6 Tips for Talking to Your Kids About Money
10/7/2024
Our kids are always eager to dish about the latest news from school, the soccer game or getting to the next level in their favorite game. What if the topic switched to money and finances? Does your child know the basics of budgeting, saving and investing?
The benefits of talking to children about money include less anxiety about finances and a higher likelihood they will save money for their future.
At SouthState’s recent Women and Wealth webinar, several bankers – who also happen to be moms – shared their tips for weaving money into everyday conversations and empowering their children to have a healthy relationship with money.
Instead, frame budgeting and saving as it fits into their daily life. Would they rather have 5 cheap toys right now that break after a week or save their money for something of quality? Is it smarter to spend their birthday money on candy or put it toward a trip or experience?
“We had to tell ourselves ‘No’ a lot. My daughter understands now that we worked hard to pay off student loans,” Smith says of budgeting. “But we also had a reward at the end.”
Chart progress where kids can see it and celebrate wins together. Having open dialogue can help kids see the end goal instead of only the lack of eating out or new toys.
Chief Administrative Officer Jennifer Idell took her son along for the ride at their local car dealership, teaching him about how financing works and the concept of interest. “He was engaged with what was going on at the dealership and knew it was an important decision,” she says. “We continue to have conversations on how to pay and save for things.”
Look for ways to include children in the process of a large purchase, whether showing them how the family saved for Disney tickets or buying a new swing set for the backyard.
Don’t forget the opportunity to teach them about credit and debt. If your kids are older, work on building good credit together and teach them why a good credit score can help them when it’s time to rent an apartment or buy their own car.
The benefits of talking to children about money include less anxiety about finances and a higher likelihood they will save money for their future.
At SouthState’s recent Women and Wealth webinar, several bankers – who also happen to be moms – shared their tips for weaving money into everyday conversations and empowering their children to have a healthy relationship with money.
1. Connect Financial Planning to Daily Life
We all know kids’ attention spans grow short if they feel a lecture coming on. The same goes for mom and dad suddenly talking about money.Instead, frame budgeting and saving as it fits into their daily life. Would they rather have 5 cheap toys right now that break after a week or save their money for something of quality? Is it smarter to spend their birthday money on candy or put it toward a trip or experience?
2. Include Children in Family Financial Goals
Learning Consultant Shameka Smith advises that parents involve kids in family financial goals. Talk to them about how mom and dad are working to pay down debt, saving up for a family vacation or budgeting for a kitchen remodel.“We had to tell ourselves ‘No’ a lot. My daughter understands now that we worked hard to pay off student loans,” Smith says of budgeting. “But we also had a reward at the end.”
Chart progress where kids can see it and celebrate wins together. Having open dialogue can help kids see the end goal instead of only the lack of eating out or new toys.
3. Include Children in Financial Decisions and the Process
Your kids see mom coming home with a new SUV, but do they know how the process works?Chief Administrative Officer Jennifer Idell took her son along for the ride at their local car dealership, teaching him about how financing works and the concept of interest. “He was engaged with what was going on at the dealership and knew it was an important decision,” she says. “We continue to have conversations on how to pay and save for things.”
Look for ways to include children in the process of a large purchase, whether showing them how the family saved for Disney tickets or buying a new swing set for the backyard.
Don’t forget the opportunity to teach them about credit and debt. If your kids are older, work on building good credit together and teach them why a good credit score can help them when it’s time to rent an apartment or buy their own car.
4. Incorporate Family and Cultural Values
It’s important to give a clear “why” behind financial planning. For many, family values play a role in deciding how you spend money. Premier Private Banker Hanisha Patel says her family taught her the importance of saving for the future and responsible spending, values she now passes down to her children. She also talks about the importance of giving back or donating to show them how fulfilling it is to help a cause they’re passionate about.
Concepts can often begin with “need vs. want” and discipline to wait. Similar to how Patel has practiced with her teen at Sephora, curb impulse buying by encouraging them to wait for a week and see if they still want to buy the item.
5. Build Good Habits
Wise spending and budgeting can start early. If your family opts for chores to earn money, provide clear expectations so kids can begin to connect work with earnings. If you offer a set allowance, your children can learn how to stick to a budget. If they spend too much in January, they must wait until February to purchase something else.Encourage good habits by asking your child how much of their allowance they want to save, give back and spend. You may find it especially rewarding to work together to find a charitable cause.
6. Use Analogies They Understand
Your children may not connect to the concepts of saving and investing unless you match it with something in their wheelhouse. Some examples include using board games like Monopoly to teach math skills or tending to a growing plant to show how a savings account builds interest.Looking for more insight for your family? Visit our website to find financial literacy resources for all ages.