The Money Savvy Mommy: Why and How To Talk to Your Kids About Money

by Mira Reverente

Encourage visual saving.

Encourage visual saving.

During our recent road trip, my 12-year-old wanted to know how much the camp sites cost, how much it took to fill up our gas tank and if the ranger-led hikes cost money (they were free). I’ve always been honest with her about money, saying no to frivolous purchases, asking her to wait for a new backpack and telling her how long it takes to save up even for a bare-bones vacation like a camping trip.

Like many parents, I’m also tempted not to divulge money matters, feeling that I want to protect my children from financial worries. They can worry about money later, right? Wrong!

Money values are learned at home. We can share bite-sized money nuggets to our children, depending on their age and emotional maturity.

Consider these findings:

  • Studies show that kids who are taught money at an early age gain more confidence about money and are more motivated to save.
  • Even a small college fund will significantly increase the likelihood that a child will attend college.
  • Early money lessons keeps kids grounded.

Here’s how you can start your kids’ meaningful money journey:

Elementary

  • Encourage visual saving. Ever hear the saying, “out of sight, out of mind?” The traditional piggy bank is great but a transparent jar or container is even better, so your kids can see the gradual accumulation of money. You can even label the jar with “vacation fund” or “college money.”
  • Teach by example. Use cash when you can. It is challenging to teach wise spending habits when they see you swiping plastic all the time.
  • Show and tell them how much things cost. You could also tie in some simple lessons in not wasting food or school supplies. They will be more appreciative of the things they have when they know how much they cost.

Middle School and High School

  • Show how money is earned. Don’t just give an allowance just because all their friends get one. Set clear expectations of what chores need to be done around the house every day and every week.
  • Show them how to make decisions and choices. So they’ve earned their allowance for the week and they want to head to the mall with their friends. Ask questions and point out consequences. How much will the trip cost? How much do they think will be left over? Can they still buy the video game they’ve been pining for?
  • Start teaching how to give back. Even at a young age, kids need to learn that there others less fortunate than they are. Get them thinking beyond their perfect worlds by donating money or their time to a cause.

College

  • Set up a bank account. As of last count, only four states mandate some type of personal finance classes in school. As a result, we have young adults struggling to balance checkbooks, among others. Setting up a bank account and helping them navigate the intricacies of maintaining one will go a long way.
  • Encourage them to find a job. The bank account has to be funded somehow, and not just from mom and dad’s coffers. I remember being almost broke in college with my allowance running dangerously low. Working part-time was a lifesaver. It felt good to have some hard-earned “back-up money.”
  • Warn them about the dangers of credit cards. They will be flooded with credit card offers in college. Teach them how to navigate this new phenomenon, either with some personal stories or second-hand experiences. Describe the temptation of nonchalant spending and the effects of non-payment on their credit history.

Remember, keep it simple. Be honest. You can learn with them.

Mira Reverente is associate editor of CVH and a longtime journalist whose work has appeared in many local publications. Her first book on money came out last fall. Follow her on Facebook, Instagram and Twitter, for more money savviness tips or check out her new blog.  


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