Thursday, May 31, 2012

How to Talk to Your Kids About Money.

Man I just love reading the news. I especially like it when I find an article that confirms something I've been thinking. Yeah that might speak to my internal biases, but still... in February I wrote a post about being open with your kids about money matters then this morning I'm scouring the headlines and I find this NPR article on teaching kids about money.

Basically the article confirms that when parents openly discuss money matters with their children, the kids grow into adults that make better choices. Woo! The kids can learn and we have scientific proof.

Ok, ok... great huh? But as I came to the bottom of the story I came down from my validation drunk and noticed a problem. From the article:

"So why do such conversations happen rarely when they are so important? Serido said it may be as difficult to talk to kids about bills and bonds as it often is to talk about the birds and the bees."

Doh! If it is as hard to talk to your kids about money as it is to talk to them about sex...well, oh yeah, we have a problem.

So let's get to work on that. If this is a painful issue for you, you may need to do some personal work first. If you have used money as a yardstick, made mistakes, consider starting off by embracing those failures. Seriously, it hurts to think about it, but once you do it's very liberating! I myself am some embarrassed that I once got sucked into a magazine subscription deal that I couldn't afford and didn't really want, but there it is. I went into further debt and ended up living in my car for a while. Lordy, what was I thinking?! But guess what? I learned from all that! And being open about those mistakes allows me to share what I've learned from that experience with my kids. In the end it's a super win!

So let's be clear. Being able to afford the newest Playstation, or the $500 Nikes, or from my day a Members Only jacket is NOT what makes someone a good parent. Really...let's just allow that notion quietly expire into it's long overdue and much deserved death.

Good. If you've come through all that broaching the subject of money with your kids shouldn't be hard. You can start small if you need to. These are some steps that worked for me.

1. Put money in their hands - Earning it through an allowance, or the windfall of a birthday gift, there is nothing quite like direct experience to teach kids the value of a dollar. Spending it, or losing it can spark conversation. You'll be right there to point out a wallet is a better place for money then lick stuck to their forehead.

2. Take them to the bank - Not just for lollypops, but to help them open a savings account. Introduce them to the banker and let them do the talking.

3. Play money games with them - Monopoly is the old stand by, but there are a ton of other games out there now that target various age levels and can spark some great conversations. I've used Shopping SpreePaydayRags to Riches (which sadly seems to be out of production) and Tycoon all to good effect.

4. Explain the news to them - I've had some of the best conversations with the kids when I thought I was minding my own business and catching up on worldly events with Diane Sawyer. They listen way more than you might think they do, and if they ask a question...well boy howdy, that's your big chance!

5. Let them lean over your shoulder - This might be the hardest one because it puts you and all your 400 latt├ęs last month right out there, but it will reap the biggest rewards. Let them see a bill or two. Stack them up and let them see the pile. You don't need to fill them in on the full details of every paycheck, but they should know how it stacks up to the bills you have coming in. Small doses here is important, as is age appropriate info. This is not taking your 2yr old to task for flushing the potty so much it bumped up the water bill. It's providing just enough disclosure that the kids start to have a sense of ownership in the financial health of the household.

It's amazing how kids can rise to the occasion when given the chance. I'm reminded of that every time the 10yr old Amish boy rings me up at his parents market.

In the end kids are going to learn, whether you intend to teach them or not. If you are secretive about money, and judge others by what they have or they don't have kids will learn this. And while it is possible to over come a bad start it is a wicked hard and rocky road.

So come're a parent, a grown up, you're tough right? Get in those parent pants. You can do this. Just do it.

Already done it, or still working on it? Tell us about it!

Photo by VividImageInc


  1. Good post on an extremely important topic! I'm teaching my 7yo son ... he now carries his "wallet" with him whenever we go out ;)

  2. That's awesome! This summer, which has been frightfully busy, marked my kids second foray into their own business. Last year they made and sold duck tape wallets. This year they made and sold braided survival bracelets. They've made a heap doing it too.

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  4. It's always nice to have a pile of coins you payday lender don't touch and when you count it up and see how much is in there, it's always a nice surprise - like finding £10 you didn't know you had in your purse hehe! xx