Money & Soul
Financially Intelligent Parenting: Children, Money, and Values

by Eileen Gallo, Ph.D.

For several years, my husband–author of this issue's Tax & Estate Issues column–and I have been conducting workshops for financial professionals and their clients based on our book, Silver Spoon Kids: How Successful Parents Raise Responsible Children. Our new book, The Financially Intelligent Parent: 8 Steps to Raising Successful, Generous, Responsible Children examines how parents can create an internal structure of values for themselves and their children that allow them to use money in healthy ways.

Connecting money and values is something every parent can do using a variety of tools and techniques. And you, as a financial professional, can help your clients create this internal structure. Here are some concepts you might find useful.

Articulate a Money Values Vocabulary

Neurologists tell us that thinking is unconscious. While we don't remember the actual thoughts, we do remember the words that accompany our thoughts. That's why it's so important for our clients to give their kids a money values vocabulary. This means having the words to make money decisions based on values. For instance, you walk into a store, see a beautiful coat, and reflexively want to buy it, but then you say to yourself, "I'm not going to buy it because I believe in moderation, and the price of the coat isn't moderate." Kids, too, need this type of values-focused language when they're dealing with money issues.

Elisabeth Guthrie, M.D., clinical director of the Learning Diagnostic Center at Blythedale Children's Hospital in Valhalla, New York, and author of The Trouble with Perfect, observes that parents can learn a lot about the importance of teaching kids values by watching swimmers in a pool. Swimmers need to push off against the end wall of the pool in order to make the best possible turn. When it comes to values, parents need to be the wall their kids push against, and part of being the wall is giving them a money values vocabulary. When their children are trying to decide whether to spend their entire allowance on video games like their friends do, a money values vocabulary can help them resist peer group pressure. They can say to themselves, "I believe in saving at least some of my money for more important things in the future, so it doesn't make sense to spend all of it each week on these games."

Teaching kids this vocabulary isn't as difficult as it sounds. The problem is that most parents keep their values in their heads rather than articulating them consistently. Suggest to your clients that they make a conscious effort to verbalize their values related to use, management, and acquisition of money. Here are some examples of ways to articulate these values:

"I will treasure the memories of our family trip to Europe. I'm glad we spent the money to stay an extra day."
"It was really important for me to change jobs, even though I had to take a pay cut; I feel like I found my true calling."
"We had to make some sacrifices when we were younger to