We always hope our clients feel confident discussing money with their families. The truth is, talking about money can be uncomfortable! Where do you begin? What’s the right age? The good news is, it’s never too early to build financial literacy! Here are four tips to help your family become more comfortable talking about money:
Create a financial mission statement. A mission statement is a formal statement of goals aligned to values. To adapt this concept to your family life, have an open conversation with your spouse and children about what’s important to them. Try asking them what they think money is for, how to earn it, save it, and spend it. Ask them what their goals are and how they’d like to achieve those goals. Write it down and make sure to use it as your guide when anyone in your family – yourself included – has to make a monetary decision.
Model smart spending habits. Next time you need to run to the grocery store, involve your children in the process from start to finish. That means planning the list, what you plan to cook, and how much you’ll need. You can model planning ahead and let them practice their math skills! Then, at the grocery store, help them stick to what’s on the list. Be on the lookout for impulsive decisions as an opportunity to gently correct. For older kids, help them compare the cost of eating out versus a meal prepared at home.
Allow kids to earn their own money. An allowance offers an excellent way to help children learn how to handle money. There is some debate about whether it’s more helpful to provide allowance without conditions or tie it to completing household chores. Use your family mission statement to guide the decision! Either way, an allowance can help a child learn how to save up for things they want.
Give them control. Open a joint account for your child. Explain to them this is where they can access their allowance. Show them how to monitor their account activity and manage their activity, and then let them go! Check back in a month or so. The account balance doesn’t matter nearly as much as helping them understand how their money was spent. If it’s empty, help them understand why. If it’s untouched, ask them why? Help them understand their behaviors and the impact of those behaviors. More than anything, be patient. Their own account is an opportunity to make mistakes and have you there to help them grow and learn.
Helping your kids become financially literate should pay dividends as they get older. Plus, it’s an opportunity to make money fun and engaging! We hope you found these ideas helpful and are always happy to answer any questions you have on how to get the whole family involved. Please reach out if you ever need us!