Your children are watching how you use money

Your children’s attitude toward money is shaped by nature (what they inherit from you) and also by nurture (what they pick up along the way).  Despite the heavy influence of their peers, there is a good chance they’ll be come a carbon copy of you.  So before you try to mold them, have a go at picturing yourself as they see you. Children get an education on financial life by watching and listening to their parents and older siblings.

Financial Management must be learned.

The most basic economic concept we all deal with is that resources are scarce.  We do not have enough resources to satisfy all our wants and needs.  Therefore, trade-offs and choices must be made.

Financial management must be practiced.

Much of our well-being is controlled by our habits.  Habits are choices, but they’re different than many other choices: usually they are choices we don’t pay much attention to, because they have become habits! 

To give your children a good example, you must look at the choices you make (including habitual choices); repeat the ones you like, and change the ones that do not help you reach your goals.

Financial management includes everyone in the household.

Parents and children need to communicate their needs, wants, and goals.  Individuals may have different values and these need to be shared in the household.  Talk out your concerns, and listen to the needs of others. The group can make decisions that reflect the interests of each individual.

Financial management is not easy!

Unlike a cookbook where there is a recipe to follow, financial management is very unique to each family or household. Remember each one has values and goals that blend to create the total picture.  For financial management to work, it needs to be the family’s or household’s plan.

Susan

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Challenges with Couples and Money

In every couple, each partner comes to the table with different values. Those values represent the qualities, situations, and material things an individual cherishes most. Values are a product of your past experiences, present situation, and expectations for the future; they are shaped by your family, friends and mentors; as a result, no two people ever have identical values. 

For couples, that uniqueness creates a challenge, because each partner’s values influence how s/he spends money, makes decisions and sets goals. Whether a couple manages money separately or jointly, each partner’s financial decisions affect the other partner.  Different values can strengthen a couple by opening up different possibilities for action, but they can also create problems when they cause a couple to stop communicating effectively about money.  Trouble can appear in many ways, some of them serious: yelling, controlling, or even hurting each other and others.

Communication breakdowns often occur because the differences in their values about money lead partners to form beliefs about each other.  Examples: one partner is too tight with money; or one partner doesn’t tell the truth about spending.  Those beliefs are typically over-simplified  labels or assumptions, and are not based on a full understanding of why the other partner feels, thinks and behaves in certain ways.  Such assumptions can prevent a couple from working together to create a financial life that works for both of them.

To develop healthy financial communication with your partner, begin by discovering and understanding your own money-related values. This improves your ability to explain your financial decisions and preferences to your partner, and leads to a clearer understanding of why you and your partner think about money in such unique ways. Once you have this new insight into each other, those assumptions start to fade away, making room for real financial communication.  -Susan

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Goal Setting

As you plan your spending, you must decide what’s most important to you.  That includes defining and writing down your goals.  Goals are specific outcomes you strive and work for.  They are different than dreams or “New Year’s Resolutions.”

Your goals are based on your underlying values.  For example, if education is something you value, then your goal may be to have your children attend college. This goal may then guide your financial decision-making, leading you to begin a savings plan to provide funds when the children reach college age.

Goals can change as your interests, income, life-style, and personal circumstances change. For example, if you get laid off from your job, you will probably set aside some less-important previous goals, at least temporarily.

The first step is to identify your goals – or what you want to get done.  Some goals are short term – this week, this month, or this year.  Examples of short term goals might be:  buying enough groceries for the week; buying shoes for your children; or getting a new coat.  Some are for later – one to 3 years – such as paying off your credit card debt.  Other goals are for the future – perhaps 5 years and beyond – and might include saving for a college education for your children or buying a house. Any goal that takes five years or longer is known as a long-term goal.

To be successful, goals should be SMART:

  • Specific – This is what you plan to do.
  • Measurable – You should be able to tell if you are achieving your goal.
  • Agreed Upon – “This is something everyone in our household agrees should be done”.
  • Realistic – Goals fail if they are not realistic or achievable.
  • Timed – Goals should have beginning and ending dates.

Try your hand at writing a SMART Goal.

Susan

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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