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How to Navigate Family Conversations about Money

headshot of milli osburn outside, wearing a blazer, and holding a can of sparkling water.

Molli Osburn, M.A. (she/her) is an expert on math anxiety and the author of Beyond Math Anxiety: 99 Insights (And a Calculation’s Not One!), which was released in 2018. More recently, she has begun to branch out from anxiety about math to anxiety about money. What most people don’t realize is that anxiety about math in childhood can often (but not always) show up as anxiety about money in adulthood, and that strong family communication across the generations is the key to banishing both. Molli helps young people and their primary caregivers bridge that gap through her writing, public speaking, and individual coaching. In her spare time, Molli enjoys reading, cooking, crafts, and the great outdoors.

Money: A Potential Can of Worms

The holidays are coming, and your teens and young adult children might have seemingly extravagant wish lists: cars, laptops, phones, clothes, shoes, and trips, to name a few common examples.

After the holidays, spring is right around the corner, which means that many high school seniors will be deciding where to attend college, and sophomores and juniors might be beginning the admissions process, or exploring other options. Similarly, young adults may be graduating from college or professional schools or entering the job market. 

Whatever your family’s situation might be, these scenarios all have one thing in common: talking with teens and young adults about money.

Money is a challenging subject to discuss for many parents, caregivers, and grandparents, and even for many teens and young adults. Contrary to popular belief, money is not just about numbers or facts.

Money also brings up a whole slew of emotions, which can easily cloud one’s judgment and make communication more difficult, and can potentially cause new conflicts (or deepen pre-existing conflicts). This is true no matter what your family’s financial situation.

In order to avoid or minimize such conflicts, it is vital for you as a parent or caregiver to take a minute and reflect on your own money stories, and the impact you might or might not be having on the next generation.

How the Past Affects the Present

The language you use with your young people matters, and even a slight tweak can make a world of difference. Two of my favorite specific examples in this category are the difference between “I messages” and “you messages,” and the difference between “shoulds” and “coulds.” For the former, “I messages” are generally more effective than “you messages.” Similarly, “should” statements imply that there is one correct way, whereas “could” statements imply that there are many possibilities.

If you do slip up and use a “you message” or a “should,” take heart. For many adults, they are unconsciously reliving a painful past experience with money when they are doing so. Believe it or not, the past affects the present. If you grew up with financial instability, it might show up as fears, and sometimes, we project those fears onto the next generation. This isn’t necessarily a bad thing. However, parents and grandparents need to be aware of their own stories, so that they don’t project them on to the next generation.

With that in mind, don’t try to live vicariously through your teens. All too often, adults have regrets and forsaken dreams and sometimes unconsciously hope that their children and grandchildren will live them out.  Remember that your teen is their own person, and identity development one of the primary goals of adolescence and early adulthood. Furthermore, as a parent or caregiver, you can have a positive impact on your young person’s identity development.

Following are tips for parents and caregivers and young people for communicating about money. However, if you are a parent or caregiver, I would also strongly recommend reading the tips for teens and young adults, and vice versa. Similarly, these tips might also be helpful for communicating with your spouse, partner, or friends about money.

Tips for Parents and Caregivers for Conversations about Money:

*Give a firm response to any requests.

As I always say, “the answer is no” is better than no answer. If you need more time to think it over, give a specific time by which you will have an answer. For example, if your teen asks for a new phone, and you say, “maybe for your birthday,” then make a firm commitment to revisit the issue during the teen’s birthday month.

*Allow your teen to make mistakes, and admit to your own mistakes.

Parents sometimes have a tendency to coddle their teens and young adults, and to protect them from failure. That said, teens and young adults learn best if they are allowed to “fail,” and if “failure” is not vilified. So if your teen puts a dent in the car or spills soda on the laptop, don’t chastise them. Instead, help them work through a plan to earn the money to rectify their mistake. Similarly, if you make a mistake, own up to it.

*Remember that young people’s brains are still not fully developed.

Scientific studies have shown that the prefrontal cortex, the part of the brain that is responsible for critical thinking, logic, and executive function, is not fully developed until around age 25. With that in mind, teens and young adults might make unwise or impulsive decisions. However, they are still responsible for their actions, and such instances can be good learning experiences as they mature into adulthood.

*Consider allowing your teen to watch you pay bills, do taxes, or fill out the financial paperwork for a significant purchase or loan.

It is never too early to start teaching them about the basics of finance.

*If you do offer financial assistance to your teen or young adult, set clear boundaries.

For example, if you allow your teen to have a car, you might make an agreement that you are responsible for the down payment, but your teen is responsible for the insurance. Similarly, if your young adult goes to college, you might be responsible for the tuition, whereas they are responsible for their books and other supplies. Better yet, get your agreement in writing so that there is no confusion. Of course, feel free to revisit or revise the agreement as time progresses or the situation changes.

Tips for Young People for Conversations about Money:

*Set your own goals and values, independent of your parents, caregivers, grandparents, or other family members.

Adolescence and early adulthood is the perfect opportunity for you to develop your own identity, independent of your family, including your own financial values. This involves clarifying what is and is not important to you, which might look different from your friends and family, and that’s OK, as long as you’re clear.

*Do some research.

Figure out how much it costs, realistically, to go to college, own a car, live on your own, travel, start a business, or achieve any of your other dreams. Go online, compare costs, and don’t forget the little details. For example, in calculating the cost of owning a car, don’t forget maintenance and insurance. And on a related note, pay special attention to researching credit cards. The interest on those can add up fast!

*Find creative ways to earn money.

A traditional full-time (or even part-time) job working for a boss is not the only option anymore. Especially in light of the pandemic, the gig economy has been booming. As a few examples, you could sell crafts online, help people with technology tasks, or babysit or dogsit. Check out this opportunity for BIPOC teens and young adults to get the support of a professional mentor!

*Give the older adults in your life a chance.

They’re usually trying to be helpful, and they have more life experience than you. For example, many of you were still in preschool or elementary school when the recession of 2008 hit, or perhaps were not even born yet, whereas your parents likely have profound memories of this time that have affected their financial attitudes to this day. Some of your grandparents or great-grandparents (if they’re still alive) might even remember the Great Depression of the 1930s. These stories and other life experiences can provide much helpful wisdom to you.

*Remember that the older adults in your life are human too, and that they have their own thoughts, beliefs, and values.

Nobody’s perfect, and everyone makes mistakes. If anything, you can learn from their mistakes as well as your own mistakes.

Bridging the Gap

Communicating about money does not necessarily mean that you have to agree on the issue at hand. However, understanding where the other is coming from, and making mutually beneficial decisions, is the key. This requires actively listening to each other.

Lastly, remember that just like it is best to have ongoing discussions about sex and relationships (instead of just having “the talk”), the same principle applies to money. This process can open the doors for young people to have a healthy relationship with money for years to come. It might even improve your own relationship with money.

Molli’s first book is primarily focused on anxiety about math, it also explores the connection between anxiety about math and anxiety about money. She provides many more tips for both young people and their parents and caregivers. Find the book here! You can also follow Molli on Instagram or Facebook.

*Photo credit: roungroat on rawpixel.

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