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Making Your Kids Financial Superheroes in 2022

This is the time of year where you are likely to be kicking off your New Year's resolutions to change bad habits. This could be starting to exercise, eating healthier or reading more.

Sadly 95% of New Year's resolutions fail. This is because changing habits is so hard!

It’s so important that we all help our kids form great money habits from a young age, rather than watching them try to change poor money habits when they are older.


The money habits that our kids form determines their future financial wellbeing.

The challenge is that for our kids to form great money habits, we also need to adopt the habit of talking to our kids about money on a regular basis. In this blog I have set out 4 tips to help make sure you stick with your new habit.


ONE: Use Your Initial Energy Wisely


When looking to change your habits, you have to be aware that your motivation is highest at the start. Use this energy to get things in place so that the habit is easy to maintain thereafter.

Let’s use the example of deciding to start running. If you start by going on a 20km run the first day, you’ll feel great at that moment. The downside is that in a couple of weeks you won’t feel as motivated and going on a long run will seem a daunting task.


Instead of focusing on starting with a long run, you'd be better off using that initial energy to do a set of shorter runs and looking for interesting routes, planning out a training plan and researching the equipment you need so you are all prepared for future runs. Each of these things will mean there are less things to think about in the future when you are less motivated.


In terms of helping your kids with money, use your initial energy to set up accounts for them to save and, invest money. This could be finding a make-shift piggy bank or downloading a pocket money app. You can also set up an investment account for them.


If you need any help, please check out our guide for setting up an investment account here.


ACTION: Set up money accounts for your kids now.



TWO: Don’t Make The Habit Change Too Big


Most resolutions don’t last as people set the bar too high. Whilst they have the initial energy, it’s easy to go to the gym, eat and drink less. After a while these changes start to impact on our ‘usual’ way of living and soon become unsustainable and then we give up.


Keep the changes small. The smaller the better. Small changes don’t impact your life as much so it can be sustainable. After time you can add another small change and soon you’ll see a massive impact. I feel this illustration shows this very nicely.


If you want to start running, commit to putting on your trainers each day and leaving the house. Whilst initially you may feel this won’t make as big an impact as committing to running 100km per month, you are much more likely to keep it up and, over time, you will run more and see the benefits.

For example, I was struggling to do lots of exercise. Now I commit to doing at least 2 pull-ups before I take a shower. Sometimes I do lots, sometimes I only do a couple. The key point is that I’m still doing it after 6 months and I’m a lot stronger than I was before.

In terms of teaching your kids about money, don’t think about sitting them down to learn everything there is to learn about money in one go. Teaching them about money will take time and there is no big rush. Think about breaking it down into really small pieces and repeating these over time. Even with my girls, I’ve been talking to them about money for years but I have to go back over some topics as they forget or are now a bit older and want more detail.

If you aren’t sure where to start, check out my age-by-age guide to teaching kids about money.

ACTION: Have a short conversation with your kids about money today!


THREE: Monitoring Consistency Is Key


When measuring progress, don’t focus too heavily on outcomes. Focus on consistency.


If you are thinking about running, don’t get too focused on how far you run. It’s important to think about how many runs you do (regardless how far you go).


This means on the days that you aren’t very motivated, you can take a small action and still see you are making progress. Consistency is the key to forming new habits.


So, if you have an app or note pad to track your progress, put a big green tick next to the days you do the new habit. Your goal is to have as many green ticks in a row as possible.


When it comes to kids and money, tick off when you have spoken to your kids about money each week. Again, even if it is the shortest of conversations. For example, “Do you know how much a donut costs?” (gets them thinking about the value of money) or “How much of your pocket money are you going to save?” (gets them to think about different uses of money).


If you read my blogs each week, I’ll provide you with plenty of small, teachable moments so you never have to spend much time thinking about what to say during these weekly conversations. Make sure you subscribe below.


After 52 short conversations about money over 2022, you’ll definitely notice a difference in how your kids think about money.


ACTION: Commit to having a short conversation about money at least once a week with your kids and add a tick to an app or notepad when you have done this.



FOUR: Accountability Increases Chances Of Making Habits Stick


The more people you tell about a change you want to make, the more likely you are to do it.


For example, if you tell everyone that you are going to start running, you know they are going to ask about this in the future. This provides extra motivation to keep going.


The same is true about teaching your kids about money. Tell your kids you are going to help them. They will hopefully remind you (especially if you promise to give them some pocket money each week).


Also, let your friends know you are focusing on this. This will again increase accountability. It will also help them consider if they should be doing the same. Hopefully they will and you can share stories and motivate each other.


ACTION: Tell your kids and friends that you are going to have a short money conversation each week.


Summary

If you want to help your kids become financially healthy in 2022, commit to having short money conservations on a weekly basis with them.

Use the research about habits to make sure this becomes a reality:

  1. Use Your Initial Energy Wisely - Set up money accounts (savings and investment) for your kids now.

  2. Don’t Make The Habit Change Too Big - Have a short conversation with your kids about money today!

  3. Monitoring Consistency Is Key - Commit to having a short conversation about money at least once a week with your kids and add a tick to an app or notepad when you have done this.

  4. Accountability Increases Chances Of Making Habits Stick - Tell your kids and friends that you are going to have a short money conversation each week.

If you follow these steps, I have no doubt this time next year you’ll still be talking to your kids about money and, they will be well on their way to being financial superheroes.


Thanks for reading!


Will


P.S. Whilst your energy levels are high, why not order your kids a copy of Grandpa’s Fortune Fables so they have a fun resource to learn about money? Get your copy here



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