When kids are old enough to spend money, they are old enough to learn about money. You can start having conversations with kids about money as early as 4 or 5. Every child is different, so use your judgement for when certain topics are age appropriate for your little ones.
If you don’t have kids, you can use today’s newsletter to help extend compassion to your inner child, and identify areas to nurture yourself as an adult in ways that you may not have had access to in early life.
1) Talk About Money
Money is the greatest taboo in our society but it doesn’t need to be a taboo in your family. Having healthy early conversations about money can support a positive life-long relationship with money for the children in your life–this is an intangible and powerful form of generational wealth. When discussing money, its important to make sure kids know that its the adult’s responsibility to ensure needs are met and that things go as planned. Make sure to clearly communicate its not their responsibility to fix anything themselves.
That being said, it is appropriate to let them know that when things are going well financially, it empowers you to meet more family wants, or that wants may need to be cut out or reduced significantly when the family is going through more challenging times. Being open, and explaining the “whys” are key.
2) Teach Them To Make Trade-off Choices
One of the most common things I work on with adults in my practice is learning to make trade-offs. It is a learned behavior to be able to look at each financial choice with the inherent understanding that saying yes to something often means saying no to something else.
In most households there are finite resources and so for example, choosing to go to tennis camp may mean they to need to wait to get a new bike. It may mean that buying an expensive pair of jeans they have their eye on means skipping pizza Fridays for a few weeks. If you are already making these calculations before saying yes or no to your child, share your thought process.
3) Explain How Credit Works
Trade-offs don’t become as ingrained of a habit when credit is misused. Let your child buy something on a credit card, and then review the bill with them later. Explain it has to be paid within a certain amount of time, or they will have to pay more than what it originally cost. Continue exposing your children to credit and explaining age appropriate elements.
There are resources you can use to educate yourself before talking to your child. By the time they get their own card around 18 to 24 years old, try to cover billing cycles, compound interest rates, and what makes up credit scores. If your children are already adults, its not too late. It is never too late to heal your relationship with money, learn and change. Just start.
4) Be Mindful Of Your Energy
Kids are emotional sponges. Think back to when you were younger. Even if the adults in your life didn’t explain everything to you, you could feel it. So try to be mindful of your energy about money when you are around your kids. Many of your beliefs will become theirs. Try to be aware of the power of positive versus negative self-talk.
Think about the things from your own upbringing that shaped you, of your money story, and how your caretakers contributed to your story. What can you do to better serve the kids in your life? What do you wish you knew? Share your life experiences and even your mistakes with them.Try to create a safe and educational space to talk about money with your kids.
You can also forward and share with a parent in your life.