Is Your Kid Headed Down the Wrong Financial Path?

Is Your Kid Headed Down the Wrong Financial Path?

4 Signs Your Kid May Be Headed Down the Wrong Financial PathI find myself withstanding tornado-force tantrums in the grocery store more times than I'd like to admit.

The cause? I refuse to buy one of those cheap, plastic toys you find hanging in front of the breakfast cereals, and I try to explain that spending a lot of money on a lot of little things doesn’t make sense.

Unbeknownst to me, by standing my ground I was actually helping set my kids on a path to fiscal security. Mary Gresham, Ph.D., a clinical and financial psychologist, says impulsivity is the gateway to a rocky relationship with money.

“Research shows that impulsivity is a trait that is definitively connected to a poor financial future,” says Dr. Gresham. “For example, if your child is given a choice between one cookie now and two cookies if he can wait an hour, the child who chooses to wait will probably have a better chance of developing positive money behaviors.”

How Are You Teaching Your Kid About Money?

Have you noticed signs of impulsivity in your own child? What do you do to curb it? What other things are you doing to teach your kid about money?

You might recognize this theory as the Marshmallow Experiment, wherein professor Walter Mischel offered groups of 4-year-olds one marshmallow and told them that if they waited 20 minutes to eat it, they'd be rewarded with a second. The kids who waited for a second marshmallow ultimately performed better in school and were generally more successful than their impulsive peers.

But how can you tell if your own kid is impulsive? There are certain telltale signs.

The Traits

Besides designing your own version of the Marshmallow Experiment (which, let's be honest, would be kind of fun), look out for scenarios similar to these to tell if your child has impulsive behaviors that could become troublesome:

  • Your kid throws a massive tantrum when you tell him he can’t have an ice cream cone before dinner.
  • When you’re playing Candy Land, she always has to go first–and win. (Experts say the need to win is also related to impulsivity.)
  • Your daughter blows $50 worth of allowance money in one shot on jewelry from Claire’s Boutique.
  • Your son interrupts you to demand your immediate attention and can’t wait even three minutes for you to finish what you were doing.
  • You’re having an important conversation with your spouse, and your child interrupts you more than once, even after being told to wait until you’re done talking.
  • You’re standing in line for something and your child attempts to cut to the front.
  • You’re asking your daughter a question and she answers you–before you’ve finished your sentence.
  • You find out that your child spent the entire month of December searching the house for his holiday gift.

What to Do

Don’t fret: Impulse control can actually be an acquired trait. Help your kids learn how to wait patiently for the big payoff with some of Dr. Gresham's suggestions:

  • Use storytelling to illustrate specific examples of being patient and getting a larger reward. For example, when my daughter told me she wanted a new bike, I countered by telling the story about when I was a kid and wanted a new bike to replace my Schwinn banana seat bike. My parents told me that if I waited until I was ready for a 10-speed, I could choose the model I wanted. So I waited, and I got a better bike than I would have if I didn't.
  • Praise your children liberally when they wait for a reward.
  • Curb your own impulse purchases, modeling the behavior you’re trying to teach.
  • Children become aware of money and its uses around the age of 6, so that’s a good time to start giving them an allowance (for more on how to do allowance right, read this).
  • Once she's saved up enough, take your child shopping and let her choose an item to purchase with her allowance without any prompting or interference from an adult. Several days later, ask her how she feels about her decision–was it a good choice, or is she disappointed or feel like she wasted her money?
  • Along with an allowance, give your kids four boxes or piggy banks (we have some great, inexpensive piggy bank options here!): one for spending, one for saving, one for investing and one for giving away.
  • Last but not at all least, talk about money at home, early and often, in an age-appropriate manner. (For help with this, check out our money milestones to help your kid reach at certain ages.)

“Financial literacy begins in the family,” Dr. Gresham points out. “When children have been taught money skills throughout their lives, they grow up feeling comfortable with talking about money and they develop positive traits.”

How do you teach your own children to be less impulsive?

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