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Tips for Talking to Children about Money
Dr. Dale V. Atkins, March 2015

The way we talk about money reflects our basic values. As we become aware of this connection within ourselves we can become more conscious about what we are teaching our children. They listen to what we say and they observe our behavior. Whether you have a lot of money or a little, each of us can help the children in our lives become financially responsible. We can invite them into our decision-making process as we consider purchases and contributions against a backdrop of what "we need" to pay for essentials. When they are engaged, children can become aware of what's involved in making financial choices particularly when differentiating "wants" from "needs. We can give them opportunities to develop a solid work ethic. Kids thrive when they feel a sense of accomplishment from working hard at something and reaping the benefit (instead of having everything given to them). Children can learn a cycle regarding money that goes something like, you earn it, you consider it, you decide what to do with it. Children of any age can become aware and learn how to manage their money (this is where the tooth fairy and grandparents' gifts can be helpful). The best time to begin teaching about money is as soon as they begin to notice it. What kid does not know that money buys stuff?

There are lots of layers to this as far as teaching and developing a sense of connection goes since so much shopping happens on a mobile device with a click or with a swipe of a plastic card. When this happens, it is tough to recognize what is a true cost and value can get lost in the shuffle. But, children can still become aware of the importance of earning money through work, saving with a plan, spending based on having goals and a budget, and giving to charity. Helping kids learn about money is one of the most important lessons we can teach them. They will need to handle money their whole lives. If their early experiences are positive, they will likely become more "invested" and involved in positive ways. It takes time to develop good habits so give your child a variety of age appropriate opportunities to develop their "financial literacy." Children learn by example so we all need to be sure we are setting a good one.

Remember these tips:

Show your kids how you spend money. - Use cash when you can because your child may only be used to seeing you use a credit or debit card or click on line to pay for something. It is more challenging to teach these as a source of money to a young child. And "plastic" doesn't look like money so it can give a child a sense that there is an unlimited amount available.

Take your child shopping for something. - Discuss beforehand what the budget is so the boundaries of spending are understood and established BEFORE you are at the cashier.

Talk about why an item is out of reach. - The idea of "simpler living" is only going to be effective if you live by that credo too. It is extremely valuable to teach your child the difference between quantity and quality. This way, they are more likely to appreciate the value of special things.

Teach your child to save for the things they really want. - By doing so, the item increases in value in their mind, especially if they work to gain the money to buy it "with their own money" or with "matched funds." That particular item may in fact become super special because he or she "worked for it."

If you believe it yourself, you can teach your child the connection between YOUR values and money.

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