How can I help my child’s future relationships? personal finance education

Parents who hope their children will grow up to have a thriving romantic relationship can lay the groundwork in a way that may be unexpected: They can teach their children sound financial principles and behaviors.

A new study from BYU shows that kids who learn money management tips like saving and budgeting from their parents are more likely to have “flourishing” romantic relationships as young adults.

The survey, which included nearly 2,000 young men 18 to 30 years old in romantic relationships, was published in the Journal of Family Issues.

No one is surprised that healthy financial behaviors help kids manage money when they start earning it. Lead author Ashley Lee Baron Black, assistant professor in Brigham Young University’s School of Family Life, said the study is one of the first to look at the impact of these behaviors on romantic relationships.

LeBaron-Black said it’s important for parents to do three things to boost their children’s financial literacy:

  • Lead by example so they see the principles of money management live, not just discuss them.
  • Have thoughtful conversations about money, including conversations about different techniques to help with finances, including saving, budgeting, and paying for things on time.
  • Offer experiences that allow children to make financial decisions and form strong habits.

One of the other study findings surprised even the researchers, LeBaron Black told Deseret News. While financial knowledge acquired when the child was transformed into healthy financial habits improved romantic relationships, financial distress does not prevent relationships from thriving in general.

Long live the smart financial perks

LeBaron-Black has studied how the financial knowledge passed on by parents affects children for several years. She knows that the lessons her father taught her gave her a boost as a young adult. The Deseret News reported in a 2018 study I collaborated with in the Journal of Financial Consulting and Planning that showed that the price of financial mismanagement goes beyond just building wealth. Among the possible outcomes are “poor health, academic stagnation, problematic personal and family relationships, and a reduced likelihood of transitioning into adulthood effectively.”

This study showed that parents who educate their children about finances give their children more financial capacity and independence for life. The article noted: “Their children will have less debt in emerging adulthood, more savings and better credit scores. They will be less likely to default on loans including mortgages and will have greater net worth as adults. Good money management may contribute,” the study said. in increasing self-esteem and improving physical and psychological well-being.”

Emma Kratz Bailey, 24, of Provo, Utah, relies on it. She and Taylor Bailey have been married for nearly two years and don’t stress too much because they know how much they have now and have talked about how they’ll likely weather the fluctuations of income and expenses as she’s working on a civil engineering degree. Currently, he is the primary wage earner, an independent contractor that helps people file claims for work-related injuries and illnesses. She is a student and part-time research assistant and is planning to go to graduate school.

These plans are built in part on financial principles that she began learning when she was eight or nine years old. She remembers her parents talking about money in elementary school in a very general way, but she reached the first turning point when the iPod came out with the video. It was spent – about 300 dollars. She really wants one. Her parents, Greg and Stacey Kratz, encouraged her to save her allowance and money, and if she saved enough, they said they’d raise $50.

She said, “I was so excited to do this, because I actually got lessons on how saving your money will help you do bigger fun things later, instead of doing smaller fun things now. It was a huge bonus. I loved having this iPod.”

By the time she was a teenager working in a sandwich shop and helping teach piano on the side, she was addicted to saving. When she left on a mission to The Church of Jesus Christ of Latter-day Saints, she had earned about $5,000, which came in handy later when she got married and went back to college.

She said she learned about money both in the sit-down conversations her parents had with all their children and in the casual side-by-side conversations. But seeing them “really live this way and do it with their money really cemented the ideas for me”.

When she thought having a dollar meant she had to find something to spend it on, her mother encouraged her to hold on to it for something better.

“I still forget it sometimes,” Kratz Bailey notes with a chuckle. “But I find that budgeting and keeping track of my finances now helps me honestly feel less stressed about money.”

She said knowing how much she has to spend on groceries and other needs “definitely” translates to less stress in her marriage. And she got another wise advice from her folks: “When you’re married, make sure you connect with each other and stay on the same page about money.”

What did the study find?

When researchers looked at how—if they were educated at all—those in romantic relationships were taught about money, they specifically took into account two potential causes of the association with prosperity: financial distress and financial behaviors.

“Interestingly, although financial socialization tends to be associated with less financial distress later on, and we found this link, there was no such mediating aspect or spillover effects that occur with financial distress. So this does not help with Explaining why financial socialization affects relationships,” Baron Black told me.

On the other hand, the behaviors were really affected by how well they taught their parents about money. This helped their relationship.

The study did not show causal links, but researchers have theories, starting with the obvious idea that better financial health simply puts less stress on the relationship. LeBaron-Black also believes that there is a good chance that people who have developed the habits and skills associated with good financial behaviors – which require discipline and effort – may be people who will put that effort and care into the relationship as well.

She points out that the study was considered prosperous, not satisfied. They are not the same. Relationship satisfaction is a central calculation: Am I happy? Can i do better? LeBaron Black said prosperity epitomizes the health of a relationship. “Are we both better for being in a relationship? How connected are we? Does it help us grow as people?”

Had they looked at contentment, she said, financial hardship might have made a difference. But when money is tight and bills pile up, people can grow up and benefit from each other anyway. It might even help them learn to work through the tough things together,” LeBaron Black said.

As for the surprise that financial distress hasn’t affected the relationship’s flourishing, she said it could come down to averages. Financial stress brings some couples closer during their fight, but tears each other apart. Perhaps the number of pairs in each case was balanced. Or it could be because adulthood is a point in life when financial hardship is “kind of foreseeable, so people don’t see that as a drag in their relationship,” LeBaron Black puts it. Young people don’t earn much money. They may have student debt. so what?

One might care a lot about financial behaviors, such as reckless profligacy or not paying bills. Simply put, you don’t want a partner who skips paying the rent and instead buys a car, but you’re kind of expected to have student debt or not earn a lot of money at this age.

There is no reason not to teach

LeBaron-Black said the resources parents should have does not determine how well or whether they teach children about money, although it can influence what parents know and how they model behaviors. Those with financially difficult lives may have more experience with challenges and place more emphasis on their children’s education.

“I don’t think it’s correct to say that high-income families do better at teaching their children money. I think a lot of low-income families do really well. I try to tell parents in general that no matter what their circumstances, parents have a responsibility to educate their children Money as much as possible. You don’t have to be an investment banker to teach your kids basic healthy financial habits. They will need that knowledge to be successful as independent adults.”

A semester of personal finance at school will not come close to replacing the ongoing daily impact that parents have on their childhood. Children learn more from this example. But rather than allowing tacit learning of attitudes and values, she recommends having purposeful, candid conversations and learning moments.

The study did not look at what kind of financial education the uninvestigated romantic partner had or whether it made a difference. LeBaron-Black said it’s safe to assume that having one partner understands good financial behavior better than two partners who don’t. But she points out that it can lead to a mismatch in financial attitudes and values. Savers and spenders can hold their heads.

Other study authors are Matthew T. Saxe and Toby M. Drigs of Brigham Young University and Melissa A. Curran of the University of Arizona.