Money is often a topic we get wrong with our kids. We don’t know how to talk to them about it, at least not in the right way. So many kids end up in college or in jobs after high school with little know-how on how to save and manage their money. College debt is higher than ever right now, but kids have no clue how to pay it off.
Fortunately, you can start instilling good money habits in your child right now. Kids learn about money from what they observe in their parents, whether you’re talking about money with them or not. Because of this, it’s important to both talk to your kids about money and model good money habits.
Here are a few tips for how you can navigate the money conversation with your child in a way that will leave her feeling equipped to handle, manage, save and spend her own money one day.
Talk about it, but don’t complain about it.
The first rule about talking to your kids about money is simply that: talk to them about money. When parents keep money a secret or don’t bring it up around their kids, it confuses them. They know money is important, but if their parents never talk to them about why it’s important, how to manage it, and how to spend it, they may think understanding money isn’t important. Then, when their money doesn’t simply manage itself one day, they will feel even more confused.
On the other hand, if you talk about money too much around your kids, this could cause them anxiety. If money is tight and you’re constantly talking about what you can and can’t afford, or you’re arguing about it with your spouse, your child will feel pressure and fear when it comes to money. She could develop an anxious attitude toward it and take on a feeling of responsibility—the family’s money—that isn’t hers.
Talk about money with your child in a reasonable and healthy way, and save the stressful conversations for after bedtime.
Teach contentment first.
Kids learn the most from what you do, not what you say. That’s just how it is. They absorb everything they see, and if they see you being discontent and spending money you don’t have just to keep up with everybody else, that is what they will learn about money—that it is a way to stay in the “in” crowd, to be included, to get what you want when you want it. And as you know, this will not lead to a satisfying life for your child. This will lead to a life of discontentment. (My friend Rachel Cruz wrote a book about this a few years ago that I highly recommend: Love Your Life, Not Theirs: 7 Money Habits for Living the Life You Want.)
If you want to teach your kids the ins and outs of money, you have to teach them contentment first. You do this best by modeling it. Stop talking about wanting to be like so-and-so. Stop complaining about what you don’t have. If you are living with a sense that you want someone else’s life, you will transfer that to your children. Discontent, dissatisfied parents raise discontent, dissatisfied kids. Instead, teach your child how to be content through practicing gratitude in the small and big things.
Let your child get a job.
I started working as a young teen and have continued to throughout my life. I know some parents are afraid to let their child have a job while he’s still in high school. You’re worried it will interfere with his classes or prevent him from focusing on what he needs to focus on. But having a job is a great way to learn about money. When your child is making his own money, it is hands-on learning experience that will teach him how to manage, save, and spend his money. He can’t learn this if he doesn’t work. And if he doesn’t get his first job until after his education, he could have a very steep learning curve with that first paycheck.
Allow your child to work on the weekends or maybe a couple of hours after school a couple of days a week. Consider it a part of his education. Trust me, this is where he will learn some of his most valuable lessons.
Money is hard to manage as adults, but just because it’s hard doesn’t mean it’s a subject you shouldn’t tackle with your kids. In fact, because it is difficult is all the more reason to be open with your kids about it and teach them in the best way you can how to approach, deal with and handle money so they will be ready to handle it themselves.
To read more about how to navigate the money territory with your child, check out my blog post “The Most Important Thing You Can Teach Your Kid About Money” and this guest post by money guru Rachel Cruz: “4 Things to Teach Your Kids About Money.”