Back in the day, discussions about money might have been hush-hush in many households. Money matters were often seen as a private affair – and financial discussions with kids were even more taboo as there was a sense of pride and authority surrounding money. 

They meant well…but it ultimately led to a deep lack of financial understanding for the upcoming generations, as well as developing hesitation and avoidance around the subject.

By normalizing these conversations in the home, we can bridge those gaps and empower our young ones with the financial knowledge and skills they need to thrive in today’s world.  

Opening that Door: How to Get it All Started

As fellow parents we know how, well… awkward it is to initiate a new “lesson” or way of doing things into our children’s routine. Like any important change in life, it’s vital to have an intentional conversation about what is happening and why. This cultivates a deliberate and consistent understanding of the topic, rather than navigating confusion and dismissal.

You can begin, simply, by weaving financial concepts into everyday life. It should feel as normal as teaching your kids how to do chores and pick up after themselves. After all – it IS part of your lives and always will be.

Let your kids know that you know how smart they are:

• Stick to key concepts and keep the complex words for vocabulary lessons.
• If you think they don’t understand something, ask them to tell you what they heard in their own words.
• Invite them to interrupt and ask questions.

It’s shocking how much a simple introductory conversation will open their willingness to receive and ask questions about what’s going on around them. They know it’s safe to be curious, and they know you want to teach them. Believe it or not, the reason most kids don’t try to do more is because they sense that their parents’ expectations of them are lower than their capabilities.

I started teaching my son about money as early as age 4. The concepts and complexity increased over time, matching his cognitive capacity and grade level. First we learned about various ways he could earn or receive money and then what he could use it for. Finally, I helped him understand the tradeoffs he could make. He’s now 6 and he knows he can spend, save, give, and invest based on his own goals.

Learning by Observing: You’re Always on Stage

Children are like sponges, absorbing information from their surroundings, and they are always watching and listening! So, as parents, we hold a great deal of influence, shaping not only their behaviors, but also their attitudes towards many elements in life. This tends to give us the sense that we need to “hide” certain stressful topics from our children in order to protect them… but they can feel it.

And, let’s be honest, we all know that money can be a major source of anxiety for many: life changes daily, emergencies come up, it can get away from us quickly. At the end of the day, it remains one of the most important (and can be one of the most stressful) parts of our lives. It’s understandable to want to protect your children from feeling the effects of that stress, and we forget that one day our babies will be in the same position we are now. 

While you can’t protect them from feeling some stress around finances throughout their lives (especially not by avoiding it all together), you can prepare them to go out into the world confident and educated about their financial plan. Remaining honest and open to financial conversations will significantly reduce  the impact of money-related  stress on their overall wellbeing.

You may even be surprised that by navigating these conversations around little ears, you can gain a more healthy and positive outlook on your own finances as well.

Setting Kids Up for Success

It is important to focus on the basic fundamentals of financial success: living below your means, paying yourself first, evaluating needs vs. wants, etc. Learning financial accountability and the consequences of the decisions made is one of the most vital lessons we can teach them. When we love and care for our kids, sometimes we blur the lines of cause and effect. If they drop their ice cream while not paying attention to where they are walking, we are tempted to get them a new one because we don’t want them to feel pain or disappointment. But then, what happens later in life when they go on a fancy trip instead of paying their rent on time? 

It may seem like a delicate dance, but learning to delay that immediate gratification of the purchase early in life will help them control their financial impulses as they enter adulthood.

What is the first thing a 21 year-old would do with a large sum of money he comes into by surprise one day? In a household where financial discussions were not a part of normal daily life, you can be sure that it’s less likely to be something beneficial to his long-term goals.

A Special Note to Parents: This One’s Important! 

It all sounds so simple laid out in an article, we know – but the reality is that children are people new to learning how to exist in the world at a rapidly changing pace. They push boundaries, test limits, and don’t always understand the “financial decorum” we were raised with, which wasn’t necessarily good. Each one of us grows up with money behaviors based on our experienced, education, and belief system. 

Be prepared for your children to say things that trigger old conditioning and have a plan for how to navigate that within yourself.

Things like:

• “How much are you giving me?”
• “I don’t need to worry about that, I’ll have this.”
• “Why don’t you just get a better job?”
• “When I’m older, I’m going to do this.”

My son regularly tells me about the multiple mansions he’s going to build on an expansive acreage with different wings dedicated to each individual interest he has as a 10 year-old – I tell him to set aside a plot for me with a farm and a tree-house.

Remember to take a breath, realign your thoughts away from a tripped ego or old wound, and remind yourself it’s not personal. They are exploring and learning, so instead of correcting them and dismissing their viewpoints – let them dream big, and help them set up a plan!

Even if you think that the plan is unrealistic and unattainable, do it as if it wasn’t, and you may just end up surprised (and well taken care of in your old age).