Children and Money

Help Your Kids Build a Healthy Relationship with Money

How To Help Your Kids Build a Healthy Relationship with Money | www.TheHeavyPurse.comApril is winding down and with it, Financial Literacy Awareness Month. The highlight for me was the Financial Literacy Awareness Month Carnival: Our Greatest Money A-ha’s. I was joined by some of my favorite bloggers who graciously shared their greatest money lessons with all of us. Again, special thanks to all the participants for sharing your stories and helping make this year an even bigger success!

But It’s Not Over Yet …

Financial literacy definitely deserves its own month, but it is something we also need to celebrate and honor year-round. It’s too important of a topic to only put our attention on it for 30 days. As you know, I have a special passion for children and money, so it’s only fitting that I end this month talking about one of my favorite subjects. I know for many parents talking to their children about money isn’t second nature. It wasn’t something our parents talked to us about, so we aren’t sure how to start the conversation or what we should teach our kids. I’m going to break it down for you in three basic steps to help you get started and hopefully alleviate some of those concerns you might have.

1. Make The Commitment to Teach Your Kids About Money

I know this seems obvious, but the truth is very few parents actively talk to their kids about money. Our ability to use it wisely plays a significant role in how successful we are, regardless of how much we earn or our job title.

Every day I see parents practically flipping cartwheels to give their children all the tools they could possibly need to succeed as adults, but they never talk to them about how to make smart money decisions. If we really want our kids to succeed, money conversations need to become a priority and not an afterthought. Make the commitment to talk to your kids about money and if you don’t know how, then make the commitment to learn. My Get Started page walks you through how to start these important conversations.

2. Determine What You Want to Teach Your Kids about Money

Before you begin these conversations, you need to determine what specifically you want to teach your kids about money. What are the habits and beliefs you want to instill in them? These were the primary lessons we wanted to teach our girls and were a springboard to additional money lessons.

Money is a Gift

This is one of the first lessons my father taught me about money and it’s important one for kids (and adults) to learn. Money is emotional, which can cause us to view money as burden or something we covet to the point where we will even compromise our morals. Money is gift and needs to be treated with respect. It can bring so much joy into our lives and others when we use it wisely and in alignment with our values.

Money Needs a Purpose

Money must have a purpose or goals, because it is too easy to spend mindlessly. This is why in our family we set save, spend and share goals. The girls set goals every year, so whenever they receive or earn money, they immediately allocate it to their goals. Their save and share goals tend to be larger goals while the money that goes into their spend jars is their discretionary money. They might buy themselves (and occasionally Mom and Dad too!) a popsicle at the beach or use it when they find something unexpected they want without having to dip into their save jar and delay achieving their goal.

Goals Guide Our Money Decisions

This is the reason why we set goals, so we can use them to make smart money decisions. One of the chief reasons people wind-up with money woes is because they made poor decisions. And why did they make poor decisions? Because they didn’t have anything they were working towards to give them a reason to say “no”. So they played “keep up” or “yes” to every night out, vacation or opportunity that came their way, instead of focusing on what mattered most. Of course, it’s very hard to do that when you don’t know what you’re working towards.

The girls knows when they find themselves wanting to take money from their save jars to ask themselves, “Will this bring me closer or further away from my goals?” This helps them slow down and forces them to consider whether this flashy new item is really worth delaying or not achieving something that really, really makes their heart happy. And it makes this Mom’s heart incredibly happy to say that her girls have become pro’s at doing this. They walk away without feeling deprived or begging Mom to buy it for them.

3. Demonstrate Good Money Behavior to Your Kids

Our words and actions need to be in alignment. When they don’t match, our kids notice and will call us out or worse—stop listening to us. And don’t think they won’t notice. It surprises me how much Lauren and Taylor pick-up from just watching me. I’ll catch them mimicking a behavior or phrase I used, which is why I am so careful about how I talk about money at all times. I want them to build a positive relationship with money, not a fear-based one.

Talk to Your Kids about How You Make Decisions in the Store

One of the best ways to help your kids learn how to use their money is to let them see how you do it. Don’t internalize your decision process, share it with them. Why do you spend more money on some items and less on others? How do you decide how much you can even spend? Don’t hide this from your kids but involve them in the process.

Let Them See You Honor Your Goals

Just because we are adults doesn’t mean we no longer want things. We most definitely do. So when you find something you want, ask yourself out loud, “Does this bring me closer or further away from my goals?” And choose in favor of your goals with a smile.

Show Them How Good It Feels to Achieve Your Goals

We live in a world that loves instant gratification, so saving for something flies in convention of everything marketers have ingrained in us. Show your kids that it feels even better when you achieve a goal and can buy something you truly want. Take them with you so they can witness your joy at buying something you saved diligently for. Remind them frequently of how good it feels to achieve a goal.

Admit Your Past (or Current) Money Mistakes

Nobody is perfect. Every single one of us has a few money skeletons in our closet, admittedly some may be larger than others but we are not perfect. And our mistakes, no matter how big or small, do not make us bad. Be open with your kids and let them know about past mistakes and why you don’t want them to repeat them.

I’m Still Scared to Talk to My Kids about Money

First, don’t feel bad. This is unchartered territory for lots of parents. And I’m also guessing one of the reasons you may still feel scared is because you have debt and don’t quite now how to talk to your kids about it. My series on talking to kids about debt that is a great place to start, and I’ve also invited my good friend, Laurie from The Frugal Farmer to share with us on Wednesday how she and her husband talked to their kids about family debt.


The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.

April 28, 2014  •  35 Comments  •  Children and Money

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  1. Monday, April 28th, 2014
    Teaching my kids about money so they don't make the same mistakes my wife and I have is HUGE with me. I take every opportunity I can to do so. The one thing I know we can do better on is being better examples - allowance day is on Friday, but I don't always give them their allowance on Friday. While this doesn't seem to be like a big deal on the surface, I worry it's teaching them something (incorrect) about paying their bills on time.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      It makes me very happy, but not surprised, to hear that it's a priority for you and your wife. It does seem like something small, but like you said, it can create an unintended message too. On pay day we like to review our goals as well, which turns into a bigger event and harder for me to inadvertently skip.
  2. Monday, April 28th, 2014
    As you know, we talk about money all the time in our home, and we have been for the past three years with our son, and it is amazing how much he has evolved in his relationship with money just by the regular conversations. Just as we want our kids to feel free to talk to us about anything, we should want and encourage them to talk to us about money, the good, the bad and the ugly.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      I've experienced the same thing with my girls, Shannon. I am regularly amazed by how much they grasp, both things I have talked to them about and from just observation. It's my hope too that through these regular conversations that my girls will always feel comfortable talking to me about money, even after they make a mistake. Actually, even more so after a mistake, so we can figure out a solution and move forward.
  3. Monday, April 28th, 2014
    This is a great post and some solid advice for parents. Like I've said in the past, one of my greatest fears is NOT teaching my children about money, or not teaching them the right things. I can see how it would be hard to admit your financial mistakes to your children but I think if you discuss those things with them it can have a long-term (positive) impact.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Thanks, DC! The fact that you fear not teaching your kids about money means that you will do a GREAT job teaching them about money because it is such a priority for you. And I am quite sure that your future babies will be budding entrepreneurs like their Dad, so I suspect money will be a frequent topic discussed in your home. It is difficult to admit money (or any) mistake to our kids, but it does have an impact. And if we can help our kids avoid making the same mistakes, then it is worth some uncomfortableness.
  4. Monday, April 28th, 2014
    Another awesome post, my friend. As you know, this is hugely on our hearts, so that our kids don't have to make the mistakes and go through the pain due to money mismanagement that we went/are going through. It's vitally important, on SO many levels, that we all help our children build healthy relationships with money. Thank you for all that you do to support this mission.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Thanks, Laurie! Helping our kids build a positive relationship with money is so important. Sadly, most people don't have a healthy relationship with their money. Too often their money controls them, rather than them controlling their money. You and Rick are doing a great job teaching your kids about money and showing them what good money management looks like.
  5. Monday, April 28th, 2014
    Solid post Shannon and you know that I agree that it shouldn't be kept to a measly 30 days on the calendar. :) As our kids get older I get to see everyday how much they pick up from me and it's downright scary at times. ;) That's such a huge encouragement and challenge to us as parents to use that for good in their lives. I know it can be scary, but the great thing is you can accomplish so much just by starting with those simple everyday moments and it takes little to no effort.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      It can be scary somedays when you see kids your mimicking you! You start wondering what things you unintentionally taught them. :) But it is good motivation to change our own behaviors. I know that I am very careful about how I talk about money in front of the girls and expressing daily gratitude for the things we have. And it is so easy to get started because you're just talking to your kids about how you think about money, how you make decisions, what your priorities are. It's great that you and Nicole are already having these conversations with your kids.
  6. Monday, April 28th, 2014
    Great post. I'm with of my fears is that my kids will be bad with money as I see so many people struggling with their finances. I probably need to work on talking and teaching about money (luckily I still have time). While being a good role model is important, I think it's also important to explain your financial decisions. I've seen kids of frugal parents reject that way of life once they make their own money. That's probably a big fear of mine.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Thanks, Andrew! It is hard when we see so many people struggling with money and to me that is even more motivation to talk to my girls, so hopefully they won't have the same struggles. You do have a couple years before baby LRC starts observing you. :) The "why" is one of the most critical pieces to share with your kids when it comes to making decisions. And it's too often overlooked, even by frugal parents. And when kids don't understand the why behind the "no", it's very easy for them to feel they are deprived (even though they are not) and some will always tell themselves "yes" when they have their own money. Even if kids don't agree with the "why", they at least know there is a solid and thoughtful reason behind the "no". Otherwise it just seems arbitrary.
  7. Monday, April 28th, 2014
    I wish my parents had talked to me about money more when I was a kid. These are some great tips Shannon.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      I hear this all the time. The good news more and more parents are starting to have these important conversations with their kids, which makes me very happy.
  8. Monday, April 28th, 2014
    For those parents that think kids aren't interested in this are 100% wrong. The students I teach in personal finance class are hungry for money related advice. Most of them have not been taught at home and they are frustrated by that. If you don't teach them, they will pick it up somewhere else and it may not be what you want them to learn.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      I can only imagine how hungry your students are for this knowledge and I am grateful that you are there to share your knowledge with them. As I've said before, kids realize how important money is and they want to know how to use it. And you're 100% right - if we don't teach them, they will either learn by trial and error or from watching someone else - neither scenario is optimal. If we truly want our kids to succeed, and most parents do, then money has to become a part of the conversation.
  9. Monday, April 28th, 2014
    Goals guide our money decisions and we need to honor our goals. Love that. True for anyone at any age.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Thanks, Stefanie! And yes, a good motto for any age. You follow that simple rule and you're already in a better place financially.
  10. Monday, April 28th, 2014
    These are great points. One can never start talking with their children too early about money. The sub-topic and presentation style may just change over time.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Thanks, John! No, you can never start talking to kids too early about money. The sooner you start the better. And absolutely, as they grow older, you can introduce more complex financial concepts to them.
  11. Monday, April 28th, 2014
    Another great post from the lovely Shannon :)
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Thanks, Mackenzie! :)
  12. Monday, April 28th, 2014
    Hi Shannon,

    I wish I had talked to my kids about money when they were little but I feel like I did okay getting back on track and the life lessons certainly help prove my point.

    Thanks for sharing this post with us. I hope this new week is off to a great start!
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Hi Corina,

      You're doing a great job now and that's what matters. And the fact that you're talking to kids now is already making a difference from the stories you shared with me. They also know that money is a topic they should discuss with their future children and current children (congratulations on the new grand baby!) too. I hope you're having a great week and that Mario is recovering well too!
  13. Monday, April 28th, 2014
    It's really interesting how asking yourself “Will this bring me closer or further away from my goals?" can be so relevant for many life decisions! It can take some time, or something to ask constantly in my case, but hopefully over time it becomes somewhat second nature.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Very true, Anna! It's a good question to keep top of mind and has saved me from making an emotional decisions that don't support my goals. Just that simple step forces you to slow down and recalibrate. It does become easier and soon it will be second nature to you!
  14. Monday, April 28th, 2014
    While I don't have any kids yet, I definitely want to teach them about how to have a healthy relationship with money. I don't want my future kids to be controlled by money and material possessions. While these are the values I want to instill in my kids, I'm not even going to act like that is easy or that I would know how to actually teach kids that. Hopefully we will find a way though!
    • Shannon Ryan
      Tuesday, April 29th, 2014
      A healthy, positive relationship with money is important at any age. If we can help kids develop one at an early age, we help set them up to succeed later in life. It's not easy, per se, but it's also not as hard as I believe many parents fear it is. I know once you have kids, Liz, that you will do a great job helping them build a healthy relationship with money.
  15. Monday, April 28th, 2014
    I believe if you wait too long to talk to your kids about money, you risk either them not paying attention because they are already to the age where parents are lame or you've maybe set bad habits that might take years to change. Talking about money, growing up, body issues, peer pressure, etc is much easier to talk about from an early age. It's not always super fun to explain why adults grow hair under their armpits (questions like this usually come in public places) or why people smoke in public or why some kids are allowed to have iPads in first grade, but I think if I just try to answer as honestly and age appropriately as possible it will make it much easier down the road. At least I hope!
    • Shannon Ryan
      Tuesday, April 29th, 2014
      I agree, Kim! The earlier you start the conversations the easier it is. They don't have negative habits or beliefs you need to change and are still at the age when they listen to Mom and Dad. And yes, the questions they ask in public can be half mortifying and half hilarious! :) Being honest with your kids and explaining the "why" can make a huge difference in their lives.
  16. Tuesday, April 29th, 2014
    I have a seven-year old daughter, at her very young age, I slowly talk to her about money. She's not like the other kids that the same with her age that wants to buy toys and even clothes. During her recognition, I wanted to buy her a new pair of sandals, but she refused because she told me that her old sandal is still fine.
    • Shannon Ryan
      Tuesday, April 29th, 2014
      That's so sweet, Marie! It's great that she's already money conscious and so thoughtful. It sounds like she's well on her way to developing a healthy relationship with money with just a little coaching from her Mom. :)
  17. Tuesday, April 29th, 2014
    I don't have kids, but one day, I hope to! I do remember my dad teaching me quite a bit about checking accounts and such, but most of what I know now, I kind of just learned through trial and error. I know when I do have kids, I'll be teaching them a lot from a young age!
    • Shannon Ryan
      Tuesday, April 29th, 2014
      Yes, so many of us learn from trial and error. While there are times that can be a good thing, when it comes to money, I would prefer to make sure my girls have the tools and knowledge to make good decisions by the time they leave home. Trial and error can be quite costly when it involves money management. I have no about that you'll help your future kids build a healthy relationship with money.
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    "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