Talking to Your Kids About Money

So, last night our oldest, who is 8, asked us how expensive something was.....and our knee jerk reaction was to tell her that it really wasn't something we wanted to discuss and that asking questions like that was rude.

We've been raised to believe talking openly about money is taboo. It makes people feel bad, it sounds like you're bragging, or it's just WAY too much TMI. Plus, so many of us are "faking it" while drowning in debt, how would we ever have a truly honest conversation about finances? 

It's smoke and mirrors. 

I rethought our reaction to our 8 year old's question. What if we were more OPEN with our kids about cost, finances, money matter, debt, and those sorts of things. Not to bog them down with adult issues, but to prepare them for what they will eventually face.

I know, for a fact, that when I graduated high school I had no CLUE what most things cost.....in the "real world". I brought home about $170 a week at my job and I thought that was okay. I could pay my car payment (yes, I was 17 and had a car payment) and my gas and fun stuff and I thought that was good.

Then I had to move out on my own and....well....lets just say $170 a week will buy you a cardboard box and a spot under a bridge....and not much else.

So, here's some ideas about opening up Pandora's Box and having the "money talk" with your kids:

1. Don't be afraid to be open and honest

We had a bad reaction to our daughter's question. We shut it down. Parent Fail on our parts. We should have explained that some folks don't LIKE to talk about money, but that there really wasn't anything wrong with her question. How is she supposed to learn?

We have been looking at houses and have been honest with her about what they cost. I'm not sure if she has a concept of how much 6 figures really IS.....in terms of work....but she knows its more that she has in the bank : ) 

2. Introduce them to the concept of work = money

And do it early, because Lord knows if you don't you're gonna have a lazy, entitled beast of a child on your hands at some point. Who will be living in your basement. At 30.
One system suggests paying out a commission for chores...not an allowance. Allowance is free money for doing nothing. Commission is earned. Don't do the chore, you don't get paid.

3. Let your kid learn and fail

When we went to Disney, our 8 year old earned her own spending money. We tried very hard to guide her choices in purchasing, but the choices were ultimately hers. 

We beamed with pride when she decided NOT to buy something because she wanted to hold out for something better. #delayedgratification

I remember when I got my FIRST job ever....delivering newspapers....I got a check after 1 month of work. The check was about $250 if I remember correctly.

I took that check, cashed it and took it directly to my local Shopko and spent every penny.

Granted, I think I was 11 years old...but still......My Lord. 

A fail, yes....but I needed to learn from it as well. I only really look back on that now and shake my head. 

4. Explain credit and debt in terms they can understand. 

Perhaps if you LOAN them any money, like a dollar or two, explain that if you were a bank doing the same thing they would have to pay you back....and sometimes with MORE money attached as interest. So explain to them why this can be a slippery slope. 

Of course, these conversations need to be age appropriate. Your 4 year old doesn't need to hear about your Discover card woes. 

What they CAN start to understand is the concept of advertising and how things are not always as good as they say they are. Like airline miles. Or car leases. 

Also, let them SEE how debt hinders your life. Don't bog them down with adult issues, like I said, but we explained to our oldest that we were NOT spending a lot now so we could pay off debt and have a great life in the future....so she understands it's a marathon...not a sprint.


5. Work and Teen Jobs

I don't have teenagers....obvs....but I WAS a teenager and one thing I totally give my parents credit for is they always insisted I work. I wasn't going to sit on my butt hogging up all their food and housing without contributing to society a bit.

Plus, I needed to learn how to have a good worth ethic. How to show up...dressed appropriately...ready to do my job and serve my customer.

I had a TON of jobs as a teen: sub shop cashier, pizza joint waitress, Walgreens cashier, music store assistant manager....and I learned something from all of them.

Mostly that I wanted to be my own boss....

But hey, I learned! 

Maybe money talks are taboo BECAUSE we don't start early....and we often leave honesty to the wayside.

Let's make money talks like the sex talk: it HAS to be done....it has to be age appropriate....and it has to be HONEST.