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


August 30, 2018

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. Also, down the line, negotiation has significant financial implications, too. When your kid faces their first salary negotiation or haggles over interest rates, you want them to be as prepared as possible.

Research shows that women negotiate less than men. 48% of men negotiated their salary in their most recent job, only 32% of women did. So 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. Therefore, 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. For example, 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. Negotiation is a skill essential to financial health as adults, just like saving, budgeting, and other money skills. We have previously discussed the link between raising kids with high self worth and negotiation. So now, we are 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. So, 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, they should also be able to explain it. So, 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. So, lead by example.

Practice active listening.

Repeat, out loud, the other person’s needs back to them to make sure you understand. Therefore, 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 is 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.

Once you do, compare them against each person’s original interests. To avoid changing your goal partway through a negotiation, 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. Therefore, 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.

Article by Katie Simon

Katie Simon Katie Simon is a writer whose work has appeared in The New York Times, Business Insider, The Washington Post, BuzzFeed, and elsewhere. She earned a BA in creative writing and marketing at New York University and an MA in nonfiction writing at University of East Anglia in England. She is from Boston, MA.

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