For many people, talking to their kids about money is a taboo subject. However, it’s never too early to teach your children the basics. You want your kids to enjoy being kids. But teaching them the value of money early will help them be responsible when they start making their own money.
Children absorb information differently than adults, so make sure they learn from you instead of through media and the internet. What you teach by example and talk about must be age appropriate. Here are some tips for how to begin this important dialogue with your kids.
Take it Slow
When we say you should talk to your kids about money, we don’t necessarily mean sitting them down for a formal discussion where you explain it all. Instead, start simple. If your child asks you a question about money, be honest with them. By letting them ask questions you can gauge what they already know and understand. When they realize you are willing to be open with them, they will start to be more comfortable asking you more money questions.
Be Honest with Them
If money is tight or you have had a financial failure in the past, tell your kids the truth about it. If in the past you have made mistakes and ran up debts by overspending, share the lessons you learned with them. By explaining what you have done wrong, you can help them avoid making the same mistakes.
Talk Concepts, Not Specifics
One of the main things parents tend to be hesitant about is disclosing their income and expenses to their kids. Don’t worry about it. Kids typically won’t want (and certainly don’t need) to know the specifics. They need to learn the basics of spending, saving, earning, and personal budgeting.
One of the classic ways to teach kids about money is by giving them an allowance. How much you give them is up to you, but any amount can help teach them the basics. Perhaps they are interested in an upcoming movie or a new video game. By putting the burden on them to pay for it themselves, you will help them understand how much value a dollar actually has.
Some parents only believe in giving an allowance for doing chores. While there may be value in this, you may also consider that chores are part of being a member of a family. Meaning they are required to complete their chores, thus are not ‘working’ for their allowance. This will avoid your child refusing to do a chore simply because they don’t care if they make money.
Set Goals as a Family
Lots of children have no idea what a budget looks like. The concept of money is entirely foreign to them. They get that you need it to buy things, but not really what the transfer of money for goods or services truly means. This is something that younger children struggle to understand.
When you are creating your family budget, let your kids sit in on the meeting. When you set goals, you can better explain why you may need to skip on a vacation to help pay for a new car. Or you could plan how can the family will save in order to afford a vacation.
Need Help Talking to Your Kids About Money?
At The Alexandrite Group, we realize that many parents feel overwhelmed at the concept of talking to their kids about money. They themselves might feel unsure of the topic. We can help by creating a custom age-appropriate curriculum for your family. Learn more about our Budgeting with Kids service and contact us today to discuss your options.