The Nuts and Bolts: Talking to Your Kids About Money
My kiddo is four. She has a piggy bank. She is starting to become aware of money--well, sort of. She knows things cost money, and she knows we have to pay for things, but how we get money or how much things cost are still foreign concepts to her. But, if you can believe it, the experts say this is the prime time to start teaching her about money.
That's great and all, as I am ready, but I need details. I need to know how to talk to her about it. I know I won't be discussing the ins and outs of interest rates and the stock market with her (yet). So what do I do?
I searched around and got some tips for all of us. The main thing I found that made me feel a bit better: the reminder that even if you don't know a lot about money, you know more than your kids. Just like teaching them to be polite and to know their ABCs and 123s, teaching them how to deal with money is a life skill. Here are a few hints on how you can sneak some good money lessons into your every day lives.
-- Take advantage of regular situations. When you are at the supermarket, show your children the price tags and talk about how one thing may cost more than something else--discuss why that is more expensive. Let them see you make conscious decisions about buying something and why you are buying the one you are--whether it is shoes or a new purse or a new toaster.
-- Use the "Ex" factors: explain and examples. When a trip to the store involves "Mommy, can I have that!" with your usual "No!" response, turn it into an opportunity. Don't stop at "No." Keep going and explain why you are saying no. Explain how that that $22 toy is as much as a trip to the movies or a tank of gas that will allow the family to go to soccer games, birthday parties and to work. Or discuss how that one $22 toy is about the same price as four $5 books, and see if that changes your child's opinion. This is a great time to discuss wants versus needs.
-- Include them in your money world. Even though your kids get a bit older, they may not realize just how much stuff costs. Be sure your preteens are around when you pay the bills. When they want a $499 iPad, say, "Hey, you know, that's nine months or a year of electric bills." Also show them how you save, how you pay bills, what bills look like, and what your budget looks like.
-- Remember they are watching you. Just like when they were young and they told you to model behavior by saying "please" and "thank you," model good money behavior. Perhaps talk out loud when you decide NOT to buy something. Whether it was too much money or you realized it is a want versus a need or that you want to see if you can find it cheaper or whatever, just include them on your thought process.
-- Play games that teach money. When they are little, play "Supermarket" with their pretend food. Have them to pay for things using pretend coins. When they are a bit older, break out board games like Monopoly or Life, both of which teach how money works and how everyday events can cost money.
-- Read books about money. This is a great way to introduce money lessons to younger kids. Head to your bookstore and look for picture books about money--The Berenstain Bears has one, and even Dr. Seuss has a money-focused bunny for your little ones. There are also websites that offer tools to teach kids about money, like Kids Count, which are designed to be used by schools, but provide a lot of great info, worksheets, and games for parents too.
What do you do to teach your kids about money?