Okay, let me say this right up front: everybody is different when it comes to the way they feel about talking about money. Especially with their kids. For some people, they’d honestly rather talk about ANYTHING than talk about money. Some of you might have had parents who never talked to you about what they earned. Or how they budgeted their money or invested it.
I think that’s true for whole generations of people.
They just didn’t talk about money.
How to Talk About Money with Your Kids
Well, I’m not one of those people, at least when it comes to my kids. In fact, Jared and I have made a point to talk about money and to teach our kids about money.
How to earn it. (Yay for kids who are entrepreneurial, right?!)
How to spend it.
How to give it.
How to save it.
How to use it wisely.
Now, we know a lot of parents out there are doing a great job teaching their kids about money. But there are some who might be a little unsure about how to do it. That’s why Jared and I came up with a list of 4 mistakes parents can make when teaching their kids about money.
When we don’t teach our kids about money, we are setting them up to make really costly mistakes. That’s not what we want as parents, right? We want to teach them the principles that are really going to benefit them in life.
Avoid the 4 Biggest Mistakes Parents Can Make When Teaching Kids About Money
1: Talk to Your Kids About Money
One of the things that we’ve done with our kids since they were pretty little was to talk about money in ways they’d understand. We wanted them to know how we use our money to pay for the things they take for granted—basic things like water and electricity.
It’s not about trying to scare them into not washing their hands because they think it’s costing you money when they turn on the water.
Dirty hands are not our friends. Ew.
What it IS about is helping them know that these expenses do exist, and it prepares them for their own money management in the future. It can even relieve some of the fear they might feel about money and whether they’re doing the right thing with it.
2. Be Consistent
Picture this: you're in a store and your child is asking you for a toy or a candy bar or whatever has caught their eye. We've all been there, right?
That's why it's important to be consistent.
What we don't do is tell them we can't afford something and then turn around and buy your favorite beverage or magazine using your credit card. That's pretty confusing, right?
So if it's just a “want” we just let our kids know that they have the option of buying virtually anything… as long as they pay for it. If they want it badly enough, they'll find a way to earn the money, and that's a great lesson in and of itself.
One caveat: It's completely okay to tell them “no” if whatever they're asking for is dangerous, going to hurt them or just flies in the face of what your family believes in. I think we can all agree on that one, right?
3. Don't Pay for Everything
We made the very conscious decision to have our kids start to pay for some of their own things at a certain age. Obviously, we buy food and clothes and pay for a roof over their heads. But as they head into their teen and tween years, more things start to move onto their financial plate.
Here's why: when kids buy things, they tend to take better of care of them.
They feel proud about earning, saving and spending their own money for the items they choose.
They learn super valuable lessons about value and quality.
4. Create Small Wins
Before you think we're nuts and make our elementary schoolers pay for everything from underwear to plane tickets, think again. Part of how we help our kids learn about money is to help them achieve small, age-appropriate wins.
We give them opportunities to earn money and cheer them on when they use it to purchase a $5 pair of headphones or an $8 BlueRay. We walk them through budgeting to show them how to save for larger items. We also discuss how to give charitably and how to have a few dollars on hand in case they'd like to buy a while we're out and about.
Those small wins give them confidence that they can do bigger and better things, and that's pretty dang awesome.
So would you like to get our quick reference guide The 4 Biggest Mistakes Parents Can Make in Teaching Their Kids About Money?
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Oh! And if you have any ideas for helping kids avoid money mistakes, we’d seriously love to read them. The more knowledge, the better!