Money, and how to have a healthy and proactive relationship with it, is often left out of parenting. But teaching your children how to have a healthy relationship with money is key to their wellbeing, and there are plenty of practical and heart-centred ways to support their financial health.

Money matters. There is no denying it. Money is a powerful resource and an unavoidable part of our everyday lives. It is considered one of the biggest and most consistent sources of stress in our lives, commonly affecting our emotional and physical wellbeing and creating tensions in our relationships. A 2015 Australian Psychological Society report revealed that financial issues are the top cause of stress for Australians, and have been for a considerable period of time. Yet teaching our kids how to navigate this stress and nurture their financial wellbeing is often an area of parenting that is neglected. So many of us are rushing through life, doing jobs we don’t enjoy, buying things we don’t need to impress people we don’t like, that we forget to consider what we value and what role we choose for money to have in our lives. Is it any wonder that we (and our purses) are feeling burned out? We certainly don’t want to pass this on to our children. Every day, like us, our children are going to make a multitude of choices about money. How to earn it, spend it, save it, share it and invest it. If we can help to support them to feel capable, confident and empowered in the face of these decisions, and not overwhelmed by anxiety, then we will be setting them up to have a healthy lifelong relationship with money.

What is financial wellbeing?

In a 2017 project commissioned by Financial Literacy Australia, financial wellbeing is defined as “when a person is able to meet expenses and has some money left over, is in control of their finances and feels financially secure, now and in the future.”

There is no denying that money and wellbeing are linked. Our financial lives impact both our physical and our emotional health. However, it is less to do with how much you earn and more to do with what you do with your money, and how you feel about those interactions that affect our financial wellbeing.

Financial wellbeing is not about achieving a particular bank balance. If it was that easy, all wealthy people would be free of financial anxiety and worries, and this is simply not true. We only have to look to the statistics of lottery winners to see that having more is not the whole answer.

No parent would wish for their children to be billionaires without first preparing them for the complex decisions they will need to make. Money causes stress no matter how much you have, so it is much less about an amount and more about perspective, decision-making and emotional awareness that makes for a healthy financial life.

The financial wellbeing we hope for for our children, then, is about setting them up to be capable and feel empowered about their financial situation, motivated to make their money mean something and align to their values and allow it to be a source of peace and not pain.

Supporting your kids

How can parents support their children to experience financial wellbeing?

Show your kids that managing money is a self-care practice

Like exercise and healthy eating, we need to make time for financial wellbeing. You could start your own financial self-care practice of weekly financial journaling, where you review your spending and saving goals and create practical systems to support your goals and maximise your strengths. Imagine how powerful it would be for your kids to see you consciously and peacefully dedicating time to your finances and your relationship with money. Integrating it into your weekly self-care regime is a huge opportunity for personal healing and inspiring your kids to do the same.

Cultivate financial curiosity and critical, independent thinking

Take time to reflect on your own financial experiences, challenges and strengths with your children and encourage them to enhance their self-awareness around their thoughts and actions around money, value and self-worth.

Actively research financial topics and talk about the financial decisions you are making. If your children are old enough, involve them in appropriate decision-making processes to strengthen their independence, critical thinking and financial curiosity. For example, if you are working through your household budget with the aim of saving a particular dollar value, ask them to help with the meal planning and grocery shopping to maximise the saving potential at the supermarket. To really motivate their involvement, consider sharing the savings with them.

Encourage your children to consider their own situation and what is important to them, and to lovingly evaluate their options. These experiences will help them develop the skills and confidence to compare products and possibly investment properties, loans and shares in the future.

Be conscious with your money language and conversations

Creating a family culture that encourages money conversations instead of treating them as a taboo contributes towards a foundation for financial wellbeing.

Consider you and your partner’s own boundaries in terms of what you are comfortable sharing with your children. Remember that investing your time in cultivating these non-judgemental financial conversations will pay dividends, even with your own relationship with money.

In addition to openly talking more about money, we know mindset and attitude towards money have a clear link with our financial wellbeing. Unfortunately, many of us have more self-limiting beliefs around money than empowering ones. Do “Money is the root of all evil,” “It’s just money,” “I’m not good with money” and “The rich get richer and the poor get poorer” sound familiar? If we subconsciously despise wealth, this will work against us in supporting our children to experience financial wellbeing.

These beliefs are so prevalent in parents’ vocabulary because we heard them ourselves growing up, and they were supported by the powerful messaging in movies and the media. Regardless of where these beliefs came from, though, we have a significant opportunity to stop them from being passed down to our own children.

Instead of allowing these beliefs to act as universal truths, start by challenging these associations, choose to focus on people who have positive associations with money and choose what role you would like money to play in your life. You can talk openly and honestly about the belief that you hold — self-limiting versus empowering — and work together as a family to cultivate positive money mindsets.

Support a strong saving habit through positive experiences with saving

It is important to cultivate a strong saving habit in your children to support their financial wellbeing. This will increase their potential to experience financial freedom and more life choices in the future. The most successful way to pass on a healthy saving habit is to create direct experiences with it.

For school-age children, give them a set amount of money each week for every week of the school term. As an example, each primary school kid could be given $3 per week. One dollar must be saved each week and placed in their jar and your child can choose what to do with the remaining $2. All the money they saved in their jar is doubled at the end of the term. After a couple of terms they will see the benefit of saving and can enjoy buying something in the school holidays.

Share what you value

In order to inspire our children to have a peaceful relationship with money, we need to be clear about what we value and what money success means to us. Are your current money management rituals showing that you care for yourself? Is your spending, earning, saving, sharing and investing in line with your values?

It can be helpful to consider what you want to experience most in life and rank these experiences. This can give you an opportunity to focus your financial resources and money-related goals on things that really bring joy and fulfilment to your life. Share this introspection and process with your children.

Practical, personal and peaceful financial self-care

As your children continue to learn and grow, support them to take strength from their relationship with money, and see it as another aspect of life where they can deepen their compassionate understanding of themselves. These practices can help you and your children establish a healthier relationship with money. Explore them and see what works for you.

Make it personal

Encourage your child to create their own healthy money rituals. Try extending any existing mindfulness practices to your financial life. Take note of your spending and saving choices to bring awareness to your choices, and write down any persistent money worries and tackle them together.

Talk about your own private money history with your children to build trust and demonstrate that no one’s relationship with money is perfect. Share your highs and lows and what you did to overcome challenges.

Show your kids that it is healthy to celebrate your financial wins and allow yourself to feel pride and pleasure in your own financial achievements — no matter how small. This will help you to enjoy engaging with your money more and allow your kids to face their financial life with more confidence.

Listen with compassion when your children bring up money-related topics.

Make it practical

Encourage your children to keep track of their money and how much they have so that they can make informed decisions about how to use that money.

Empower them to always save a portion of any money they receive and help them to set savings goals.

When you are trying to decide whether or not to buy something, instead of asking yourself “Can I afford this?”, check in with yourself instead: “Is this in my money plan?” If it isn’t, ask “What do I need to give up in order to buy this?”

Teach older kids about credit cards and keep rewarding their savings habit so they are never tempted to use credit cards.

Make it peaceful

Support your children in their independent decision-making and learning from their own spending choices so that they can build their practical knowledge of what money well spent means to them.

Be present and objective when witnessing your kids make comparisons between what they have with what their friends have. Encourage them to be aware of how people will make different choices about money. The most important thing is for them to make decisions that are their own.

As children get older, explore the different ways people earn, spend, save, share and invest their money and how it is important for this to be personally meaningful.

Bring a sense of adventure to your money conversations.

Create a harmonising, rather than confrontational, environment for your money conversations.

It is OK to ask for help

If you see your children struggling to create harmony with a particular aspect of their financial life, let them know you are there to help, and together you can find resources and experts to support them. A financial coach can help create a money plan and support you to stick to it. A counsellor or money mindfulness expert can help you to explore the emotional challenges that are often at play when you try heal your relationship with money, and a financial planner may assist with looking at ways to enable your finances to support your life goals.

Like all self-care practices, those centred on money can help us to reconnect with our true selves, and from this place we realise there is a deep source of energy and wisdom within us that can help to guide our decisions and increase our clarity and confidence about how we manage our money.

Remember that compassionate communication, honesty, trust and openness are the most important ingredients for a healthy relationship, no matter the subject.

Liz McLardy is a CPA, financial wellbeing practitioner and university lecturer specialising in financial education for women. For online consultations and resources visit lizmclardy.com.