Children and Money

Part 2: Parents Guide to Raise Financially Confident Kids

Part 2: Parents Guide to Raising Financially Confident Kids | www.TheHeavyPurse.comOn Monday, I began my guide to raising financially confident kids by focusing on breaking some popular money myths and laying down the ground-work as to how financial literacy benefits our children. Today, we going take a deep dive into talking to kids, young and old, about money. While I recommend starting these conversations when your children are toddlers, it’s never too late to start.

The biggest mistake is simply not having the “money talk” with kids. Many parents want to wait until their kids are older, believing they will better understand the lessons being taught to them. It’s certainly possible. But I also strongly recommend that you don’t wait and start talking to them now. While it’s true young kids won’t understand everything you tell them, they will also understand more than you realize. And most importantly, money will never have a chance to become a taboo topic in your home and you can avoid bad money habits or beliefs from ever taking root. It is easier to mold your child’s money mindset when they don’t have any bias or fear that holds them back.

With that being said, of course, it’s important to keep the conversation simple and positive. We started by sharing with the girls how we were saving money for a family vacation. It helped introduce the concept of saving and value-based goals around something the girls were very motivated in helping us achieve.

Start with Save, Spend and Share Goals

Teach Kids How To Save Spend and Share Their Money | www.TheHeavyPurse.comThese goals formed the groundwork of my money conversations with the girls. They helped them understand one of most important principles about money — it needs a purpose. And it is this purpose (or goal) that helps guide our decisions.

In the post I go into more detail on how save, spend and share works, but it is a very simple and powerful set of questions. My girls have been setting personal save, spend and share goals since they were six years old, and it is something they look forward to doing annually. I am also very proud to share that they have done a great job of achieving their goals, which helps them feel financially confident and gain a stronger sense of overall self-worth too.

Other Benefits of Setting Save, Spend and Share Goals

Save, spend and share goals will help your kids become comfortable with setting and achieving goals and using their goals to make confident decisions, just as my girls did. These are important life skills that will serve them well now and in the future. Goals also help you respond to dreaded “I want” store tantrums and find teachable moments to have these important talks with your kids, without it seeming like a lecture.

[one-third-first]Video: The Best Response to "I Want" | www.TheHeavyPurse.com[/one-third-first][one-third]Money Conversations: Shopping with Taylor | www.TheHeavyPurse.com[/one-third][one-third]The Power of Money Conversations with Kids | www.TheHeavyPurse.com[/one-third][clear-line]

A Little Pre-Pep Money Talk

Some parents really stress over this. They worry about questions their kids might ask them or don’t feel ready to have the conversation. These are valid concerns or fears that can prevent you from talking to your kids, which we don’t want to happen. The following posts address any lingering money hang-ups you may have, and my 2-Step tutorial outlines how to ease into money conversations with your kids.

[one-third-first]How Do You View Money? With Joy or Fear? | www.TheHeavyPurse.com[/one-third-first][one-third]How To Start Money Conversations with Kids | www.TheHeavyPurse.com[/one-third][one-third]Making Money Conversations with Kids Easy | www.TheHeavyPurse.com[/one-third][clear-line]

Money Tutorials by Age-Range

Here are simple guidelines, tips and suggestions to help you talk to your kids about money based on their age. And regardless of age, I always recommend that you start with the basics – setting save, spend and share goals and giving money purpose.

[one-third-first]How To Talk to Kids about Money (ages 0-7) | www.TheHeavyPurse.com[/one-third-first][one-third]How To Talk to Kids about Money (ages 7-12) | www.TheHeavyPurse.com[/one-third][one-third]Part 3: How To Talk To Teens about Money | www.TheHeavyPurse.com[/one-third][clear-line]

Up Next: More Teachable Moments and Trouble-Shooting

On Monday, I’ll share some more teachable moments that you can utilize and other essential money and life skills that are important for kids to learn.

Shannon

November 6, 2015  •  3 Comments  •  Children and Money

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Comments

  1. Friday, November 6th, 2015
    I just became a parent 3 days ago, and have already been thinking about how to raise my kid financially and educate her. It kind of feels obsessive, but I think you can never start early enough.

    Confidence is a huge key point to becoming financially successful, and I think a lot of people focus more on literacy rather then emotion when it comes to money, including myself.

    Will definitely check out some of your tutorials!

    Loved the post!

    Peter
  2. Saturday, November 7th, 2015
    It is so nice for a father to share his knowledge on money management such as budgeting, saving, and spending to my kids because I feel they need to know it at a very young age so that they can become financially literate and ready when faced with such circumstances.
  3. Sunday, November 8th, 2015
    Our daughter is just 16 months now, but we definitely plan on making money a regular topic of conversation in the future. I love that your girls set annual goals! Modeled after what you and your husband do, I presume? I think that would be a great idea for our daughter, but my hubby and I might have to do it ourselves in a more formal manner in order to model the behavior better. But setting annual goals like that would probably be a great idea for us as well :-)
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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