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February 2020
Barbara Nusbaum

Kids, Values & Money: How Advisors Can Help Parents

Parents want their kids to have good values, but worry they don't know how to teach them.

Dr. Barbara Nusbaum
Clinical Psychologist, Ph.D., expert and speaker, specializing in the intersection of money, psychology and life. Dr. Nusbaum works with individuals, families and organizations on the impact of the emotional/psychological side of money.

She has appeared as an expert for The New York Times, CBS News, Forbes, The Wall Street Journal, Bloomberg, Money Magazine, and DailyWorth.

Every time we talk about money with children, we're talking about values.

That's because when we discuss money or make a money-related decision, big or small, our values are shaping it, either consciously or unconsciously. When we spend, save, donate or earn, we are telling our children, "This is important enough to put myself behind it; I am valuing this over something else."

When do our children see our values in financial decisions? Whenever we say yes or no when our child begs for a toy at the checkout line. The amount we give our teen for a night out with friends. The things we buy for ourselves that are wants and not needs. And the thousands of other buying decisions we make every year


By becoming more values-aware, parents can guide their children to make money-decisions in line with their own values, rather than the values of others. And as an advisor, you are in the position to help parents do this.

Parents want their kids to have good values, but worry they don't know how to teach them.

When I speak with parents, they want their children to have good values. Yet they are concerned, guilt-ridden and feel clueless about how to instill these values in them.

Your clients who are parents are worried about whether or not their children will:

  • Spend wisely and thoughtfully. "They spend all their money on clothes, food, music, going out, and online. I'm not an ATM!"
  • Save. "I opened a bank account for them when they were young, but I don't know how to teach them to save."
  • Not squander money. "If my child inherits the money I have, I don't want them to use it all up and not work hard themselves."
  • Share with others, not just think of themselves. "How can I help my child feel compassion and give to others, not just go through the motions?"
    Feel gratitude for what they have. "I never had this, nor do most people in the world, yet they take it for granted."
  • Work hard and earn. "I'm afraid my child doesn't have what it takes to make a real living."
  • Support themselves. "I'm afraid my children won't make a living."
  • Not feel guilty or anxious about money. "My parents made me feel guilty and anxious all the time about money. I don't want to do this to my kids."

Ultimately, parents want their children to be resilient, hard-working, responsible, and caring adults. Parents are eager to become active shapers of their children's values, and they very much see the need to do so.

Here's where you can help. In addition to giving investment advice, you can show your clients how they, as parents, can actively and consciously become their children's guides and mentors around money values.

Our culture, while focused on money non-stop, simultaneously sends the message that we should not talk about money. It is not polite. Yet this message leads to a less conscious consequence: act on money without thinking or planning, and certainly without considering values.

Here's the good part, though: Advisors are one of the few people with whom parents openly talk, think and strategize about money. Advisors, by definition, counter the message of "spend without thinking." Advisors exist to help clients talk and strategize about money in a thoughtful way.

Many clients will genuinely value your help around children's money values. This can strengthen your relationship with them, as you become a helpful resource.


Three tools to help your clients develop the thinking, tools and language for strong money values:

1. Values Awareness Conversations

By becoming aware of what our money values are, we can also make deliberate, thoughtful choices about money, rather than impulsive or haphazard ones. Values awareness empowers us to make money decisions, and raise children, in alignment with our own chosen values, rather than with the values chosen by others such as ads or peers.

Here are two ways that you, as an advisor, can help clients start thinking of money values:

Simple Values Questions

- List three things you learned from your mother, father or important caregivers about money. You can note what they intentionally and unintentionally taught you.

- Which of these values do you want to keep, and what do you want to change?

By considering these questions, your clients can think about what values they inherited from their families, and decide which to live by with their children and which ones they would like to change.

Money Values List

One of the main difficulties in discussing money values with children is the lack of language we have at our disposal for doing so. Most of us grew up with parents never talking constructively about money, let alone values and money. We have no role models or language for this.

A good resource to help you and your clients have conversations about money is Judith Stern Peck's book Money and Meaning: New Ways to Have Conversations about Money with Your Clients — A Guide for Therapists, Coaches, and Other Professionals (2008).1 Peck identifies 14 family money values worth talking about, ranging from personal to public to recreational.

By talking about those values, families can learn:

  1. what money values are;
  2. their top three core values (those that are most important to them in all situations);
  3. the top 3 that are important to them in a particular money decision or money-related situation.


2. Needs v. Wants: The Simple Question that Goes a Long Way

Offering parents the simple question — "Is it a need or a want?" — goes a long way in helping them discuss money values with their children. A need is what is necessary to live; everything else is a want. Parents can then explain that we use money to cover needs first, and then consider wants.

And here's where things get really interesting, with each family member wrestling with what they think is a need or a want. Of course needs are air, water, food, shelter. But is education a need or want? What about books, toothpaste, or more than one set of clothes? These are just a few examples of what comes up in discussions. Agreeing on a definitive list is not what's important. Weighing needs vs. wants is the point, because it gets everyone thinking and talking about their money values.

This question can be used with very young children all the way through adults, and can be an effective, thought-provoking question when kids ask to buy things. "Is this a need or a want?"


3. Save, Spend, Share: An allowance is a process, not a giveaway

Allowance is one of the most valuable tools in teaching kids money values. While this is a much larger topic (to be expanded upon in a future article), here is a summary.

We all know it's difficult to talk about money and values with kids; they glaze over at a "lecture" by parents. Echoes of "you should be more grateful" and "I never had this when I was your age" reverberate in the room, and your child can shut down.

Yet allowance, when used effectively, makes talking about money values easier. Nathan Dungan, President of Save Share Spend®, an organization committed to helping individuals and families align their values with their financial decisions, describes allowance as a way for parents and children to have money-values conversations 52 times a year, or every time you give an allowance.

A quick overview. Allowance is an active process, not a weekly give away. Parents give enough money for a child to spend on needs and wants, save and share. Allowance = Save, Spend, Share. Parents and kids sit down to figure out what a child's needs are, and which one's kids will be responsible for covering. Give your child enough to cover those needs and some wants. And give a bit more so your child can save for a long-term goal, and share (donate) with a cause they feel particularly moved by. As a guideline, about 70-80% of allowance should go to spend, 10% to save, and 10% to share. Even if you might give more than you normally would, they will have to manage it, and will learn how to manage money at the same time.

Allowances can start as young as 6 or 7. How allowances are handled changes as your child gets older, but the basic framework of the save-spend-share framework holds. It teaches your children to make money decisions with thought and values, and to value saving and helping others, not just themselves.


A final thought:

Advisors and parents don't need to worry about getting it just right. All conversations linking money and values are important. So my advice is to start talking—don't leave the conversation to others, like peers or our consumeristic culture.

It's too important.


1Note, I am not affiliated with Ms. Peck, or her publishing company, and I will not receive any compensation for mentioning her book. It's just a good resource.

The views and opinions expressed herein are those of the author, who is not affiliated with Hartford Funds. The information contained herein should not be construed as investment advice or a recommendation of any product or service nor should it be relied upon to, replace the advice of an investor's own professional legal, tax and financial advisors. Hartford Funds Distributors, LLC.

Hartford Funds is not responsible for, and does not validate, any information, opinions, assertions, or statements expressed within these articles, or the identity or credentials of the individuals communicating through the site. Some of the articles may contain links to information created and maintained by other, unaffiliated organizations and individuals. Hartford Funds does not control, cannot guarantee, and is not responsible for the completeness, accuracy, timeliness, or the continued availability or existence of this outside information or the information presented herein. This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.