Empower your children by fostering financial wisdom early
Subscribe to enjoy similar stories. When preparing children for life, financial literacy is often neglected, though it plays a crucial role in shaping their future success and well-being. Instilling financial knowledge and responsibilities from an early age fosters independence, confidence and resilience.
Parents, as primary influencers, have a profound impact on their children’s financial attitudes. However, it is essential to guide them without unintentionally passing down limiting money scripts — deep-seated beliefs about money that can be detrimental. Money scripts are unconscious beliefs about money, often rooted in childhood experiences and family dynamics.
Financial Psychologists Brad Klontz and Ted Klontz, in their study 'Mind Over Money,' identified four common money scripts: money avoidance, money worship, money status, and money vigilance. These scripts can significantly influence financial decisions, sometimes fostering unhealthy relationships with money. For instance, a parent who is overly frugal may instill a scarcity mindset in their child, potentially leading to financial anxiety.
Conversely, parents who equate wealth with self-worth may inadvertently encourage materialistic tendencies. Also read: Is there physical gold backing India's ETFs? Additionally, renowned psychologist Furnham found that children's money attitudes are influenced by their sources of income, such as allowances and part-time jobs. Studies indicate that children who receive regular allowances tend to develop better financial planning skills compared to those who do not.
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