Guest Post: The Other Side of the Coin

"She hit me!," said one of my three daughters. Then another daughter yelled, "She called me _____!" I am sure this never happens in your home, but our daughters regularly remind my wife and I that debate always includes different sides. Just as debate has two sides, the way we approach our finances has two sides as well. The two sides of our financial coin are: 1) the short term, or the present, and 2) the long term, or the future.

I recently viewed a video by Dr. Caroline Leaf concerning our brain and new understanding researchers are gaining into its inner workings. Dr. Leaf has been studying the brain for the last twenty-five years and has some incredible insights. In the video, she explains that the two sides of our brain actually work differently than previously thought. Instead of one side being creative and the other side containing logic, the two sides function in the following way: One half of our brain thinks from the small picture to the big picture; the other half thinks from the big picture to the small picture. Stated another way, one half of our brain thinks from the present to the future; the other half thinks from the future to the present.

So what does our brain function have to do with money? Everything! Do you know someone who lives only for today and does not plan for the future? How about the person who lives for the future to the detriment of their life, or health, today? These perspectives are both unbalanced, especially when applied to our finances. We must teach our children to have a balanced thought process of the present and the future concerning the use of money.

Examples of living for today are not hard to find. One of the best examples of this problem is the United States government. What are we doing to the future of our children by passing on a fourteen trillion dollar (that is $14,000,000,000,000.00) debt to our children?

How does this need for balance affect our daily living? Trust me, I know the rigors of the wants and desires of our children—including what we as parents expect of our children—but balancing these desires with our actual cash flow is tricky. Do you have the recommended three to six months' salary in a savings account? I know very few that are able to keep those kinds of reserves for a rainy day. As a matter of fact, my family has difficulty with keeping this kind of reserve! When a job is lost or pay is cut, what happens to families in our country? Homes and cars are repossessed! The instability of our economy is challenging many families.

So what may be the best way to help your children understand how to think about money? It's the example you demonstrate in your financial life!

A survey of teenagers, completed in 2010, asked this question, "The biggest influence on the way I spend and save money is...?" The four choices provided in the questionnaire were teachers, the media (including TV, magazines, books, radio or celebrities), friends, and their parents. The answer 7 of 10 teens gave was... drum roll please... THEIR PARENTS!!!! (Notice the key words in the question "...spend and save..." which is another way of saying the present and the future!)

You may be thinking, "Oh, no!" But take heart! If you have not given your kids a good example thus far, you still can. My encouragement to you is, be intentional! Take the time to learn about improving your finances and allow your kids to participate in the learning.

Editor's note: Shane's book, Dad Cents, gives you the practical tools you need to help your kids avoid some or most of the mistakes you may have made with money. Shane is offering NFI's Dad Email readers and Father Factor blog readers a special on the book! Click here to order.