School is starting…a great time to begin those critical money lessons! Below is a part of the great interview I did with the talented team at TheEverymom.com. Here’s the link to read the full article: TheEverymom.com – “What You Need to Know About Talking to Your Kids About Money”. Enjoy!
What You Need to Know About Talking to Your Kids About Money | TheEverymom.com
When I was pregnant, my very sweet mother-in-law gave me a gift for our future son: a piggy bank that is designed to teach kids how to save, invest, spend, and donate their money. I put it away because teaching a child about money was one of the last things on my mind. I was still pretty focused on the delivery and other crucial things like that.
But after he was born, my husband and I started having more long-term discussions about how to raise our son. A lot of these conversations revolved around money. Would we pay for college? What about a car? What is the “right” number of gifts for holidays and birthdays? And when should we start giving him an allowance?
Even though these decisions are far in the future, I couldn’t help but think that time will fly. I mean, I’ve blinked and suddenly he’s sitting up and rolling over. If we wanted to give him the best start with money, we might want to create our plan sooner rather than later. Research shows that children who grow up in households where money is talked about and modeled well have better financial outcomes.
Because I have no idea how to actually have a money conversation with a child, I decided to reach out for some expert advice. I contacted Susan Beacham, founder of Money Savvy Generation and the creator of the Money Savvy Pig piggy bank my mother-in-law had gifted my little guy. She’s been teaching financial literacy for nearly 20 years, so she’s created some excellent exercises and resources to help parents navigate these important lessons. Read on for her advice.
Start the conversation early.
According to Beacham, we should start talking to kids about money earlier than we think, and it’s not a one-time conversation. We need to constantly be modeling the behavior that we want them to adopt. It’s not enough to talk to kids about making smart spending choices and saving money for big purchases — we have to actually do that ourselves because they are constantly watching our every move and will reflect the behaviors we show them. No pressure.
For example, when we’re grocery shopping and deciding between two products, don’t keep the decision-making process in your head. Give your child a window into the choices you’re making by saying,”This brand is great, but it’s $0.10 more expensive. Should we buy the cheaper brand and try it?” She says by doing this you’re helping your child understand the tradeoffs that you’re making with money on a daily basis.
Help them understand goals.
Because money is such an abstract concept, it’s your job to provide concrete ways for your kids to understand money. Beacham suggests a goal-setting activity to help with this. You can do this activity with your kids even before they are in kindergarten. As soon as they understand that we use money to pay for things, they are able to grasp this activity.
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