You want the best for your children. So what can you do to ensure they become adults who are happy and prosperous, rather than ones who are stressed out, living paycheck to paycheck?
Teaching them about saving, debt, and compound interest is a good start; but instilling them with the right attitudes and mindsets is even more important. That’s because psychological failings underpin most of our money failures. So, if you want to do it right and train up a money mastermind, practice these four habits.
Stress an Attitude of Gratitude
Who hasn’t fallen into the trap of wanting more? It’s human nature. We’re constantly seeking more clothes, better electronics, a larger house or a newer car. But sometimes, if you just sit back, you realize that you have more than enough.
Appreciating all the blessings that adorn our lives is the antidote to reckless financial spending. Appreciation turns your attention away from what you don’t have and toward the abundance that’s already present in your life.
Stress appreciation as a part of your child’s life. I, for instance, am a believer in encouraging my children to list three things they’re thankful for before they go to bed. It could something as simple as their beloved stuffed animal Fluffles or the favorite meal they ate for dinner. Creating a lifelong habit of gratitude will help insulate your children from the effects of our consumer driven society.
Foster an Appropriate Sense of Self-worth
Too many people seek validation through their material possessions. The late model car sitting in the driveway serves as a badge of success. The large house on the corner lot shows that you’ve “arrived”. The clothes you wear belay your importance. But, in the process we sacrifice financial freedom for the momentary validation our possessions provide. This is a curse that should never be re-visited upon our children.
I plan to encourage my children to derive their self-worth from things other than their material possessions. Being kind, empathetic, generous, and Christ-like will be vitally more important to them than the type of car they drive or designer name tag they sport.
Help Them Develop Self-Discipline
In the 1960s, psychologist Walter Mischel conducted the Marshmallow Test in which four year olds were placed in front of a marshmallow. They could eat the treat or wait fifteen minutes and receive an additional marshmallow when the researcher returned to the room. Many children ate their marshmallow immediately. Others held out for as long as they could before succumbing to temptation. But some waited the required fifteen minutes and received their additional marshmallow.
Decades later it was found that the children who had successfully delayed gratification by waiting the full fifteen minutes to receive a second marshmallow were also more successful later in life.
Many of our financial problems center over our battle to delay immediate gratification for greater rewards in the future. We’re tempted to purchase that beautiful handbag with our high interest store credit card, even though waiting until we’ve saved up for our purchase is always the smarter choice. Those that approach their finances with a higher level of self-discipline will always be more successful.
You can foster the self-discipline muscles in your child. It may be as simple as never giving in to your child’s demands for their favorite toy on the spot. Instead, make them save their allowance to purchase the object of their desire. Research also concludes that games with inherent rules help build the self-discipline muscle as does encouraging your children to engage in activities that nurture self-discipline like sports, playing an instrument, or doing assigned chores.
Foster the Right Mindset
Carol Dweck is author of Mindset, one of the most groundbreaking books on learning and achievement. Her work describes two types of mindsets, the fixed mindset and the growth mindset.
The fixed mindset is one in which we believe our talents and abilities are fixed or inherent. “He’s so smart” or “she’s a natural” are expressions conveying such a mindset. The problem with the fixed mindset is that we become trapped by our labels. A smart child becomes afraid of intellectual challenges because any failure might challenge their label of being intelligent, and thus affect their self worth.
The growth mindset, on the other hand, believes that any ability can be learned and fostered with enough hard work. A child is not “naturally intelligent” but, with enough effort and practice, can become brilliant at math or science. The beauty of the growth mindset is that it encourages work and embraces challenges. More importantly, the growth mindset sees failure as a natural stepping stone to success rather than an attack on their self worth.
By encouraging a growth mindset in your children you allow them to view success in any area of life as a possibility, as long as they are willing to work hard enough. In this way no high paying career field or entrepreneurial challenge appears unachievable .
BMWK, what mental habits or mindsets are you fostering in your children?