You’ve presented the data, relayed your own financial story, woes and wins. You explain you really don’t want them to make the mistakes you did, or you want them to learn from all your excellent decisions so that they can enjoy the same rewards… dammit, you even got those lovely people at TCFP to speak to them … yet they just aren’t interested. They don’t see the value in putting money aside for a rainy day or paying into a pension and seem to glaze over when compound interest is brought up! (I know! How could they?)
The fact is – unless this conversation began when they were very young and they’ve personally experienced the joy of saving their own money for the eventual reward and been involved every step of the way, from earning to spending, time and time again – we are up against biology, I’m afraid.
The part of the brain that fully understands cause and effect does not fully develop until we reach 25. No amount of telling, warning or incentivising will allow that connection to be made. We don’t effectively process and learn from words and data, we process experience.
It’s never too late (or too early) to help them understand how money works. Talk to them about the household finances, matter-of-factly – we don’t want to involve emotion as that can lead to all sorts of anxieties around balancing the books – just go through what comes in, where it goes, how you budget for it. So many of the young people I have spoken to on this journey genuinely had no idea how any of it worked, how the house they lived in was paid for, what it cost to run it, how quickly money disappears, despite the monthly income looking quite impressive to their teenage eyes.
Here are a couple of things that have worked well to nudge that cause/effect neural pathway along…
Firstly, keeping it real. Yes, we have already explained income and outgoings but, remember, we don’t learn from words, we learn from feeling and doing. So, what do we want them to know? That they will earn money, people will fight and make outlandish claims to get their money, they only get to spend each pound once and with every spending choice comes an opportunity cost – they are always giving up something by choosing another thing; that includes time, quality of life, other interests and other opportunities.
So how do we make it real? Housework, of course! A home is like a business, it requires lots of jobs to keep it running and people to do those jobs, therefore household tasks aren’t a bore you have to nag them into – they are an opportunity for them to earn an independent wage. List the daily tasks and their reward (not to include things that are just expected like making their own beds and putting their own dishes in the sink). Whoever gets to the job first earns the reward … including mum and dad! I’ve funded my last two haircuts through doing the laundry!
Second strategy – listen, listen, listen, then listen some more, don’t teach. When we teach, we assume that others have the same idea of success and happiness as we do; when we tout that as the ideal, we inadvertently tell them we don’t value or respect what they want to achieve. You can see how that shuts down the conversation before it starts.
Ask them, where do they want to live? How do they want to spend their days? You will get an awful lot of ‘I don’t knows’ until 1) they trust that you are genuinely interested, and 2) they’ve been asked the question so often it has woken up that part of the brain that knows the answer. Don’t forget, this is a generation that barely gets asked their opinion anymore, it can take a while for them to know what it is.
You may not agree with their current dreams and ideals but, considering that all most parents ever say they want for their children is ‘for them to be happy’, this is your chance to help them achieve their happy while helping them understand their own role in their future outcomes.
Boring But Effective | Truthful, Helpful, Kind
advice@townclosefp.co.uk