I am regularly asked: "Why don’t we know how to manage money?"
It is a difficult question to answer succinctly. We could blame the lack of financial literacy classes in schools. People say it is because they are not good with numbers or they hated maths in school. Others tell me how their partners are better at it and they find it boring or confusing, so they are happy to hand that responsibility over to someone else.
There is a sense of “there is no point in even trying” about these statements. Psychologists might label that a victim mentality. However, I feel that it is closely linked to a lack of financial self-confidence and experience.
In reality, being good with money has little to do with being good at maths. True, it would be helpful if schools taught this essential life skill but we need to also consider our parents’ influence, the media we consume and the influence of our extended family and friends. The list goes on and on.
Where did you learn to cook, eat a balanced diet, have a healthy disagreement, know what a healthy self-image looks like and set boundaries?
I doubt many would answer school. Having a healthy relationship with money and knowing how to manage money are also essential life skills we need to learn somehow.
So, where do we learn? As parents, we know our babies need to fall many times before they can walk. They learn by trying, failing and trying again until they build up the strength in their legs and have the confidence to walk by themselves.
Why don't we apply this approach to all life skills our children need to live confident, successful and healthy lives?
I have friends who, in their 20s or sometimes into their 30s, had never washed their own clothes. They take the huge laundry bag home at the weekend and their clothes are magically washed and crisply ironed.
When I first went to college, I was surprised by how many of my flatmates had no idea how to arrange utilities, pay bills, open a bank account or cook. Every new life challenge resulted in a call to their parents to, at best, provide guidance or, more likely, do it for them.
To my amazement, and occasional envy, that often included sending more money as my flatmates had already spent their allowance because they had never learnt how to budget or use limited resources wisely.
But what happens when that loving person at the end of the phone, who sends endless amounts of money and washes clothes, is no longer around?
It is certainly not limited to a parent-child dynamic. When well-meaning parents and partners apply the “don’t worry, I will take care of it” approach to finances, it can have disastrous results when their child starts earning money or their partner is suddenly alone and has to manage their money themselves.
It can feel quite similar to being thrown into a bottomless pool, often with an emotional weight attached to your leg.
For some, it is a divorce; for others, a sudden death. In both scenarios, they find themselves in the midst of grief, shock and, sometimes, depression.
To be told they also have to suddenly figure out the finances can make a horrific situation even more stressful.
People who found managing money too stressful or overwhelming to tackle previously are forced to face their fears while also grieving. It can have major long-term effects on that person’s financial and mental well-being.
By taking on all financial responsibilities in your relationship, be it with your child or partner, you may feel you are contributing to that person’s happiness, reducing their stress or helping them have more money in the long run.
But are you, in reality, depriving them of the experience and confidence derived from falling down and picking themselves up again so they can learn to run?
Are you inadvertently helping them to stay sitting on the ground, relieved in the short term but actually feeling dependent, lacking confidence and full of shame when they see others running around having fun while they are immobile and dependent?
Think about this – are you enabling your child or partner to be financially confident, self-sufficient and happy, or are you, unconsciously and unintentionally, contributing to depriving them of a crucial life skill – their ability to be financially self-sufficient and wealthy?
In the case of your children, are you driving them headfirst into a lifetime of financial difficulties, dependence and stress?
To avoid this, perhaps now is the time to let them take financial control.
Carol Glynn is the founder of Conscious Finance Coaching