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Warning: Economic anxiety will sabotage your kids' financial future

When it comes to teaching kids about money, there is one phrase which should never pass your lips.

Compilation image of Nicole cuddling her kid with an image of Australian dollar notes to represent economic anxiety
Our kids are already suffering from eco-anxiety, don't give them economic anxiety too. (Source: Supplied/Getty)

The current cost-of-living crisis means it can be hard to make ends meet, putting your finances under stress. But your bank balance isn’t the only thing in danger. Did you know that the way you talk about your financial situation could set your kids up for success, or even sabotage their financial future?

Here’s the problem.

Most of us learnt about money through experiences, some painful and others expensive.

Read more from Nicole Pedersen-McKinnon:

So it’s tremendous news that ‘money smarts’ is now embedded in the Australian Curriculum, with anecdotes, exercises and units designed to help kids create good spending-and-saving habits.

But as welcome as this is, ultimate responsibility for your children’s attitude to money is down to you, and tighter times make us all feel worried and our solvency which has significant implications for our psychological well-being.

But convey this to your kids and you could end up sabotaging their solvency.

The worry affecting our little ones

Children, especially upper primary school children, are encoding and disseminating a huge amount of intel about the world.

They are being taught about history, war and politics, ‘schooled’ on the environment, our plastics problem and the dangers of rising sea levels, and they are living a reality of financial stress at home.

And this financial stress can manifest as anxiety, particularly for kids aged eight to 12.

Eco-anxiety, for instance, is now a documented condition among our kids and economic anxiety is now a risk too.

Feeling helpless creates feelings of discomfort all the way through to distress.

What parents should do under stress

It’s what you say about your household’s financial situation that will make all the difference to your kids.

You don’t need to hide the pressure you are under – it’s real and valid.

Taking back control is key.

Even if there is minimal you can do to improve your money situation until rates go down (hopefully they will at least stop going up soon), don’t worry your small people.

Because it’s important they feel secure and protected.

Instead, feeling empowered and like they have influence over their finances will set them up to strive for precious life goals later.

The four little words that can ruin your kids financial future

Spending and shopping are natural serotonin boosters. They activate pleasure sensors in the brain which is why it can be so difficult to stop.

I refer you to the well-known book and movie series Confessions of a Shopaholic.

But, whatever your personal money mode, there is one phrase that you should never utter to your kids.

More precisely, there is a phrase that you need to vigilantly follow up with deliberately responsible money messaging… and then model it too.

Even if you fake it so THEY can (in future) make it.

That phrase is: “We don’t have the money… but…”

You put your progeny’s future prosperity in peril if you, for instance, conclude this sentence with one of these three ideas:

“We don’t have the money… but let’s do it anyway.”

“We don’t have the money… but we deserve it.”

“We don’t have the money… but we need a little pick me up.”

These all speak of destructive money behaviour – giving in to psychological rather than sensible decision-making – and spending more than you earn.

That’s the opposite of what is needed for economic mastery.

So what should you say instead?

“We don’t have the money… so we are going to save and wait.”

Or variations thereof.

Really, “so” is the all-important word.

So straightforward. So success-driving.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at Follow Nicole on Facebook, Twitter and Instagram.

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