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‘Negotiation Parenting’ Boosts Your Kids’ Money Skills – Use these tactics to raise money-smart kids.

Negotiation is a skill we use throughout our life, starting from when we’re kids dividing up for afterschool sports, or deciding who gets to choose the evening’s movie. Down the line, negotiation has significant financial implications, too. When your kid faces their first salary negotiation, bargains for their first car, haggles over interest rates, buys or sells a house, or navigates the details of a work contract, you want them to be as prepared as possible.

Research shows that women negotiate less than men. According to a recent study, while 48% of men negotiated their salary in their most recent job, only 32% of women did. There’s evidence behind why: when women negotiate, both men and women negatively judge them, which can affect other aspects of their professional lives. But this trend won’t change unless we raise a generation that is accustomed to women asking for what they want—which mean we have to teach girls to stand up for themselves from a young age.

“Negotiation parenting” means giving kids practice with micro negotiations in everyday life: choosing which game to play, what music to play in the car. It can even apply to bigger decisions like allowance increases or bedtime changes. Just like teaching kids about budgeting, saving, debt, and other money skills, negotiation is a skill essential to financial health as adults. Last week we discussed the link between raising kids with high self worth and negotiation, and this week, we’re diving deep into modeling and teaching key negotiation skills:

Negotiation is a conversation, not a competition. Successful negotiation is about working together to find solutions that all parties find reasonable. By framing negotiations as conversations, not competitions, you’ll save a lot of headaches moving forward.

Identify your goal outcome, and state it. Instead of reacting to another person’s interests, they should walk into a negotiation knowing what they want and able to explain it. If you find yourself in a micro-negotiation without a clear idea of what your kid wants, pause the talk while they figure it out.

Model emotional control. Patience, inside voices, and respect, are all key components of successful negotiation. Lead by example.

Practice active listening. Repeat, out loud, the other person’s needs back to them to make sure you understand. Say, “what I’m hearing is, you really want ______, and you think a potential solution is _____.”

Empathize with the other person’s needs and desires. Step outside of your own shoes to try to understand where the other person is coming from. This is essential to coming up with realistic resolutions.

Brainstorm multiple solutions, together. This one’s key—by creating room for a diversity of options, nobody gets too attached to a single solution, and you may come up with more creative ideas that meet everybody’s needs.

Assess the pros and cons of the solutions. Then, compare them against each person’s original interests (try to avoid changing your goal partway through a negotiation—that’s why it’s so important to come in knowing what you want). Are you comfortable with the proposed solution? Could they consider tweaking the proposed solution to better meet your needs?

Negotiations won’t always end perfectly. Explain that just like in adult life, not all micro-negotiations will be completely satisfactory to all parties. Sometimes there are uncontrollable factors. But at the end of the day, it’s always worth stating what you want and going after it.

Teaching negotiation can have a huge impact on your kid’s financial future; one study suggests that women stand to lose as much as $2 million by not negotiating salary. With millions on the line, don’t miss out on day to day opportunities to practice micro-negotiations. you’re setting your kid up to benefit from negotiation skills for the rest of their lives.

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