Life & Work

Talking To Your Kids About Money

Part of growing up means asking your parents tons of questions. Kids want to know a little bit about everything from “where did I come from?” to “why is the sky blue?” – so, when they ask about money you really shouldn’t be surprised. Fielding questions about money from your kids can be tricky though. Often they want to know how much you have, how you got it or even if your family is rich or poor. Finding the balance between teaching your kids about finances and giving over too much information can be tough. For some people talking about money is taboo – it’s the one subject where they don’t go – keeping it extremely private, but for some putting it out on the table keeps communication open and everyone in the know. If you think you’re ready to breach the money subject with your kid, here’s a look at a few good tips for getting the job done.

  • Start early. It’s better to know that you are the one who talked to your kids about money rather than someone else. Instilling a sense of understanding from an early age will help develop better habits from the start.
  • Give your kids insight into how money affects the world. Talking to them about the economy is a great way to help them understand how it all works.
  • Explain the importance of balance and saving up front. It will help them understand when you say things like, “we need to cut back.”
  • Start them off early with understanding the idea of a budget by giving them an allowance. This will help them learn the basics of how to save and spend.
  • Be honest. If things are tight financially, explain that. Your kids are more resilient than you think – they’ll be happy to help find creative ways to save.
  • Teach them to use their allowance to pay for the special things they want. New toys, games or even special clothes are great tools to help a child learn about balancing their money.
  • If you’re comfortable with it, have your kids sit with you when you pay some of the bills. Show them how it works – which bills get paid and when.
  • Model the ideals of saving for your children. If you spend frivolously, they will to – so keep yourself on a budget also.
  • Open a bank account early on to give your child the chance to learn how to save just like the adults.

Have you talked to your kids about money? How did it go?