During a family ski trip to Mammoth this past winter, my youngest daughter, Taylor, came running into our room with big tears rolling down her cheeks and sobbing hysterically. Like any good Mom, I quickly ran to her to find out what caused this avalanche of tears. The culprit? A broken iPod Touch.
Apparently, when Taylor got out of the car and shut the door, it didn’t completely close. So like any typical 7-year-old, she reopened the door and slammed it shut with all the strength in her little arms. Of course, the resounding crunch made it apparent that something had been blocking the door. And to her great dismay, it was her beloved iPod Touch.
Now, I was feeling a variety of emotions at this time. Relief that she was okay and it was just a broken gadget. Annoyance at her carelessness since it was an expensive toy she broke, but strangely enough—I also felt a great sense of pride too.
You see, she wasn’t crying and begging me to buy her a new iPod Touch. Through her tears, I was able to make out that she was upset because it would take more than a year, maybe even two years, to earn enough money to replace it herself.
She didn’t expect Mom or Dad to automatically march into the nearest store and replace it; she knows there is no credit card fairy. She would have to work hard to earn the money to buy the things she wanted, just like Mom and Dad do.
As I sat with Taylor, comforting her and explaining the ramifications of her accident, I had to stop myself from picking her up and dancing us around the room. Even though I wasn’t happy with what she had done, I was incredibly pleased to see how our money conversations had instilled such good values and money habits within her.
After all, that was my intention.
You already know that I’m a huge advocate of regular money conversations with kids and believe money should not be a taboo subject within families. This is why. My daughter is 7 years old and unlike many kids her age, her first thoughts weren’t how can I get Mom and Dad to replace my toy, but instead, how am I going to earn the money to replace it myself?
Now, before you start grumbling that kids shouldn’t have to worry about money at her age, be rest assured that Taylor has a wonderful life and knows it. I don’t want Taylor or Lauren to worry about whether or not we can afford to pay our mortgage or buy groceries, which is why I avoid using the phrase, “We can’t afford it” with them. Kids can be very literal (here are more money phrases you should avoid telling your kids).
What I do want and expect the girls to understand is how to handle their money. How to give it purpose (through their save, spend and share goals) and to use that purpose to guide their money decisions. To understand money is earned and finite, so they need to use it on the things that truly matter to them in order to live a “rich” life on whatever amount of money they have. To know the true power in money lies in how you use it.
This doesn’t happen because I cross my fingers and hope they learn these valuable lessons. They became Money Smart kids because I talk to them about money during everyday regular activities and demonstrate good financial behavior.
And it’s paying off.
Some parents shy away from these conversations because they don’t have the time, which is often code for they don’t know how to talk to their kids about money. Don’t stress out! It’s easy and fun and you don’t need to be a finance expert to have these conversations or even set aside specific time to talk “money” with your kids.
If you don’t know where to start, let me help you out. I share some great money conversation starter tips, here and ideas for summer money activities, here. My book, The Heavy Purse and its companion e-workbooks also provide you with the tools to teach your kids about money. If you’re unsure how to set goals as a family or individually, then please check out my video series on YouTube.
I am proud to raise Money Smart girls and it started through conversations and setting goals. I hope you’ll join me in raising Money Smart kids of your own.
Shannon
SHANNON RYAN, CFP®
I remember my first roomie in college. Her parent's paid for everything. Her goal in life was to graduate (because she was told she had to) and then find a husband. The other thing I noticed with her was that she didn't value the things her parent's paid for. One weekend, after visiting her family, she came back to our apartment with a car they bought her. It was used but still...on Monday morning we were pulling out of our underground parking and she slid the passenger side of her car up against a concrete beam. Do you think she stopped to see what happened? Do you think she cared?
Maybe this story will be Taylor's own "origin tale" about her relationship with finances.
And I do have to say that your advice is right on. I've been talking with Marisa about finances and now she's even helping me pay for her extra curricular activities expenses, which can get pricey. I'm proud of her and she's becoming money savvy herself.
When she was in first grade there was a book fair at her school. She wanted a $25 book but all I had was $10. I told her get a $10 book because "I can't afford the other". Girl she told her teacher "my mom said I can't get this book because we don't have money." I wanted to DIE! LOL.
I never used that term around her again! Have a great day hon :)
Growing up, my parents never really instilled any hard money lessons, aside from the notion that have debt was normal and that it was okay to splurge on nice things when you had money. Not the best start to my financial life. I love my parents, but I do wish they had been a bit more responsible financially.