Self-made millionaire: I’ve interviewed over 1,000 couples—avoiding this ‘horrible phrase’ helps raise kids who are good with money

Self-made millionaire: I’ve interviewed over 1,000 couples—avoiding this ‘horrible phrase’ helps raise kids who are good with money


Even before your children understand how money works, they can start picking up on your attitude and feelings about finances, and that can have a lasting impact. But avoiding talking about money with your kids altogether could be even more detrimental to their future financial success.

“Deep down, most people believe that money is a bad thing, that kids need to be shielded from [it],” Ramit Sethi, self-made millionaire and author of the new book, “Money for Couples,” tells CNBC Make It. 

“You don’t shield kids from riding a bike. You don’t shield kids from trying a tomato. So why would you shield them from something that is far more important than either of those examples?” he says.

When you talk about money with your kids, there is a “horrible phrase” Sethi says he would “ban” from households: “We can’t afford it.” Here’s why.

‘Saying no is a good thing’

Many of the individuals Sethi has spoken to on his “Money for Couples” podcast recall hearing “we can’t afford it” from their own parents when they were growing up. 

“And they really believed it,” Sethi says. “So even when they have a good job and they make good money 30 years later, they still feel scarcity around money.”

A positive relationship with money has nothing to do with how much money you actually have, Sethi says. Teaching your kids this phrase can unintentionally make them fearful of spending any money down the line, even when they are technically able to afford the thing they want.

Instead of saying you can’t afford something, Sethi suggests echoing the norms and culture you set within your family to explain your decision. You could say, “In our family, we choose to spend money on healthy food instead of popcorn with butter,” he says.

Alternatively, “not everything has to have a massive explanation,” he says. It may not satisfy a child begging for a toy at the store, but planting the seeds for your children to understand you can’t and shouldn’t spend your money on every little thing you want to impulsively buy will benefit them in the long run.

 “Saying no is a good thing,” he says. “I love saying no, and sometimes no is all you need to say.”

Help your kids engage with money

In addition to talking about money, Sethi encourages families to get their kids involved with financial tasks so they can build a positive foundation for their relationships with money when they get older. 

Let them watch you pay the bills or even click the “pay” button, he suggests. And try not to gripe out loud about how high the electric bill is or how expensive your rent is. Instead, let your kids know that this money is providing the roof over their heads and the electricity to play their video games. 

“As teens, they [can] help plan an entire family trip or help purchase a family car,” Sethi says. “That is how they start to learn about taxes and trade-offs. That’s how you equip them to be successful in the real world.”

Want to up your AI skills and be more productive? Take CNBC’s new online course How to Use AI to Be More Successful at Work. Expert instructors will teach you how to get started, practical uses, tips for effective prompt-writing, and mistakes to avoid.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.

Ramit Sethi: Avoid these 3 toxic money beliefs to build wealth



Source

Longevity doctor: ‘Every single day I try to get at least 30 to 40 grams of fiber in my diet’—here’s how
World

Longevity doctor: ‘Every single day I try to get at least 30 to 40 grams of fiber in my diet’—here’s how

Poonam Desai is an ER doctor with two decades of experience who studied and recommended daily practices for a long life to her patients well before it became her main focus.  In 2017, she officially started practicing longevity medicine, teaching patients the tools they need to structure their routines with living long and staying healthy in […]

Read More
I’ve spent 10 years studying parents of highly successful kids—5 things they do differently: ‘It’s not just hard work and grit’
World

I’ve spent 10 years studying parents of highly successful kids—5 things they do differently: ‘It’s not just hard work and grit’

I’ve always been fascinated by families whose children seem to be on some kind of unusual streak, reaching the top of their career ladders, or, even more interesting to me, blazing trails or following their passions with spectacular results. What did their parents do differently to empower them? What do researchers really know about what’s […]

Read More
Morgan Stanley upgrades this mining stock as best pick to play rare earths
World

Morgan Stanley upgrades this mining stock as best pick to play rare earths

A wheel loader operator fills a truck with ore at the MP Materials rare earth mine in Mountain Pass, California, January 30, 2020. Steve Marcus | Reuters The rare-earth miner MP Materials will enjoy growing strategic value to the U.S., as geopolitical tensions with China make the supply of critical minerals more uncertain, according to […]

Read More