The Problem with “Money Doesn’t Grow on Trees”

When a parent frequently says, "Money doesn’t grow on trees, you know!" it may seem like a harmless way to teach kids the value of money, but it can have unintended effects on a child's development, including:

1. Instilling a Scarcity Mindset: Repeatedly hearing this phrase can lead children to develop a scarcity mindset, where they grow up believing that money is always scarce and hard to come by. This can affect their future financial habits, making them overly frugal, anxious about spending, or fearful of taking financial risks.
2. ​Creating Anxiety Around Finances: Children can internalize financial stress from parents, leading them to feel anxious about money even at a young age. This anxiety can carry into adulthood, affecting their confidence in managing finances and decision-making.
3. Reinforcing Negative Beliefs About Wealth: The message can unintentionally imply that money is inherently difficult to earn, making children feel that financial success is beyond their reach. This can limit their ambition or discourage them from pursuing lucrative opportunities, thinking they're unattainable.
4. Promoting Guilt About Spending: This phrase often comes up when children ask for something, leading them to feel guilty for wanting things or spending money. Over time, this can result in a reluctance to treat themselves or invest in their well-being, even when it’s affordable or necessary.
5. Impairing Their Understanding of Financial Management: Instead of teaching practical financial skills, such as budgeting or saving, this statement simply shuts down the conversation. Children miss the opportunity to learn about how money works and how to handle it responsibly.
6. Diminishing a Sense of Worth: If children perceive that their needs or desires are a financial burden, it can affect their self-esteem, leading them to feel unworthy of nice things or experiences.
7. Stifling Conversations About Money: It can discourage open dialogue about finances between parents and children. Instead of learning to discuss money matters openly and constructively, kids might feel that money is a taboo subject or something to worry about, not talk about.

​To foster a healthier approach, parents can focus on teaching financial literacy and responsibility through positive reinforcement and open conversations, helping kids develop a balanced, confident, and constructive attitude toward money. I also like Robert Kiyosaki’s approach of saying, 'How can we afford it?' instead of 'We can’t afford it.' This way, you get out of the scarcity mentality, and your mind will automatically start looking for ways to make it happen.