Have you ever talked to your kids about money, or is the subject taboo within your household, for whatever reason?
Sooner or later, you’re still going to have to have the finance conversation with your children. You certainly wouldn’t want them to learn about money matters from the Kardashians or any social media “influencer” whose idea of money management is spending it on the most frivolous things.
Besides, it’s never too early to have a conversation with your kids about money. For all you know, they already know more about it than you think. What they need is guidance, and that’s where you come in. Here are some tips on talking to your kids about money and its management.
Make the talk age-appropriate.
Of course, you can’t be talking about the stock market and retirement plan contributions to 5-year-olds. It’s even doubtful if the said topics are already appropriate for teenagers, although some teens might already take an interest in them.
In any case, any conversation about money matters with kids should be age-appropriate. Kids 4-6 years old, for example, will certainly be interested in learning about the concept of money and that it buys things, and that they can earn it, among other things. Ten to 15-year-olds, for their part, are already old enough to be taught about bank accounts, debts or credit, and how they work.
Talk about how you earn money and use it.
Money doesn’t grow on trees, and it’s absolutely crucial that your children learn that at the earliest possible time. Impress upon your kids that everything they have, from the clothes on their back to the food that they eat, are being paid for by paychecks that their parents—that’s you—have worked hard to earn.
If you’re talking about this to your teenage children, then you will also be, in effect, dropping a major hint that they all should get jobs when school’s out. It’s a great way of teaching them responsibility, and it wouldn’t hurt learning and accepting it at an early age.
Don’t just tell them; Show them.
Talking to kids about good financial habits is great, but setting them examples is even better. By setting easy-to-follow money management examples, your child will get a good idea about the norms and expectations about finances in your family that they have to follow and meet.
Setting a shopping budget and sticking to it is an excellent example to set for your kids. So is teaching them to how to fix, not immediately throw away, stuff that break. If there’s that one thing you want to buy at an impulse, tell your kid about it and show him or her that you can wait until you’ve saved up enough money before buying it, if ever.
Teach them to save regularly.
No talk about money management will ever be complete without introducing the idea of saving money. For the little ones, a piggy bank and a handful of coins would make useful visual aids for teaching them how saving money works. For your older kids, introduce the idea of opening a bank account.
While teaching them the basics of saving money, you can then tell them how to get the money to save in the first place. You can then lay out and discuss allowances, rewards for academic achievements, compensation for chores—all of which they can draw money from to set aside for their savings.
Don’t make it a one-time conversation.
Don’t treat the money talk with your kids like a one-time seminar or workshop. If anything, conversations about funds should be incorporated into your day-to-day activities like shopping, where you can include your kids in the buying decisions. By talking about money matters as openly and as frequently as you can, you are helping your children develop a healthy relationship with the idea of finance.
These tips are just the proverbial tip of the iceberg when it comes to money management for kids, but they’re good places to start. As they grow older, their curiosity and interest about your family’s finances will only grow, and it’s imperative for you to be there to answer any questions they may have and provide them the guidance that they need.
About Samantha Green
Samantha Green is the Content Marketing Strategist for the MCA award-winning app, BusyKid, the first and only chore and allowance platform where kids can earn, save, share, spend, and invest their allowance. A mom of two, she enjoys spending time with her kids and reading books to them