Talking to your kids about money is a central element of their financial education. The words you speak to your kids always have power, from explaining the basics of money in early childhood to discussing more complex financial concepts like budgeting and student loans before your teen heads to college. How you discuss wealth will influence your children’s relationship with money for the rest of their lives. It’s not just what you say, either, it’s how you say it. We offer 10 positive ways to talk to your kids about money, life, and more.
1) “You’re My Greatest Investment,” Not “I’ve Sacrificed So Much for You”
The US Department of Agriculture estimates that the average family spends $284,570 (adjusted for inflation) raising a child. There’s no doubt that parenthood involves sacrifice, but kids also bring joy and life purpose. Consider your time and resources as an investment in their future. We can help you plan ahead for parenting costs, and develop a long-term plan that balances both individual and family financial objectives e.g., saving for your own retirement, while also saving for your child’s college costs.
2) “Money’s a Good Friend,” Not “Money is Evil”
Just like a friend, money enhances enjoyment of travel, study, and other life experiences. Encourage your kids to develop a healthy relationship with money by being a responsible financial role model yourself.
3) “Money Makes Life Easier,” Not “Money Will Make You Happy”
True happiness comes from loving and being loved. While it’s important to focus on teaching your kids how to save, it’s also important to teach them the value of life experiences that aren’t money-oriented, like donating time or skills to a favorite charity, or enjoying free fun activities.
4) “Failure’s a Way of Learning,” Not “Failure Means You Should Give Up”
Inspire grit and determination in your kids by helping them to achieve a longer term financial goal like saving for a big purchase. You can even establish a matching program to reward their saving efforts. Teach them about financial failure too, if they run out of allowance, by offering a small loan to teach them about borrowing.
5) “Be Successful,” Not “Be Cool”
Scientific studies suggest that being popular in high school can actually be detrimental in adulthood. Whether they’re a star athlete or a talented musician, encourage your kids to follow their passions. It’s a sure-fire way to lead them towards friendships with like-minded peers. Peer pressure is an important influence on your child’s financial learning, so make sure you’re prepared with our age-based tips for 8-10, 11-13, 14-16, and 17-18 year olds.
6) “Hard Work Can Help You Achieve,” Not “Hard Work Makes You Rich”
Hard work can certainly help with wealth acquisition, and you can foster a strong work ethic in your child through chores and summer jobs for teens. However, key considerations to teach your kids about career and financial success involve understanding that:
- Higher paid jobs invariably focus on thinking.
- The decisions your teen makes regarding college will impact their future earnings.
- They need to have realistic expectations, relative to future lifestyle.
7) “You Contribute to Our Family,” Not “I Pay All the Bills”
Passing on your family’s values relative to money, giving, and more, is a core component of your child’s financial education. From an early age, you can help your child feel appreciated and understand the value of being a family member with phrases like:
- I enjoy your company.
- It’s fun to do things together.
- I like listening to you and talking to you.
- The chores you do make a real difference.
8) “What Do You Think?” Not “This is What We’re Going to Do”
As parents, there are times you need to take the reins, but there are also times you can ask for your child’s input. Including your kids in family discussions teaches them how to express themselves, communicate openly, and take responsibility for their choices. Discussing money openly can help couples communicate better about cash, financially empower women, and much more.
9) “I’ll Do My Best,” Not “I Promise”
Life’s unpredictable. As a busy parent, even the best intentions can go awry while juggling work, family, and individual responsibilities. Rather than end up breaking your promise (which can trigger distrust), instead say that you’ll do your best. In the event that something doesn’t work out, own up and apologize. This teaches your kids how to take personal responsibility and to handle failing to live up to expectations in a healthy manner.
10) “Yes,” Not “No”
Rewards and compliments are a far more effective way of communicating than punishment or denials. While ‘No’ is a valid option sometimes, there are ways of saying ‘No’ without actually saying ‘No’. Furthermore, depending on what they’re asking, you could consider saying ‘Yes’ more often, subject to ground rules like asking politely, not whining or crying, and through calm negotiation.
SageVest Kids is the financial literacy site founded by SageVest Wealth Management, in support of your family’s financial success. We invite you to contact us to learn how to connect you and your loved ones with your wealth in more meaningful ways.
 Expenditures on Children by Families, USDA, 2015.
 Popular by Mitch Prinstein