For many parents, it’s hard to talk about money. Either you lack confidence, or you feel you don’t have the right skill set. In addition, there are many of us who haven’t had good role models on the subject. Yes, it can be tough. But, avoiding it doesn’t make it go away. Plus, it then makes it feel taboo and leaves your kids unprepared. I don’t think any of us want that. If you do a quick internet search, you’ll find several surveys that show people talk moreabout the three-letter “s” word than the five-letter “m” word. I’d contend that money might be more important because it touches our lives EVER SINGLE DAY.
If it’s important and you want to make it happen, how do you begin the conversation? You can’t just jump in and yell “BUDGET, SAVE and INVEST!”. It takes a bit of finesse along with a gut check. Can you be open, and can you dig deep and offer a big dose of honesty. Don’t worry. Kids are forgiving. They know a lot, but YOU definitely have more experience. So take a deep breath, because we have a couple of suggestions and comments about speaking to your kids about money…
#1: Take the tension out of the discussion
Kids understand that money can buy things. They’ve been exposed to the transaction at stores when you buy groceries, gas, gut crunchers, gizmos, and other things that start with a “g”. That’s because they’ve been around you as you run one errand after another. They pick up on things. Believe it or not, they’re smart too. Here’s where the warning comes in: they see what’s really going on. They can see (and feel) when you’re stressed out about money. They sense your anxiety when money is tight right before an important purchase or paying the bills. I do it sometimes. I have to admit, my stomach sometimes hurts when I spend money (who would’ve thought that?).
As a parent, we all bring our past beliefs, anxieties, pre-conceptions and other feelings into any conversation we have. That’s nothing new. However, when we show that money is a tense subject, guess what? Kids feel that and pick up on it. They’ll also use it to build their own beliefs on the subject. So, it makes some sense for us to evaluate our situation, and get help dealing with the “crap” we may hold on to. We really don’t want them to get the bad stuff, so it’s time to be adults about it.
#2: Talk WITH your kids, and hold a discussion, not a sermon or lecture
When it comes to teaching kids about money, the conversation doesn’t end with a one-time talk about allowance. Kids need ongoing exposure along with practical life lessons. It doesn’t have to be in EVERY situation either.
One huge reason for creating the podcast is to expose kids to money concepts. I can’t tell you they want to spend hours discussing the subjects we go over, but being exposed to the information can be a springboard. They hear something, get a bit curious and ask a question. I can also ask them questions if they understood what we discussed. Plus, you can teach kids that you don’t know all the answers and it’s OK for them to ask questions.
At some point, your kids will want to learn something about money. They’re curious. So, it’s not the time to dodge questions, diminish them by saying they’re not old enough to learn, or simply ignoring them. No more “the Great Oz” behind the curtain talking at us. Put the subject matter out in the open so everyone can participate in it.
#3: Do it a lot
Money has many facets to it. There are emotions, habits, choices, budgeting, and new scenarios all the time. I broke my hand tubing in the snow the winter after college. I choose a high-deductible health insurance plan. Rude awakening. It was a moment for my dad to teach me a bit about having an emergency fund and embracing the fact that things don’t always work out the way you anticipate (and can be expensive).
Now it would’ve been better to have already had an emergency fund. He had one. With 6 kids, something was always coming up. It would’ve been nice to have shared that info earlier (The Wedding Singer: That would’ve been good to know YESTERDAY!). But, he didn’t. Honestly, it would’ve been something good to know.
The point is that there are always opportunities. They don’t take long, but it should be on a regular basis, so they can get past the eye-rolling and snarky comments. They’ll know you’re serious, they’ll know it happens regularly, and they’ll know it’s time to get used to it. It’s not time to be their friend and be nice, but it’s time to teach them some stuff they need to know.
#4: Walk the talk
As mentioned before, kids can see right through you. If you live your life from the motto “Do as I say, notas I do”, you’re asking for trouble. Using coupons, making sandwiches instead of eating out, letting them know you have a budget (while saying “no” when it doesn’t fit), or showing you are investing wisely goes a long way.
My mom taught me the most about money. We are kindred spirits in that respect. I still remember her loaning me money for my first IRA deposit the first year at a “real” job. I got a nice little tax refund that paid her back and starting investing. What a great moment. She taught me something important about compound interest, helped me do it, and showed me that she “walked the talk”. I know we all have it in us to make it happen, because we love our kids, and they need our help.
#5: Remember that it’s never over
As a friend told me when my wife was about ready to deliver, he said “It’s forever dude”. How right he was. Even when the kids aren’t around, I think about them. Are they having a good day? Did the math test go well? Did that special boy or girl say “hello” to them today?
The point is that this discussion is never over. If it’s not a video game they want to buy in grade school, it’s clothing in high school. If it’s not money for high school, it’s for college. Then, it’s a job, house, retirement, their kids, holidays, and much much more. It simply keeps going. And, your job, just like being a parent, is NEVER over. Once you stop fighting it and embrace the fact you get to be a reliable source of great insights, it’s much easier to help out, while growing some awesome kids who can take care of themselves.
Now you have 5 insights to use when discussing money with your kids. It all helps to build the foundation of the financial journey that news to happen. We’ll get into more detailed stuff on the podcast and in other blogs. Just remember, if you’ve ever run a marathon, you have to get in the right mindset. The training is what happens daily. One step at a time. The more you expose your kids to concepts about money while trying to make it interesting, the better off you’ll be.