The Skill Set: 6 Tips for Talking to Your Kids About Money

Kimberly Palmer, a financial journalist and mom, shares her advice.

According to Kimberly Palmer, it’s never too early to start teaching your kids about money. “It’s not something scary; it’s not something that should be hidden and not talked about,” says the financial journalist and author. “It’s our job as parents to talk about money with our kids to prepare them to make good financial choices in the future.”

She shares her advice for starting the conversation.

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The Skill Set: 6 Tips for Talking to Your Kids About Money


1. Start them young

As soon as your kids start asking for things, which is around two or three years old, you can start explaining why we can’t have everything we want and how to prioritize things. Teach them that, every time you want a toy, you don’t just go out and buy it—you have to think about how you spend your money. They really do grasp the concept, on some level, at that age.

2. Set an example

I make sure my daughter sees me paying for things. Early on, I would let my husband pay for almost everything when we were out on family outings. I realized what a big mistake it was, because my daughter and my son only saw daddy paying for stuff, and not mommy. What kind of message is that sending?

3. Take any opportunity to talk about money

Whenever money comes up in your day­-to-­day (i.e. you’re paying for groceries) and your kids are nearby, talk about it with them. Once you start thinking about it, you’ll notice money comes up all the time. For example, my three-­year-­old son drew with his crayons all over our leather sofa. I was upset, of course, but I used it to explain to him, “We’re not just going to buy a new sofa. Furniture is expensive.” He and my daughter helped me clean the sofa. Little things like that send the message that we should prioritize our spending.

4. Get them involved

When I pay bills, I have my six-­year-­old sit daughter sit next to me and watch me pay them. When she needs a new leotard for gymnastics, I’ll have her sit next to me while I look through the options online so I can explain to her, “This one is $20 and this one is $30.” It helps kids to be more aware of the choices they’re going to have to make when they’re older.

5. Give them an allowance

Have a set time each week when you give your kids their allowance. It opens up a conversation about money, because you can ask them questions, like, “What are you going to do with it? Are you going to save it?” Give them the same amount each time. For us, it’s really low right now, because our kids are so young, and we give it to them every Saturday.

6. Put it in its place

Have a place where your kids can save their money. It doesn’t have to be a piggy bank. In fact, I think it’s better to use a container that they can see through, so that they can see the money accumulating. Then, as it starts to build up, when they ask for something, you can say, “Well, now you have money, too. Is this how you want to spend it?” Asking that question prompts them to think about saving versus spending versus investing for the long term.

 
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Image courtesy of Ivanka Trump