I recently read a good piece on the sandwich life stage, as I like to call it.
I am currently living the dream, as are many of you. My folks live on their own now – we all help each other – and my wife and I also have two kids (a teenager and a might-as-well-be-a teenager), so reading that blog post meant something to me: those of us who are the meat in that sandwich, so to speak, have an important role to play.
If we are helping our older relatives, we have issues including basic financial literacy, budgeting, credit, health care and beyond. With our younger generations we range from teaching basic concepts to providing opportunities for experiential learning. We become counselor in some cases and educator in others, yet we might often feel unprepared.
I am going to focus first on how we make sure that the bottom half of the sandwich is eventually off making its own lunch…
Now we can spend hours discussing youth development and financial socialization; in fact, some of my colleagues and I have, if you want to get more of the background. But here are some general ideas for the literature:
- Discuss finances with your kids in a focused way; tell them about things you are doing. If you are not sure of a how or why, own up to that and find out the why together. Making this a regular thing can be helpful if you keep it productive and on their level of understanding. Studies have shown that greater frequency of these discussions on various topics is associated with greater likelihood of positive financial behaviors (budgeting, saving, etc.).
- Give your kids a chance to make choices and, over time, have some control. They may succeed or fail – better to fail with you there to help them.
- My daughter has started several businesses, from lemonade stands to slime businesses and cookies (not all together!). Some made money and most did not. Every time, she learned from it and we did not discourage. However, when she lost money, she was frustrated and had to wait until she saved enough money from chores to try again.
- A few years ago – the year before my son was going into middle school – he wanted a phone. I told him when he could pay for it and provide me with money for the monthly bill for the first year I would drive him to the store myself. Sure enough, nine months later, after chores, birthdays, etc., he had saved it up. He had made choice after choice to not spend it. He did get that phone and ever since has saved up for most of his major wants. Saving for things has become his normal pattern. He still wants everything but now understands that this may have to wait until the money is there.
- Giving them these chances to choose to save, to choose what not to spend today, is helping them prepare for the lifetime of choices they have in front of them.
- If you find you need to discuss difficult financial times with them, loss of income or a need for the family to cut back, this, too, can help them prepare for these situations. Involve them in or inform them of decisions affecting everyone. This is not about making them anxious; it is about helping them to adapt to new normals.
- Make the conversations and issues relevant to them, but not about them. Even if we spend a lot on our kids activities, those were our choices, not theirs!
- Kids are often looking to us for how to react to this information. They may not have the context to know how big of a deal something might be. Remember to try to keep calm even if you are upset yourself. Kids may ask questions, especially “why” questions … try not to become frustrated or defensive when they do so.
- Work on having simple messages for your conversations. What do you hope they learn from the talk? Try not to get too technical; even if you are comfortable with the jargon, odds are they are not! This is the time to bring the kids into the conversation, not have them confused by terms they don’t know.
If we invest some time, energy and thoughtfulness to this process, we will find that our kids have a better sense of their finances than we might have had at the same age. We might just find that the bottom half of the sandwich is, in fact, going to be fine on its own … and we may find our sandwich more palatable than we feared.