By 
When a child is born, no parent thinks to themselves, “I hope they grow up without any sense of personal financial responsibility.” I have never met a father who did not want his children to be in a better position than they were, financially, emotionally, or otherwise. Given the economic climate our kids are growing up in today, it’s moms (and dads!)’s job to teach money lessons that will prepare them for the real world of bills, student loans, and credit.
Yet few parents actively teach their children about money. The list of excuses is long: “I don’t want to burden my son with it; he has the rest of his adult life to worry about money,” or “I don’t know enough about finances to teach him.” and even, “My parents never taught me about money and I eventually figured it out.”
Here’s the rub: Whether you’re teaching your kids about money or not, they’re learning about the world around them. Do you want to take charge and proactively teach them, or let your actions and the world’s examples of money be your teachers? Here are 7 easy tips to teach your kids about money (as soon as they can read):
1. Change your mentality: it is not taboo. Many of us have been raised to believe that you don’t talk about money, even with family. I’m here to tell you that the only place you should talk about money is at home. Just as you don’t want your children to learn about sex or drugs (another “taboo” subject) from others, you want them to learn about money from you. By comfortably discussing money at home from an early age, your child will feel open to asking questions, and in turn, will give you the opportunity to impart important financial lessons.
2. Don’t let your fears or self-imposed limitations hold you back. Usually, we atrophy when we face a fear that we recognize as something important. Fear of talking to your children about money is no different. Whether you consider yourself a financial guru or not, you know more about money than your child. You don’t need to teach high level topics that may be over your head. However, it is essential that you teach your children the basics: the value of a dollar, saving, investing, rewards, earnings and financial goals. Don’t let your reservations about your own inadequacies when it comes to money hinder your child’s ability to get a head start on their financial future.
3. Keep it age appropriate. Once your child is old enough to learn to read, he will be old enough to learn the value of a dollar. When she gives her son money for lunch or buys him a new backpack, she is getting messages about money. Use these everyday occurrences as teachable moments. There’s no need to discuss tax brackets, stocks, interest, or retirement accounts with your little ones. Lay the foundation and those lessons will be better understood when they are age appropriate.
4. Make it fun! Many adults say that money is their biggest source of stress. Do your best to keep this message out of your conversations with your children. Don’t contaminate your ability to view money positively; frame it as a tool, not a stressor. Take time as a family to decorate the piggy banks together, which can be envelopes, shoe boxes, jars, coffee cans, or actual piggy banks. Or, create a colorful chart of community assignments to proudly display in your kitchen to keep the conversation going every day.
5. Create structure and be consistent. The sooner you can teach your children about the value of a dollar and the importance of saving, the better off they will be in the long run. Create a structured way to do this. One way is through an allocation system in which earnings are derived from a fixed list of tasks with dollar value allocations. To help your teen take control of her earning potential, let her know how you arrive at her earning potential weekly or monthly. Base maximum earnings on your child’s monetary needs. A sample formula is to use the child’s age or grade in school multiplied by a fixed dollar amount: for example, $5 x 3rd grade = $15/month. Based on the predetermined earnings amounts per task, deduct uncompleted tasks. Count and pay at fixed intervals.
6. Use visuals whenever possible. The community chore chart on the fridge is a great way to hold everyone accountable, as well as keep the conversation flowing. Your child’s potential to seek positive reinforcement grows as more enthusiasm develops around this focal point. Fun piggy banks are another daily reminder of the lessons being taught. Having two piggy banks for young children is ideal to start teaching the difference between short-term and long-term savings. Physically separating the money will be a useful visual tool.
7. Don’t try to perfect the plan. While it can be tempting to try to create a “perfect” plan, series of lessons, or assignment structures, don’t get too caught up. The most important thing is to start talking and teaching your children about money in a positive way. The longer you wait for your plan to be perfect, the more messages your child will inadvertently learn, and may have to stop teaching later. You can always change or adjust your system on the fly, but the most important thing is to get started. As they say, time is money.