Children and Money

Part 3: How To Raise Financially Confident Kids

Part 3: Raising Financially Confident Kids | www.TheHeavyPurse.comThere are many things that make me proud of my family, including that money has never been a taboo topic in our home. Now some of you may think because I’m a Certified Financial Planner (CFP®) that money would never have been a taboo topic in our home, so it’s not a huge achievement. Not true.

Sure, I can talk about complex investment strategies with the girls, which has proven to be an unpopular dinner topic by the way, with greater ease than most parents, but that’s not the kind of conversations we have around money anyway. I know many parents with finance backgrounds who struggle to talk to their kids about money, partly because we make it much more difficult than it really is. At its core, money conversations are just you explaining the reasoning behind your money decisions to your kids. It’s truly that simple.

Of course, the mere thought of doing that stresses some parents out as well. In most of those instances, I suspect they are making a decision that doesn’t hold-up under scrutiny. It is an emotional decision, an “I deserve this” moment, versus a value-based decision that you feel good about making and want your kids to emulate. If you have to justify or don’t want to explain your money decisions, I would take that as sign you should slow down and confirm your decisions are in alignment with your values and goals to avoid any regret later.

The End Goal: Kids Have a Healthy Relationship with Money

There is a popular misconception that we don’t develop a relationship with money until we are adults, earning a paycheck and paying taxes. This is not true. Our relationship with money begins when we are young children observing Mom and Dad and their money silence (or money arguments) and their “keep up” decisions. What kids observe isn’t the whole story, but it is what they often remember and mimic. This is why it is so critical that we don’t put off these important talks and give our children a 360 degree view on how we use money.

[one-third-first]How To Help Your Kids Build a Healthy Relationship with Money |[/one-third-first][one-third]Help Kids Find Their Financial Happiness |[/one-third][one-third]Teaching Kids Your Family Money Values |[/one-third]

In Part 2 of my guide to raising financially confident kids, I provided some tutorials to help you talk to your kids, big and small, about money. Today, I’m going to highlight more teachable moments for you to utilize and other essential money and life skills your kids need to learn.

Finding Teachable Money Moments

Money talks are rarely sit down, serious talks or lectures. In fact, unless the topic is very serious, you should avoid making them feel like lectures. They should be conversations where you dialogue with one another. Where you kids feel you are open to answering their questions and hearing their opinions. Some of my best conversations with the girls have been spur-of-the-moment talks that were brought on by a comment they made. Pay attention and look for those moments and soon you’ll be having regular money talks with your kids.

[one-fourth-first]Teachable Moments: Talk to Your Kids about Money |[/one-fourth-first][one-fourth]5 Holiday Teachable Moments for Kids |[/one-fourth][one-fourth]4 Family Vacation Money Lessons for Kids |[/one-fourth][one-fourth]Back To School Shopping Teachable Money Moments |[/one-fourth]

You may have noticed a certain amount of repetition in the money lessons I teach Lauren and Taylor, which is by design. We need to hear things multiple times before we truly understand and learning how to make good choices with our money is no different. It’s not a one and done conversation. Seeing their father and me be consistent with our money decisions reaffirms what we tell them. We do practice what we preach, and the girls notice when our words and actions are out of alignment.

Other Essential Life and Money Skills

Life skills, of all varieties, are important to me and they often get overlooked in favor of academics, which also matter to me. I fully believe that academics and life skills complement one another and lacking one or the other puts our kids at a disadvantage.

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Troubleshooting and Answering Your Questions

On Friday, I will conclude with some troubleshooting tips and answering common questions that I receive around talking to kids about money. If you have a question you’d like me to address, feel free to leave it in the comment section below.

What teachable moments have you found work best for you? What changes have you seen in your children after your money talks?


November 9, 2015  •  20 Comments  •  Children and Money

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  1. Monday, November 9th, 2015
    I have always found it best to talk with my children about money with things they were interested in. When they were of age to get cell phones it was a good time to discuss overall cost, monthly cost, how many hours would you have to work to pay for it, etc. It was a active discussion because it was a money topic they had interest in. After having a few discussion like this i can see they have a better understand of the value of money.
    • Shannon Ryan
      Thursday, November 12th, 2015
      That's the absolute best way to engage in money conversations with kids, Brian. When you can dialogue with them on something they want, whether it's a cell phone or a new toy or a trip to Disneyland. They actually pay attention and learn.
  2. Monday, November 9th, 2015
    I love that the end goal is to have a healthy relationship with money -- not something else, like to build wealth. Life will surely bring ups and downs and having a health relationship with money can be the best foundation during hard times.
    • Shannon Ryan
      Thursday, November 12th, 2015
      Absolutely, Natalie. At the end of the day, what I want most for Lauren and Taylor is that they have a healthy relationship with money and make confident, value-based decisions. If they have that - then they have the foundation to create the life they want for themselves and survive in both good and bad times.
  3. Monday, November 9th, 2015
    I feel like my oldest child has a pretty good grasp on what money means. She is constantly looking little toys she wants (Shopkins, Live Pets, etc.) on Amazon then checking other online stores to see if she can find a lower price. Then she asks me to buy them and I say "no." It's still really cute, though!!!
    • Shannon Ryan
      Thursday, November 12th, 2015
      I love that she is comparison shopping and looking for the lowest price on her favorite toys. I wonder where she saw someone else do the same thing! ;) More proof that kids pay attention to the things we do and say.
  4. Monday, November 9th, 2015
    "We need to hear things multiple times before we truly understand and learning how to make good choices with our money is no different." We take a similar approach with our kids. Children are such concrete thinkers, and as such we've found those repetitive and tangible lessons to be the most effective for our kids to truly begin to grasp something.
    • Shannon Ryan
      Thursday, November 12th, 2015
      I agree, John. Kids are very concrete and literal thinkers, which is why we need to repetitive and mindful of what lessons they could be learning when they observe us. I know you and Nicole do a great job of demonstrating good money behaviors and a healthy money mindset.
  5. Monday, November 9th, 2015
    I know as my daughter gets older, we will definitely be having money conversations that involve what other kids are wearing and/or doing. I am glad that at this point, kids don't really notice what everyone is wearing or if kids are wearing the same shirt twice in one week or anything. Yay for kindergarten! ;)
    • Shannon Ryan
      Thursday, November 12th, 2015
      My girls are definitely now at the age where they do notice brands more. Before, as long as they liked it, that's all that mattered. Now they pay attention more to what their friends wear, so we've had some good conversations around that. You will some day too and definitely enjoy this time with your daughter in kindergarten. It's such a fun age!
  6. Monday, November 9th, 2015
    I would think now with technology and apps, that you could make saving money actually fun and like a game. I think anytime you can make it fun plus learn an important lesson is the way to go.
    • Shannon Ryan
      Thursday, November 12th, 2015
      That's an excellent suggestion, Tonya! And I agree wholeheartedly, the more fun you can make money talks, the easier they are and the more kids pay attention.
  7. Monday, November 9th, 2015
    I think I will greatly struggle with making money lessons not feel like lectures! I'm such a by the book guy that I can see myself sitting my kids down for a lecture every once in a while about a money topic. They'll probably hate it, so I should probably talk myself out of it now before I even have kids ;) I like the "teachable moments" concept and I'm sure it's far more effective.
    • Shannon Ryan
      Thursday, November 12th, 2015
      I'm a right brain, by the book, person too, DC. So if I can do it - you can too! :) Definitely go with the teachable moments because it will help minimize the "lecture" concern, plus they truly are the easiest way to talk to kids about money.
  8. Monday, November 9th, 2015
    We regularly have money talks about with other serious talks with our daughter. There is nothing taboo in our house. That is the way my wife was raised. I was not, but I really like the openness. My daughter is still trying to grasp the concept. To her money is green paper, but the one thing that clicked was when we made her save money to buy her own scooter. She has always wanted one and most kids had them but we asked her to save her money. She had a small chart of how much she needed and all of a sudden started guarding her money and asking about ways to earn money. Then my wife saw an ad with a scooter that was on sale. All of a sudden she didn't need more money, she already had enough because it was "on sale." We taught her that you don't need to pay full price and should look for a discount. We went to the store and let her pick it out and she pulled out her little purse and gave the clerk the money. She guards that scooter with her life compared to her other toys because she used her money. We talk a lot but once money became real to her it changed the "money talk" completely. Hopefully that will be a long term lesson.
    • Shannon Ryan
      Thursday, November 12th, 2015
      I love this, Lance! This is a great example of the power of money talks with kids and not allowing money to become a taboo topic. Your daughter now understands that money must be earned and the value of saving and waiting for sales, which are all powerful lessons for kids to learn. Like you said, talking is very important but also making it real is when it really drives the lesson home. Great job and thank you for sharing your story with us.
  9. Monday, November 9th, 2015
    Can;t believe your girls don't like discussing investment strategies at the dinner table! I think you can find teachable moments all the time. For my family, it works better if we talk about relevant situations as they arise the same as we would talk about any other topic. School activities seem to be a big one right now as they are always selling something and we have to choose how and when to spend out money and if the cost of today's purchase is worth sacrificing tomorrow's goal.
    • Shannon Ryan
      Thursday, November 12th, 2015
      I know - it shocked me too. :) I agree when you can tap into relevant situations on things your child cares about, they listen and engage, which is exactly what we want. School activities is a great example and one that every child (and parent) can relate to as well.
  10. Wednesday, November 11th, 2015
    Whenever I talk to my kids about money, I assure that they feel at ease and are in a good mood and I present myself in a nicest way possible so that it helps them feel like they are having fun in our conversation because I believe less emotional barrier would make them understand what I am telling them more easily.
    • Shannon Ryan
      Thursday, November 12th, 2015
      You're doing it absolutely right, Jayson. If you speak about money in a positive way, kids will respond more positively. Kids are very good at sensing emotions, so making conversations fun and low-key, help them relax and dialogue with you. Great job!
  • 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