When we hear the word "influencer," many of us think of people with large social media followings who use their prestige to sell products and services.

What do you think has the greatest influence on our money habits?

  1. TV and movies
  2. Friends
  3. Parents
  4. Social media

If you answered 3. parents, you are correct! While media and friends do influence our money choices, our parents have the most profound impact on the attitudes and values we hold concerning money. This influence begins early in childhood. 

What does this mean? First of all, "parents" in this case does not only refer to biological mom and dad.  It means the people who are doing the parenting – those who have taken responsibility for raising the child. These are the biological parents, step parents, foster, or adoptive parents, grandparents, or other family members. 

Secondly, it means that there are many ways that children learn from their parents about money. The two primary ways are through our explicit actions and through our implicit example. The characterization of learning as implicit or explicit simply refers to the parent's level of intentionality.

Implicit, sometimes called vicarious learning, occurs when a child's attitudes and behaviors about money develop through observation. Some examples of how this might happen include when a child sees a parent's charitable giving, watches a parent compare prices while grocery shopping, notices a parent's stress while paying bills, or hears money related arguments between parents. More in general, a child may learn through these implicit scenarios by observing parents' money management practices and absorbing the level financial of well-being expressed by the parent.

On the other hand, explicit learning occurs through direct experience with money. Perhaps this happens when a parent provides an allowance and guides the child in spending. An older child with a new job might learn budgeting by sitting down with a parent to discuss spending and saving priorities. Just like implicit learning, it could also happen during parent child grocery trips, if the parent actively demonstrates the process and skills needed to compare prices and provides opportunity for the child to try. Explicit learning also occurs when parents engage their children in discussion about money values or provide direct instruction about financial products. 

Lastly, for parents, this means that your actions are being noticed, and your lessons are being remembered. It is important to be purposeful in teaching children money skills so they can more successfully manage their money when they enter into adulthood. Take them shopping with you, show them how to make good decisions. Tell them about your successes and your mistakes. If you are unsure about your own money skills, University of Maryland offers personal finance workshops for both youth and adults. For additional workshop information and tips, contact your local Extension office, check out Extension's Financial Wellness pages, and follow the financial Facebook and Instagram accounts. 

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