On 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.
These 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.
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]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]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]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
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