My father gave me the gift of financial literacy and it was one of the greatest gifts he gave me. Everyone handles money and makes decisions every day on how to use their money. Too often kids leave home without even a basic understanding of how money works. This doesn’t happen because they have bad parents, but is the result of many pervading myths, including the belief that money isn’t discussed within the home.
If you’re like me, you want to give your kids the tools to succeed in life and that includes financial literacy. This knowledge isn’t always meet with much enthusiasm as some parents don’t feel prepared to be the teacher. I understand but you are more qualified than you may realize. The majority of what you need to teach your kids are the things that you are (hopefully) doing today.
Easy Ways to Talk to Kids About Money
The best thing parents can do is openly talk to their kids about money. Don’t let money remain a taboo topic in your home. Here are a few easy ways to start the conversations.
- Teach them money has a purpose. Without one, it’s too easy to spend mindlessly, so in order to become conscious spenders who use their money on what matters most, my girls set annual save, spend and share goals. Every time they earn or receive money they allocate a portion of the money to their goals.
- Explain “want” versus “need”. This is such a critical lesson. Initially everything may be a “need” to them, but help them see the difference by demonstrating it to them.
- When your kids ask you to buy them something. Don’t say “no” or “we can’t afford it”, but instead remind them your money already has a purpose (your family goal) and give them a an option to buy it themselves.
- When you go shopping, don’t internalize your decision process. Talk out loud and share with your kids how you decide what to purchase. Explain why you pay a premium for certain items while others items you don’t.
- Let your kids manage a small budget for their birthday party or back-to-school shopping. It’s a great opportunity for them to see how much things cost, to learn how to make compromises and to comparison shop.
This is just a small sampling of some of the ways you can teach your kids about money. You can find more details and additional lessons to teach your children in my downloadable workbooks. If you do these lessons consistently, you can instill good money habits in your kids and help them build a positive relationship with money. Edutopia put together a great infographic showing the impact financial education has kids.
One thing I consistently hear from readers and clients is that they wish their parents had talked to them about money when they were growing up. It’s time to break the silence and start talking to kids about how money works. It does make a difference in their lives.
How are you talking to your kids about money?
The Heavy Purse Store is now open! My new downloadable Money Club Workbooks—based on age or level of expertise—are now on sale. Each workbook provides five targeted lessons to help you grow Money Smart Kids. Please check them out in The Heavy Purse Store.