3 key tips for talking to your kids about money

Children learn major life skills from their parents and mentors as they grow up. They learn how to walk, tie their shoes, check for cars, ride a bike, build relationships. And as they get older, they learn how to manage conflict, approach education, engage in critical thinking, negotiate unique social and political landscapes, and so much more.

But one area adults tend to shy away from, both as parents, and even societally, is that of financial literacy.

Most schools do not have a curriculum designed to teach students on personal finance, leaving the whole of financial education to the parents or child’s own experiences. 

Understandably, if you’ve never talked about money with your children before, or if you didn’t talk about money with your own parents at a young age, these conversations could be intimidating. However, if you are not talking to your children about money, they will no doubt pick up on the topic somewhere else. Which is unfortunate, because generation after generation is entering adulthood without the basic skills needed to navigate the often daunting and even confusing world of budgeting, investing, debt management, and saving. 

Children as young as two or three can benefit from starting to learn about money. Even if a child isn’t ready for detailed facts and figures, they can understand the power of the financial decisions you make, and the impact they can have. 

Just like introducing the alphabet and numbers, it’s important for parents to have clear, accessible conversations around money, and healthy habits around finances. 

Make it personal 

Money is more than simply income and expenses — it’s also about personal values and using your finances to accomplish and support your personal goals and beliefs. Take a second to think about your money values and how they might differ from others.

Share your own history and family’s views on why financial wellbeing and security is important to you. Maybe your parents raised many children on a tight budget, or savings helped you pay for your college education or buy your first home. Perhaps only spending what you can afford helps you worry less and focus more on what you do have, and enjoying what you do have with the people that mean the most to you. 

For instance, if as a household, you value or prioritize charitable contributions, tell your children why those causes and contributions are important —  and how to incorporate them into your financial planning and monthly budget to allow them to participate in a more meaningful way. 

By simply explaining the importance of affordable choices, setting a good example of what making healthy financial decisions looks like in action, and allowing children to participate in the family’s finances, you will be able to show the personal, professional, and community value of strong financial stewardship. 

Make it age appropriate

Do we avoid the money conversation with children, perhaps, because we assume it’s too vulgar to mention, or that we don’t want to sully the innocence of childhood? 

Young children often learn best through play, so perhaps consider introducing the concept of money through unstructured playtime — maybe the cost of a cup of tea during a tea party, or the cost of transit when playing with trains, planes, automobiles. You can convert pretty much any toy into a conversation around money and finances.   

Games like Monopoly, the Game of Life, or Animal Crossing can also facilitate discussions around money, finances, debt, savings, wealth management, goods and services value, and more.  

By the teenage years, children are ready to fully understand how money works. 

Hopefully introduced to the world of savings, banking tools, and financial responsibility by now, you can take these conversions further by discussing pay periods, basic taxes, interest rates, income and wealth disparity, and more. 

Conversations around money should not feel taboo, or location specific. In fact, the more applicable to day-to-day life, the better. Talk about money at the gas station, pharmacy, when making grocery lists, budgeting a family vacation, or even planning meals. 

Make it applicable 

The best financial lessons are the real life lessons. Give kids the means to earn and control their money. Allow them to make (small) mistakes. Guide them through those mistakes as opportunities for deep, engaging conversations and mentorship around money and financial health. 

Celebrate small wins, areas of personal responsibility and accountability, and major milestones. This way, when it comes to major life decisions — education, a car, property, even their own children — they are prepared to make their own prioritized decisions, optimize their income, manage debts effectively, and know when to seek any help they need along the way. 

Working closely with a financial professional can help you map out a household budget that addresses your family needs. British Columbians can obtain a free and confidential assessment of their financial situation with a Licensed Insolvency Trustee at MNP LTD. As the only government-regulated debt professionals, they provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements and Bankruptcy.