How come it is easy to have these awkward conversations with my kids, but when it comes to something as simple as money, I don't even know where to begin?
Today, our family finance guru, Justin, shares 3 simple things parents can do now to have better conversations about money with their kids.
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In a previous post on teaching your kids about money, I ended on serious note (you can revisit that post HERE). We have a disconnect between what parents are doing to teach their kids about money and the real life results of that education, or lack there of. Studies repeatedly say college students have apprehension about making financial decisions for the first time. So what's the deal? How do we begin to turn the tide? Here's 3 simple things I think even the busiest parent can do.
1. Start the conversation now.
If you think about it, money is the last taboo subject in our culture to talk about. But think of all that has changed. Your children will be able to google how much you make. They will be able to search the value of their home versus a friend’s home. The bottom line is there is no logical reason to think you can keep money private from kids. So proactively start the conversation with them. Ask questions.
Questions are the timeless way to engage kids and see what they are thinking. Find captive times in the car or at the dinner table to ignite their understanding.
2. Prepare for the teachable moments
From my previous post, I was embarrassed by the toy-aisle tantrum. But I failed to see that moment as the teachable moment. When we got home later that day, my son was over it -- he had moved on and we never had that cool-headed conversation I was hoping to have. Parents have to be prepared for those fleeting moments where we have our kid's attention.
There are several things make up this preparation:
- give your kid money via chores or an allowance
- share with them how you will let them spend their money
- bring their money with you.
When the conversation turns to the latest Iron Man, you pull out their wallet and see if they have the money. If they do, let them spend their money (assuming you approve of the item). This is the teachable moment. If they don't have the money, talk about how they can earn what they need. Tell them a story of how you had to wait and be patient to buy something awesome. This is the teachable moment.
3. Empower children to handle money
Money is best taught in the trenches of every-day life. There is no money summer camp that can replace the daily example that you set. So include them when it's appropriate (remembering Point #1). Let them spend their money on things they want or need. You can still direct what they spend on. Give them an incentive to save by either matching the amount or positively reinforce the decision to delay gratification. Let them pick a charity they are interested in supporting. Make it as tangible as possible.
You're probably thinking, “this is amazing stuff, but when exactly do you expect me to do this?” We never advocate adding "just one more thing" to the very full plate of parenthood.
Remind yourself of the ultimate end goal. Your child needs a set of money values to take root during the most formidable years. They will thank you later.
Money is more than counting loose change, and it's more than another skill to squeeze in between piano and soccer.
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