life lessons for kids that we’ve discussed, by taking a look inward to our lives as parents. One of the final concepts we covered, relational budgeting, addresses the most difficult paradigm shift any of us will encounter when it comes to money – the consideration of others.
Financial pressure can lead to relationship pressure
When I got married, my wife and I started down the path of learning how to work with each other when it comes to what we do with our money. Just when we thought we had it all figured out, we brought a child into the equation, making it much more difficult. Why is it so hard to develop a symbiotic financial relationship? The pressure we feel financially becomes the pressure we feel relationally. But, there are ways that us parents can work on that.
A technique for spouses to aid consideration
I conduct an exercise with a few of my clients that has them (as a couple) prioritizing typical concerns and issues as it relates framing their retirement goals. They are given a stack of cards representing these issues and all they need to do is place them in a stack according to order of priority.
It didn’t take long before I started to refer to this exercise — light-heartedly, of course, but also with a bit of truth — as “marital counseling.” In fact, I used to give each spouse their own set of cards. But after several uncomfortable marathon meetings trying to reconcile two completely different orders of priority, I made the executive decision to have the couple work on one set together. This exercise alone was (and still is) a perfect example of the lack of communication that often presents itself in the arena of personal finances.
Financial priorities can be easier when you’re single
Simply put, before we partner up with someone almost all of our training and experience with money involves one person: ourselves. All decisions are easily greenlit and rationalized when there’s no one else to offer resistance. The implied assumption is that it is all for our personal consumption. (By the way, that is also a pretty good definition of greed.)
And then… we meet that special someone. Suddenly, “my” money is “our” money. All at once, priorities are forced to change — and they often do not align. Without prior experience of managing a shared budget or a family budget, lack of communication — and arguments — ensue.
Finding a way to address shared finances early on
However, what if we could address the issue in the child-rearing years? What if we found a way to have our kids consider and communicate with others when it comes to money? What if we gave them the prior experience they need early on, to make the transition of adding someone to the personal finances team later a much smoother ride?
If we do this correctly, we can bring into play the previous lessons discussed herein and create a synergy in our curriculum (so to speak) with our children. This will set them up for great success in managing their personal finances as a young adult and into adulthood. When your kids learn to consider others and communicate as it relates to saving and spending money, you are meeting the challenge and preparing your child for further success.
If you’re new to Kids & Money, you can find the full series of financial life lessons for kids (and the whole family) here.