Mellody Hobson, who is 54 years old, was raised in a one-parent, economically disadvantaged home. Her mother’s
money habits
caused her financial anxiety when she was young.
“There was always a scarcity. We faced eviction frequently, and our phone service kept getting cut off. … I recall one instance where we were residing in an abandoned building,” Hobson stated.
an episode from “The Oprah Podcast”
That was shown in January. “Instead of settling the electricity bill, my mom would purchase Easter dresses.”
Mismanaging your family’s funds and failing to properly illustrate the importance of money to your children are two harmful practices, according to Hobson, who currently serves as co-CEO at the asset management company Ariel Investments and released the best-selling children’s book “Priceless Insights Into Money” in 2024. These behaviors may lead your offspring to experience persistent financial anxiety when they reach adulthood.
Children can grow up to repeat their parents’ poor choices, she added. “If you pay the minimum payment, your child’s going to do that,” said Hobson. “If you overspend, your child will overspend.”
Regarding Hobson’s situation, her mother’s extravagant spending was bewildering and highly stressful, leaving her feeling utterly helpless. She stated, “Honestly, it caused significant emotional distress for me as a kid. Since children have no power over such matters, they cannot simply find employment. They are essentially powerless.”
She mentioned that her background growing up inspired her to chase a profession in finance.
Ways to Instill Good Financial Practices in Children from an Early Age
Positive behaviors to instill in your kids from an early age involve talking about
the value of cash
And the significance of saving — and backing up your words with actions, Hobson stated.
Once, she provided her children with $3 in cash and brought them to a dollar store, where they needed to choose between purchasing candy—a disposable product—or selecting something more durable, such as a toy. She mentioned that this experience helped her kids gain insight when they later went to The Lego Store and came across a playset priced at $189 on sale.
This method is both pragmatic and comprehensible for children, according to Alexa von Tobel, who is an investment professional trained at Harvard University and serves as the managing partner of the venture capital firm Inspired Capital.
told SofTechMake It
in 2024.
It’s crucial to adopt a “matter-of-fact” approach during conversations about finances, as this aids children in grasping that money serves as “a means to achieve the lifestyle you desire,” she explained, instead of viewing it as an object of idolatry or neglect.
Hobson also suggested that using actual cash in front of your children could be beneficial, as youngsters might find it challenging to grasp the true worth of money when they see it merely as a digit on a screen.
“For kids, it’s linked to a credit card, a phone, or dispensed from a machine, making it really difficult to explain that you earn it,” Hobson noted, further stating: “Use cash so they can understand that it’s limited…and you don’t have an infinite supply.”
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