Financial Intelligence and Kids: How they learn anything is how they learn everything.

Teaching children to grow into financially responsible adults has proven to be quite a challenge for most parents. You either don't know how to talk to your kids about money, you haven't a clue what to say if you could or you don't realize you're laying down the foundation for their financial education whether you say anything or not.

You see, if your kids are like most kids, they want stuff. And if you are like most parents, you'd like to be able to give them that stuff. This is as expected in America.

But here's the catch. Simply giving your child all of the things he wants doesn't support his progress toward self-reliance doesn't build up an internal sense of motivation and certainly doesn't help develop a strong work ethic. Being Walmart for your kids unending desires won't lend itself to them developing a strong belief that they can actually get whatever they want in life, if they work for it.

If you look at the opposite end of the spectrum, withholding everything the child wants and even perhaps making him work for some of the things he needs, can force a child to be too responsible too soon and this scenario poses issues of its own.

A child in this position sometimes loses touch with their childhood, being forced on many levels to become responsible sooner than perhaps necessary. Although there is certainly nothing wrong with being responsible, there is something to be said for letting children be children. After all, most adults would readily exchange a few of their days toiling in the workplace for a few care-free days in the woods catching frogs or more likely, running around the mall with friends or playing the latest video game on the neighbor's television.

This doesn't necessarily include the child, who at seven years old, decides to start a business and is making $1000 a month by the time he or she is ten! This child is internally motivated by some unseen force and should be encouraged. For children who aren't intrinsically motivated early in life, forcing them into too much responsibility often adds to the other stresses of growing up and can actually cause very negative ramifications in terms of a child's behavior and choices in life while they are young.

The balance between these two, combined with the intention of giving your children a solid financial education, is what helps create an adult with a sound sense of financial responsibility. The question is…how DO you lay down that solid financial education in those kids of yours in the way best possible for you and the child?

Before we look at how to teach your children about money, we must examine how they learn in the first place. This is because how they learn anything is how they learn everything, so it only makes sense to teach them about money using their own personal learning style.

Have you ever noticed that you have to 'see' a map in order to understand the directions someone is giving you? Or that you have to see a picture in order to understand how something goes together or how one thing is related to another? Do you have to be in the front during the class in order to see what the teacher is drawing on the board? Do you use words like see, look, notice and watch? Your primary learning style is what is referred to as Visual.

On the other hand, do you have to close your eyes in order to 'hear' what is being said because the visual interferes with your ability to take in and process new information? Do you often sit in the middle or in back at a seminar because you only need to listen to get the information? Do you use words like listen and hear? Your primary learning style is called Auditory.

And finally, do you have to 'do' a thing in order to learn it; whether it's a physical skill, a mental task or an emotional lesson? Do you often stop and check in with your body to see how something feels before you decide whether or not you have learned it or believe it in the first place? Do you use words like feel, gut, body and sense? Then your primary learning style is called Kinesthetic; you learn best through a combination of movement and emotion related to the subject matter.

Most people learn through a combination of two of the learning styles and some people learn through all three, but most have one primary style that they rely on more than the other two. One important note, however, to pay heed to, is that less than 20% of our population are primarily auditory learners. The conundrum here is that most of our schools use primarily auditory forms of instruction.

Let's apply these three learning styles to teaching your children how money works. If there are three ways for them to learn, they are no doubt learning about money from you in three ways.

This means that they are watching what you do with money, listening to what you say about money and experiencing in their bodies the situations you are experiencing with money.

It is not a new idea that human beings learn best by example. Albert Einstein once said, "Setting an example is not the main means of influencing another; it is the only means." He was right on the money, pun intended. Before you can teach your child anything about money, you must examine the example that you, as the parent or guardian, are setting for him or her.

This means that before you set any type of allowance in place, start savings and checking accounts for your child, encourage them to start a little business or learn how to trade the latest this and that with friends to learn the value of different things, you must examine your own financial life to see what they are learning directly from you.

This is the most critical, and often painful, part of teaching your child about money. You see, allowances are great, and wanting to empower your children financially is the greatest gift you can gift any child, however, if your own financial life is a mess, your children aren't going to learn the lessons of proper money management and wealth creation.

If you are living on credit cards, constantly telling other how much you despise money and wish you didn't have to deal with it, complaining about the cost of living or that you'll never be able to own a home, what is your child learning? He or she is learning that life is hard and that getting is money is painful. But it doesn't have to be this way.

If you want your kids grow up financially savvy, you must first commit to becoming financially savvy yourself, if you aren't already. Most of us learned a long time ago that the 'do as I say, not as I do' form of parenting doesn't work. Teaching our children how to make, manage and multiply their money wisely falls into that category, just like everything else we want to teach them.

So it's up to you. Before you attempt to teach your child about saving, investing in assets, using credit wisely, avoiding bad debt and donating to others, you need to be doing these things yourself. Once you have this down, you are ready to begin instilling in your child the one life skill they absolutely must learn in order to live on their own successfully…how to handle and grow their money wisely and responsibly.

Now, if you're ready to take that first step, get out your magnifying glass and examine your financial life in detail. Ask yourself what you want your child to learn about money and then model that behavior and put your child in the presence of others modeling that behavior. Before long, you'll have children who are doing the things with their money that financially responsible people do with their money and they'll be doing it because you are. Good job!

Author's Bio: 

Elisabeth Donati is the owner of Creative Wealth Intl., LLC. She is the creator of Camp Millionaire, a unique and effective financial intelligence program for kids and teens and Creative Wealth for Women, a workshop designed with the special financial needs of women in mind. Elisabeth is an expert in teaching the basic financial principles people need in a way that is engaging, empowering and fun. For more information, visit

She is the author of the only financial parenting book parents need, The Ultimate Allowance, available at

Please feel free to email her at: or give her a call at 805-957-1024.