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  • Financial Literacy
    financial or emotional later But there are some words that should never leave our mouths What and how you communicate to a child about money determines not just if he s fiscally responsible but Filed Under Children and Money Financial Literacy Modeling Values Talking about Money Tagged With allowance budget children finances money money messages responsible values work ethic The Psychological Education Of An Estate Planner In her column this month my wife Eileen introduces a three dimensional model of money relationships This model examines our relationship with money in terms of acquisition use and management For the last two years I have been using Eileen s model in my day to day estate planning practice as a means of helping clients select Filed Under Financial Literacy Financial Reflection Modeling Values Talking about Money Tagged With beneficiaries estate finances income loan money money management tax wealth Understanding Your Relationship With Money In my last column I talked about my two year 1995 97 study of sudden wealth An incidental side effect of that study was the development of a three dimensional model of money relationships that is the subject of this column As part of my doctoral dissertation I reviewed the psychological literature dealing with money Prior Filed Under Financial Literacy Financial Reflection Modeling Values Talking about Money Tagged With acquisition bills finances money money management values The Banks Want Your Kids The Wall Street Journal recently ran a story about banks and other financial institutions that are starting to court young savers In the past it has been very difficult to find banks that would open checking accounts for 13 15 year olds which is a great time for them to learn how to balance a check book Among Filed Under Children and Money Financial Literacy Tagged With children

    Original URL path: http://www.galloconsulting.com/Financially-Intelligent-Parenting/category/financial-literacy/page/2/ (2016-04-28)
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  • Getting Your Money Story Straight – Part IV
    abandon black and white thinking in which I m willing to listen to you but I m right and you re wrong Remember that the question isn t who s right and who s wrong it s how the basic money messages you are jointly creating are going to affect the emotional well being of your child Black and white thinking gets in the way of the give and take necessary for good compromises Try to understand your spouse s position and respond constructively with the best interests of your child in mind Responding to your husband s proposals by telling him that he is as irresponsible with money as his mother does not make for good compromises Watch your body language Rolling your eyes or sighing loudly suggests that your spouse s position is worthless Even after you both agree on the three basic money messages your childhood values will still have a powerful influence on your behaviors making conflict possible Once again compromise comes in Your spouse wants to give your daughter a car on her 16th birthday You are opposed When the two of you disagree over a money issue you need to ask yourselves whether the way you are looking at the issue is based on fear or love You may fear that buying your teenage daughter a car on her 16th birthday will spoil her forever Your spouse may fear that the neighbors will think you are tightwads if you don t give her the car Fear makes it difficult to compromise Looking at the issue based on love means asking what is in the best interests of your daughter It s much easier to reach an agreement when you approach the issue with your child s best interests in mind We also recommend that couples try to share financial responsibilities Divide financial chores based on your talents and interests One spouse may be better at dealing with mistakes on bills like not getting credit for returned merchandise while the other might be better at securing bids to have the bathroom painted The spouse who makes more money than the other should not receive the lion s share of responsibility Just because you make more money than your partner doesn t mean you re a better money manager In fact we know families in which the breadwinners are so focused on work that they lack the time and energy for money management responsibilities Sharing these responsibilities sends kids the message that money management is something both Mom and Dad and more specifically women and men are equally capable of handling Finally don t be cavalier or unthinking about your money related decisions and actions We realize that you can t be hyper aware of every money decision you can t stop and analyze each request your child makes for a toy and how your answer dovetails with your values but you can regularly evaluate if your money words and deeds are consistent and clear Specifically

    Original URL path: http://www.galloconsulting.com/Financially-Intelligent-Parenting/financial-reflection/getting-your-money-story-straight-part-iv/ (2016-04-28)
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  • Getting Your Money Story Straight – Part III
    moments and use them to convey your values Tell your child it s overpriced or I don t want to buy it because it s poorly made or the company that makes it exploits child labor or you have enough action figures I don t want to buy you any more If your child is interested engage him in a discussion of the why behind your statement Depending on his age you can talk about everything from diminishing natural resources to an overly materialistic society You can relate your own experiences growing up and how it shaped your beliefs about morality quality and the like The key though is to treat money as a subject worthy of discussion During an interview on National Public Radio the moderator Larry Mantle told us a story of growing up in the 60s Larry saw a James Bond briefcase advertised on TV and couldn t live without one His father explained that he wasn t going to buy him one but he didn t stop there Instead they drove to a local toy store where Larry had the opportunity to inspect the briefcase and discover that it was in his words overpriced junk that looked nothing like the one on TV To this day he values the lesson he learned by having no accompanied by an explanation Money as a source of anxiety and arguments You ll find that we keep returning to the topic of money fights in this book but there s a good reason Money arguments are a recurring theme in just about every marriage and certainly among many divorced parents They re tricky to prevent though because they often are a reflexive response of your money personality Therefore we want to look at these fights from a number of angles Here let s examine how they become part of the money story parents tell kids and the accompanying anxiety they often produce in children At The Gallo Institute we have worked with some of the wealthiest families in America as well as many middle class couples and we can tell you that money fights are not a function of how much money you have One couple might fight over whether their third vacation of the year should be Spain or Japan while another couple might fight over whether they can even afford to take a week off for a vacation The list of money topics couples fight over could fill this book here is a much shorter version of the list How much to spend on the purchase of a house The obsessive compulsiveness of one person regarding finances Risky investment decisions What you feel is the outlandish cost of a child s toy Public or private education state college versus a private one Amount of money spent on clothes Whether one spouse should be a stay at home parent and give up his her job The decision to look for a better paying job and leave a lower paying

    Original URL path: http://www.galloconsulting.com/Financially-Intelligent-Parenting/financial-reflection/getting-your-money-story-straight-part-iii/ (2016-04-28)
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  • saving
    we ve looked at money stories and money personalities Now we want to examine two negative money messages that many of us send our children money as taboo and money as cause of argument Money as a taboo topic Psychologists and financial writers love Filed Under Children and Money Financial Reflection Modeling Values Money Stories Talking about Money Tagged With children credit cards finances money money management money messages responsible saving values Fill out the form below to begin receiving our Monthly Newsletter Finacial Literacy Tips and more right to your inbox About Us Helping families cope psychologically is essential for developing the refined financial intelligence most clients are seeking today Eileen Gallo Ph D Eileen Gallo is a licensed psychotherapist in private practice in Los Angeles where she assists individuals and families with the psychological and Read More Categories Charity Children and Money Chores Financial Literacy Financial Reflection Modeling Values Money Stories Talking about Money Uncategorized Archives June 2011 October 2010 Recent Articles The Seven Beliefs of Financially Intelligent Parents Part II The Seven Beliefs of Financially Intelligent Parents Part I Teachable Times Being Alert for the Moment When Money Messages Can Be Sent Spending Time and Money Consistent

    Original URL path: http://www.galloconsulting.com/Financially-Intelligent-Parenting/tag/saving/ (2016-04-28)
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  • Getting Your Money Story Straight – Part II
    of us are in the middle being reasonably careful and conscious of our use of money MANAGEMENT This is how you manage money It includes everything from paying bills to managing your savings As savings increase some of these functions are often delegated to professional advisors On one end you have the obsessive compulsive who micro manages down to the last dime At the other end you have the chaotic individual who is extremely disorganized or procrastinates in paying bills to such an extent that his or her credit is often ruined The dividing lines between secure and insecure relationships are fuzzy The difference between secure and insecure is a combination of emotion are you content or anxious about the relationship and finance will the relationship get you into money trouble Because the difference between secure and insecure is a complex gray area we may not be aware that our relationships with money are creating problems for our children If however we focus on our behaviors in the areas of acquisition use and management we can gain the type of information that can help us control our negative behaviors Therefore try the following Determine if you acquire use and manage money in ways that place you at the ends of the ruler To make an accurate determination don t rely only on your own assessment Ask your spouse or anyone else close to you whether your behaviors fall in the normal or abnormal range Use your money story to help make this determination If you conclude you re in the abnormal range in any area try to list specific things you ve said or done that may have communicated a negative money message to your kids For instance if you determine you are a compulsive overspender you might list Buying four model airplanes for my nine year old when we were at the store and he asked for just one Make a conscious effort to manage these types of behaviors Your goal should not be to eliminate them entirely that s not necessary A more realistic goal is to reduce their frequency One bout of overspending a year isn t going to hurt your child doing it 20 times might Have your spouse go through this same exercise and then compare results If you help each other manage your respective behaviors if you can wave a yellow flag when your spouse falls into old counterproductive money routines when your kids are around you can lessen the likelihood that you re both telling your kids the wrong stories It also will make you aware if you re telling your child one story save every penny and your spouse is telling another life is short so buy what you want Remember though correcting your spouse requires a certain amount of tact and diplomacy Don t turn your correction into a criticism and spark a money fight Understanding your money personality helps your kids relate to money in each of these dimensions in

    Original URL path: http://www.galloconsulting.com/Financially-Intelligent-Parenting/financial-reflection/getting-your-money-story-straight-part-ii/ (2016-04-28)
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  • Getting Your Money Story Straight – Part I
    the media As we ve already discussed the media s primary message today is that consumption is good buying more will make people happy and the one who dies with the most toys wins The second factor is how we organize this information in our mind Each of us has our way of processing and organizing these money messages and behaviors Even siblings in the same household are likely to organize their views and their relationships with money very differently Because we receive so much of our money story from our families as we are growing up we tend either to duplicate their money attitudes as adults or we rebel and exhibit exactly the opposite money behaviors Because opposites really do attract it s not uncommon for parents to have very different money stories and money styles This usually isn t an issue early on and we ve found that many people are married for a year or more or until they have children before they realize their money habits are diametrically opposed or they discover that their spouses have idiosyncratic habits like only paying bills on the second day of the month or a willingness to spend a lot of money on big ticket items like cars and houses but an unwillingness to spend much on things like groceries and clothes Even then most couples are not fully aware of each other s stories and the way those stories evolved This is why we believe it s imperative to have a full disclosure money discussion Use the written stories to explore each of your money relationships and how they translate into behaviors If your spouse grew up in a household where his parents were stingy with money is his extravagance an act of rebellion or a way of overcompensating If you grew up in a family in which no one ever talked about money do you have a hard time talking to your kids about money issues Money stories can be as strange and idiosyncratic as people themselves and you should be willing to tell your story warts and all even if you re worried your spouse will find it odd Paul and Debbie were married for eight years when an incident with a living room couch triggered the storytelling The living room couch was the bane of Debbie s existence It was a hand me down from her parents that Paul and Debbie were given when they were married It had been re covered and sagged badly in the middle At dinner one evening Debbie announced that since the local furniture store was having a sale the time had come to replace the living room couch But Paul protested we can t just go buy a new couch what would we do with the old one Paul s money story involved an attachment to anything that still functioned he could not conceive of giving away something old if it still worked Ideally couples will share their money stories

    Original URL path: http://www.galloconsulting.com/Financially-Intelligent-Parenting/financial-reflection/getting-your-money-story-straight-part-i/ (2016-04-28)
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  • Financial Reflection – Part III
    that Money Diary again If you confine its use to major purchases though it should be an effective tool You might also print up some Money Diary forms for your kids to use by themselves Though they probably won t use it religiously they might fill out the form on occasion when they re facing a difficult spending choice As great as it is when kids engage in reflective dialogues with parents they need to be able to have reflective dialogues with themselves Finally we d like to leave you with three additional ways you can encourage reflection when you talk to your kids about money issues Make a conscious and concerted effort to listen This may seem obvious but when your eight year old goes off on a seemingly endless monologue about the price of one type of baseball trading card versus another you may find yourself zoning out The human brain is capable of processing verbal information at a rate of 300 to 500 words a minute but children tend to speak at no more than 200 250 words a minute Younger children speak even slower If your child is groping for the right word or slowly trying to put his feelings into words you may start thinking about some problem from work instead of really listening or you may interrupt him and finish his thought for him In these instances you re sending your child a message that what he s saying isn t that important As a result he may not attach enough importance to it so that he makes the effort to reflect When you re really listening on the other hand you re motivating him to take his words and his decisions seriously Translate your child s words into their underlying meaning Children can t always articulate their real money issues and the choices with which they re struggling Even teenagers may be unable or unwilling to present their dilemmas clearly As a result you may miss a great opportunity to engage in a reflective dialogue you falsely assume he s bringing up a trivial matter or one that doesn t require a conversation Therefore take a moment to consider what your child might really be talking about when he raises a money issue For instance five year old Grant came home from pre school and asked Mommy do we have 1 million dollars Fortunately Grant s mother was savvy about reflective dialogues and instead of answering yes or no asked a question of her own Why are you asking It turned out that one of Grant s classmates had seen some homeless people at the local park and that a fellow five year old had asserted that one needed 1 million dollars to avoid becoming homeless When it came to financial issues Grant didn t know the difference between a million dollars and his elbow He was really asking to be reassured that he was safe and wouldn t have to live on

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  • Financial Reflection – Part II
    thinking about loyalty helps make a good purchasing choice He also found out that if you set out to purchase something you don t have to purchase it from the first seller you encounter Instead you should consider options such as price quality or in this case your relationship with different sellers You may find yourself frustrated in attempting to put this money behavior into practice especially with adolescents Convincing them that it s a good idea to stop ponder and re ponder a decision is difficult especially if you re putting this particular behavior into effect later rather than earlier in your child s life If you re encountering difficulty try waiting until the consequences of a bad purchase really sink in before initiating a reflective dialogue When our youngest son was 14 we gave him a clothing allowance He was overjoyed at the freedom he suddenly had and announced that the first thing he was going to buy was a long black wool overcoat he had been admiring We gently reminded him that fall and winter temperatures were mild in Southern California and that spring and summer temperatures averaged in the eighties and nineties Perhaps we suggested it wasn t a good idea to spend 50 of his clothing budget for the semester on an overcoat Our son was unmoved and soon became the proud owner of the overcoat he always wanted During that winter it was cold enough for him to wear the coat twice We avoided the temptation to lecture him about wasting his money and the importance of impulse control Instead we waited until the coat had hung in the closet for several months and only then asked him what he thought about his decision to buy the overcoat He contemplated our question and responded that he really liked the coat but he guessed that it had taught him to think longer before spending money It was nice to have the coat he explained but he couldn t wear it very often and he didn t have enough money left over to buy some of the clothes he now wished he had purchased instead As parents we often jump the gun and lecture our children about their impulsive behaviors rather than biding our time and waiting until the consequences of these behaviors dawn on them Lecturing kids about how they are spending their money is a fruitless exercise they may appear to be listening but their brain is in sleep mode Reflective dialogue however usually gets through to them By asking questions at appropriate times we help them reflect on their past money behaviors They become actively involved in thinking about the consequences of that behavior I spent too much on the overcoat and didn t have enough to buy other clothes I wanted later during the semester as well as the alternatives If enough time passes and they move past their initial defensiveness they usually tell themselves things like I could have bought a

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