Children and Money

Teachable Moments: Talk to Your Kids about Money

Teachable Moments: Talk to Your Kids about Money | www.TheHeavyPurse.comI am a huge advocate of talking to your kids about money. For some, I know this is a difficult conversation. You might be unsure what to teach or don’t feel confident being the teacher given your current financial situation. I sympathize with your predictament, but there are many excellent resources available that can provide you with the tools and information you need, including right here at The Heavy Purse.

Even more importantly, I encourage you to reframe your mindset. You may not be a financial expert today, but there is no reason why your kids can’t join you on your journey to financial literacy. In fact, learning how to make good choices together as a family, can be incredibly powerful.

Take Advantage of Every Day Activities to Talk about Money

A few weeks ago, I shared with you a recent money conversation I had with my youngest daughter, Taylor. When I invited her to join me for an afternoon of running errands, talking to her about money was not on my list of to-do’s. But she wanted to talk about money, so we did. Those teachable moments are something I look for every day.

When your kids are young, the conversations may be simple, but they remember what you tell and demonstrate to them. My girls are 7 and 9 and have a clear understanding of how money works. They know money needs to be earned, should have a purpose (goals) and most importantly—they understand the difference between “want” and “need”.

We’ve all been in a store where a child is throwing a temper tantrum yelling “I want!”. After we blow out a sigh of relief that it’s not our child going into a nuclear meltdown, we need to ask ourselves how we are addressing the “I wants” with our kids.

Because we never outgrow the “I wants”. We will always find things we covet, even if we no longer throw a temper tantrum in an attempt to get someone else to buy it for us. Instead we pull out a credit card and buy it ourselves, even if it means going into debt. The key to stopping this cycle starts with some simple conversations.

Talk Out Loud

When you’re at the store, don’t make internal decisions but share with your kids how you decide what to buy. From the food you purchase—when is paying a premium okay? When is store-brand the right choice?—to the clothes you buy. Ask them for their opinions—you may be surprised to learn what is important to them and what’s not.

Yes, this takes more time to do, but it’s worth a few extra minutes in the store. Some day they will be shopping for themselves and will be able to make better decisions because you took the time to do this. But your good example doesn’t mean as much when they don’t understand the rationale behind your decisions.

Share Your Goals

We set annual family goals, but we also have individual save, share and spend goals. Don’t keep your goals a secret. When you see something you want at the store, tell your kids you want that item, but are going to chose in favor of your goals instead. Let them see how easy it is to say “no” and how good it feels to honor your goals.

Give Them Choices

The simple truth is we cannot always have everything we want. Money is finite. But within the money we do have, we can choose how we use it. One way we do this is with our entertainment budget. It’s great way to give the girls options on how we spend our fun money. For example, the girls really wanted to see Taylor Swift in concert. So we priced out four tickets, but then I told the girls we could instead stay at one of the Disneyland hotels for 3 nights for the same price. They chose 3 days of fun over a few hours. 🙂

Play “I Want”

Yes, you heard me right. Have your children create a list of the things they want. Now make them flex their decision-making muscles and figure out which item they really want and makes their heart happy. The last item standing becomes their save goal, so whenever they get the “I wants” in the future, you can remind them of their save goal and refocus their attention on achieving that goal.

My girls rarely get a case of the “I wants” these days and almost immediately upon finding something they want, they don’t ask me to buy it for them, but start debating whether to add it to their wish list, buy it now (with their own money) or walk away. More often than not—they walk away and do not feel deprived.

Financially Confident Kids Become Financially Confident Adults

None of these conversations are difficult nor do you need to be a Certified Financial Planner to have them with your kids. In fact, we all enjoy these conversations and the girls truly take them to heart.

Recently I was walking my daughters to school with a group of their friends and moms. Everyone was talking about a friend’s home and how gorgeous it was. They all wanted to live in a house just like it when they grew up. Then Lauren told everyone that she really liked her friend’s home too, but she wouldn’t want to live there if it meant she couldn’t afford to travel because that’s what makes her heart happy.

My smile might have gotten just a little bit bigger as I walked my two Money Smart girls to school.


April 22, 2013  •  30 Comments  •  Children and Money

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  1. Monday, April 22nd, 2013
    Great story about the walk to school, Shannon!!! Those girls of yours certainly are on the right track. :-). I love the idea about the "I want" game. We'll be playing that one with our kids today!
    • Monday, April 22nd, 2013
      Fantastic, Laurie! I'd love to hear your experiences. The girls have become so good at figuring out what they really want. They still get tempted by things they see in the store, but rarely do they find something more important than their original goals. It's a good lesson to learn young. They don't feel deprived and so many times we buy things as adults because we felt deprived as kids.
  2. Monday, April 22nd, 2013
    Great post Shannon! I love the walking home story as it shows that the lessons you're teaching and living out are becoming concrete for your daughters. I also love the talking decisions out with your children and why you made them. We started that several years ago with our oldest and it really does help them understand over time.
    • Monday, April 22nd, 2013
      Thank you, John! Kids really notice when you don't walk the walk, so I try to set a good example for my girls. I think many parents miss such an easy way to talk to kids about money and shape how they use it when they make all their decisions internally. Those conversations are fun and it always fascinates me how the girls think.
  3. Monday, April 22nd, 2013
    Very nice post Shannon! And those are easy ways to teach kids about money. Practical ideas that they can relate to and practice based on what is currently going on in their lives. They are not worried about saving for big stuff, but small things, like a concert, and such. Although, having said that, it sounds like your daughter already knows what type of house she will have and how she plans to spend her money on travels :-)
    • Monday, April 22nd, 2013
      We are family that LOVES to travel. :) Money comes down to choices and I've really been working with the girls to help them see all the different choices they have and how they can make the right decision for themselves. Lots of us get ourselves into trouble keeping up with the Joneses, but a good portion of the stuff we purchase to do so - means very little to us. So it's even more wasteful! I want them to spend their hard-earned money on what makes them happy and know when to compromise.
  4. Monday, April 22nd, 2013
    I like the Swift/Disney question, it puts any purchase into perspective. Although now you are in for a Disney trip you may not have planned if Swift was not in concert :)
    My friend has asked his kids if they wanted cable TV or a premium subscription to an online learning/playing site. They chose the website and learn as they play instead of passively watching TV.
    • Monday, April 22nd, 2013
      I frequently give the girls choices on how we spend our weekend - granted not every weekend is a Taylor Swift/Disney trip option! But I want the them to understand how much things cost and see the various ways we can use that money. I love that your friend did a similar thing and the kids picked a playing site. Now they're learning and I bet they don't complain about the lack of TV because they got to choose. My girls are very good after they make a choice about not begging for more.
  5. Monday, April 22nd, 2013
    Great story Shannon! Your daughters are lucky to have a mommy that teaches them such great money lessons :)
    • Monday, April 22nd, 2013
      Thank you, Mackenzie! I appreciate your kind words. Once your daughter is a little bigger, she will have a mommy that gives her great money lesson too!
  6. Monday, April 22nd, 2013
    Your girls are so lucky to have a mom who is instilling great money lessons and values into their lives. Clearly, they are getting the message. Way to go!
    • Monday, April 22nd, 2013
      Thank you, Kerry! I certainly feel blessed to have my girls and want to do my part to help them thrive in this great big world we live in. When the girls do something on their own that shows their paying attention and taking our conversations to heart - I get such a kick out of it. I'm sure you feel the same with your boys too.
  7. Monday, April 22nd, 2013
    Great post. Do you think that we should use real financial language/situations to teach financial lessons to our younger kids, or use hypothetical situations without the awkwardness of money?
    • Monday, April 22nd, 2013
      Thanks, Mike! Great question. Generally speaking, I use real financial situations, but it also depends on the circumstance and the age of the child. If you are getting into more personal numbers, it's understandable that you don't want your child sharing that information with everyone. So definitely wait until your child understands that talking about money isn't taboo, but it's not appropriate to share personal information outside of the immediate family. Additionally, if the conversation is something scary that may cause stress, I would definitely speak in very general terms to a younger child because you do not want them to become fearful about money either. If it's an older child, it certainly may be appropriate to be more specific, especially if you want to make a point about credit cards, budgets, etc.
  8. Monday, April 22nd, 2013
    At least they're learning the difference between priorities (house versus traveling) at an early age. My parents talked jack squat about money when I was a kid, an after -- it set me back quite a number of years while I struggled to figure it out.
    • Monday, April 22nd, 2013
      Thanks for stopping and commenting, Mochimac. I appreciate it! Unfortunately, too few parents talk to their kids about money, which is something we need to change. It can definitely make a difference so I started talking to my girls about money before they formed any bad habits or beliefs around money. It seems to be working! :) They find a lot of joy in saving, sharing and spending their money, which makes me very happy!
  9. Monday, April 22nd, 2013
    Awesome post Shannon. Teachable moments need to be taken advantage of. You don't get a lot of them, but you have to make each one count. Getting a hold of the "I wants" is extremely important because many don't have control of it now.
    • Monday, April 22nd, 2013
      Thanks, Grayson! It's so easy to overlook these teachable moments, but we, as parents, need to grab ahold of them and use them to our advantage. Because the conversations are kept fun and light, my girls listen and engage with me. But if I lectured them, their eyes would eventually glaze over and they wouldn't pay as close of attention. :) I agree if you can get the "I want's" under control and not make them feel deprived - you've scored a huge victory that will have an even bigger impact when they are on their own and making money decisions with you.
  10. Monday, April 22nd, 2013
    I'm so glad I didn't have to go through those "I want" phases, my kids were pretty good at that.

    It's when they became teens that it started. Looking back, I know we are to blame on that because while my husband and I worked all these crazy hours and the they were home alone we bought them anything they wanted to compensate for our absence. You can imagine the tough transition when I decided to work from home! :)

    Marisa is like your daughter, she's got it all planned out. She's determined to travel and has all these plans and I know she's gonna do it to. :)

    Great post Shannon!
    • Monday, April 22nd, 2013
      Thanks, Corina! I certainly can imagine it was a tough transition for everyone when you started saying "no". :) But it sounds like your kids adapted and learned some good lessons too. It sounds like Marissa has a bright future ahead of her too! Knowing what you want is a great motivator!
  11. Justin
    Monday, April 22nd, 2013
    It's so easy to take for granted simple tasks like purchasing a loaf of bread. But we learn fewer new things everyday as we age. Children on the other hand are constantly learning and experiencing new lessons so it's important to teach them. Even a task that appears to need no explanation to an adult might need to be discussed with a child.
    • Monday, April 22nd, 2013
      Absolutely, Justin! You just want to fill your cart and move onto the next to-do, but when you stop and explain why you buy the things you do, it starts to make sense to your kids. When Taylor and I were in the grocery store, we also compared the nutritional content to make sure we were not only be smart with our money but also buying food that was good for our bodies.
  12. Tuesday, April 23rd, 2013
    That is so cute that she wants to travel!

    That is a really important moment, I think. She realizes that she may have to give a few things up ( a bigger house) in order to have money to do the things she really wants to do. That is a great fundamental lesson!
    • Tuesday, April 23rd, 2013
      The girls love traveling as much as their parents do. :) I was so proud of Lauren because she absolutely understood what I've been trying to teach her - it's boils down to looking at your options and figuring out which one makes you the happiest. She can still have a nice house and travel, but if she uses all her money to buy the fanciest house, then she won't have the money to travel, which she really wants to do.
  13. Tuesday, April 23rd, 2013
    You talk and explain and try to teach the little ones and wonder if it ever will sink in, and then you get the moment like that with your daughter and know it does. Makes it all worthwhile!
    • Tuesday, April 23rd, 2013
      Exactly! You pray and hope they are absorbing what you're telling them, and then they prove they are listening. It felt great and will keep me talking about money to my girls. :)
  14. Tuesday, April 23rd, 2013
    You are definitely the pro when it comes to teaching kids about money Shannon.

    You know I don't have young kids and none of my immediate relatives have young kids but I know that when my nieces and nephews do have children I hope your blog will still be around for them to read about all the wonderful suggestions you have and the game they can play to help them learn at an early age. It's just such an important topic that kids need to learn about early on.

    Thank you again for sharing such an important topic with us all.

    Enjoy your week young lady.

    • Tuesday, April 23rd, 2013
      Thank you so much for your kind words, Adrienne. They mean a lot to me! I certainly hope my blog is still around when your nieces and nephews have children and can help them guide a new generation of Money Smart kids. It is important for children to learn about money and the earlier you can start teaching them - the better! You have a wonderful week too, my friend!
  • 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