For generations, we’ve been taught that money is a taboo subject. Much like religion and politics, bringing up your finances at the dinner table could cause grandma to choke on her Brussels sprouts. And if you didn’t learn how to talk about money as a child, it’s likely you won’t discuss finances with your kids.
But now that we’re all living in a time of major financial uncertainty — and spending every waking moment with our family members — we have a perfect opportunity to have money talks. As jobless claims reach historic levels and global markets fall, there has never been a better time for parents to engage in some real talk with their children. It’s time to break the taboo surrounding dolla dolla bills, ya’ll.
The Benefits of Talking to Kids About Money
If you talk to your kids about money from an early age, they’ll get comfortable with it and feel confident when they have to make their own financial decisions (which will come sooner than you think). I’m talking as young as 2 years old. I’ve already started talking to my toddler about money, even though he’s more worried about his favorite toys than making Benjamins.
While resources are springing up online to make educating your kids at home easier — or as easy as it can be when you’re teaching your children every subject and doing your own work — our kids don’t have a reliable resource when it comes to learning about money and finances. This is a shame because studies suggest that students who take financial literacy classes have better financial health as they progress into adulthood.
That said, it will probably fall to you to provide financial education to your kids — scary, right?
Many parents don’t know how to talk to kids about money. They worry that telling children how much they have in the bank could make their kids lazy or cause them to expect their parents to take care of them forever. Although it’s nice to be needed, it can be a slippery slope — next thing you know, your kids will be eating all of your food in your basement (aka their “apartment”) when they’re 30.
Some parents also worry about disappointing their kids by setting boundaries when it comes to spending. Contrary to these fears, talking about money with your kids is a good way to avoid raising spoiled children. It will help them learn limits and boundaries and understand that they have to earn and save in order to spend. And is your child really going to remember in weeks, months, or years that you wouldn’t buy the newest “PAW Patrol” Super Paws Mighty Pups Jet Command Center despite having plenty of money available? Probably not.
Knowing how to handle money becomes more important as children get older. They’ll need to have more in-depth conversations about topics like income tax, inheritance, property, and borrowing. If you help your children become comfortable with these conversations now, you’ll be able to help them adapt when they need to — and hopefully keep them from living in your basement at 30.
How to Talk to Your Child About Money
The benefits of talking to your kids about money are clear. The actual practice of it? Not so much. You’re probably wondering how to talk to your children about money when they (probably) don’t care much about the topic. And I know how hard it is to get a young kid to focus on a single topic for more than a minute. Here are four strategies that can make those conversations a little easier:
1. Turn family dinners into money talks.
It’s no secret that eating meals together benefits your child. Studies show that kids who share dinnertime with their families are less likely to suffer from mental health issues like depression and more likely to get good grades. Family dinners also provide an opportunity for communication and sharing about important topics, such as money.
In addition to educating your children, you’ll give them a chance to express their views and worries about money. Even if you just have money dinners once a month or every other month, your kids will benefit.
2. Ask thought-provoking questions.
Don’t use this valuable time to lecture your kids about credit cards and whatever other personal finance tips you learned from Dave Ramsey. Instead, ask questions to check their understanding of financial concepts while allowing them to state their money values.
Focus on general, open-ended questions, like “What’s worrying you?” or “What goals do you have for this month?” You can then incorporate money-specific questions into the mix, like “What are you currently saving for?” and “What charities can we donate to as a family?” Even if you have younger kids who may not have much to say on these topics, getting your kids thinking about them early allows them to formulate and articulate answers over time.
3. Add just-for-fun activities.
Talking about money doesn’t have to be all serious. Incorporate some fun activities into your kids’ money education to keep them interested and engaged. For example, you might start “spend, save, give” jars. Have your kids decorate their jars with pictures of whatever they’re saving for — like that “PAW Patrol” Super Paws Mighty Pups Jet Command Center — to help motivate them.
You might also consider mixing up the ways they can earn their allowance. Balance chores with more fun activities like pumpkin carving or a dance-off.
4. Set realistic expectations.
Remember that your kids are kids; they’re not used to lengthy meetings and probably have the attention span of a squirrel. Set realistic expectations, and don’t be disappointed if they don’t seem to care about the money talks — they’ll thank you when they’re 30 and not living in your basement.
To hold their interest, don’t try to have in-depth discussions every day. That’s not sustainable for you and or your kids. Start with a meeting once a month, which will give your kids a chance to look forward to it and to put what they’ve learned into action. And keep it short and sweet — 30 minutes max will be most fruitful.
Why is talking about money taboo? Because we learned that it was taboo as children, our parents learned the same from their parents, and so on. Break the cycle by talking to your kids about money more freely. As a result, we’ll be able to take better care of our financial health and enable a more positive money experience for the next generation. Plus, if your kids are good with finances, they can take care of you when your retirement rolls around.