If you’re like most parents, you’ve always wondered when the right time is to start discussing money with your kids. How do we do it? Should we tell them how much we make? Do they need to know about our mistakes? We often don’t feel qualified to have the discussion and let it go until there is some bad habit that shows up and has to be dealt with.
For each family, the timing is probably going to be different but here are some guidelines to help you get through “the talk”.
It’s Never Too Early to Start
Even young children can understand simple money decisions. Instead of buying them something, take them to the store and let them choose. Give them a certain amount to spend on “whatever” they want. Try presenting them with a couple of different options such as buy this one expensive thing or buy two of these cheaper things and see how they do. Their choices might surprise you.
An important part of this lesson is to help them to understand how to get the money in the first place. One great way to teach them is to compare money with time. For example, $5.00 might equal one hour of chores. So, that new toy or the treat they can’t resist, is not only equal to $5.00 but also equal to one hour of doing chores. This helps them to understand spending in different ways. One is that the money doesn’t just show up, and another is that the “want” that they choose should be more important to them than the time given up to earn it.
Start Introducing Small Habits Daily
We all know that kids pick up a lot of their lessons from watching their parents. Be mindful of this when you’re spending in front of them. Help them to understand why you choose a certain product or company over another, and what the benefits of those choices are. If you got a great deal and saved quite a bit, let them know and try to give them ideas about how the extra money could be handled. Should it be saved for later? How about starting a wish jar and putting that money into the jar each time. Make them a part of it and plan a holiday or fun family purchase that they can look forward to. Not only is it something they can get excited about, but it’s a great way to show them how to save and teach them patience at the same time. When something positive comes from waiting, they’ll easily learn that saving for something is worth it.
Let Them Learn From Your Mistakes
We all make them, let’s use them to our advantage.
As parents, we don’t want our children to make the same mistakes we did, especially when it comes to their financial futures. Making a mistake financially is nothing to be embarrassed about and since you’ve already learned from it, there’s no sense in your child having to go through it also. Don’t be afraid to open up about your spending mistakes. Let them know why you felt it was a mistake and what you would do differently if you had the chance to do it again. They’ll remember this valuable information later in life when they start making their own financial decisions.
Teach Them That Money Isn’t Everything
There is so much media these days that children are exposed to. All day they are being shown things that they want and are told they need. The peer pressure of course, is always there adding to the problem. Explain to your children the difference between a “need” and a “want” and help them to see that the “things” they want to buy won’t make them a better person. Instilling a positive and confident attitude in your children will go a long, long way when dealing with peer pressure. A confident person is confident about who they are, not what they have or what brand they are wearing. If we all teach our children the true value of themselves, they won’t always feel the pressure to keep up with their peers.
If your child has learned about money and developed good habits of spending and saving, they might still want that “one thing” they can’t live without. That’s when you know it’s important to them for the right reasons. Instead of just running out and buying it, try to find ways for them to earn it and make shopping for it fun. Is the “can’t live without” on sale somewhere? Challenge your child to see if they can find it for the best price or a generic replacement for a name brand, etc. Would a used version be suitable? When we give our children these options and they find value in their purchases, they’ll create habits that will stay with them into adulthood.
What are some of the ways your family approaches kids and money? Share your tips with us.