It’s a delicate discussion, and one that can be difficult to start for some parents but talking to your kids about money is extremely important. Starting the discussion early with your kids will help set them on a path towards better financial decision-making. If they understand the basics about money, and become curious to learn more, they can give themselves an upper hand over their peers.
But how do you start that conversation? It can be hard to work into everyday conversation with your kids. Don’t worry! We’ve outlined 4 tips for you below. Enjoy!
4 Tips for Talking to Your Kids About Money
Tip #1 – Slowly Ease It Into the Conversation
If you’re anxious about introducing money into the conversation with your kids, don’t worry you’re not alone. The good news is that you don’t need to cover EVERYTHING about money in one sitting. In fact, you definitely should NOT try to do that. There is simply too much. A good way to slowly get started might be to ask your children what they already know about money. Have they heard anything about money from their friends?
If they don’t have any prior knowledge, that’s okay! Be sure to try your best to answer all of their questions. There is no such thing as a “dumb question”. Ask away! Be open-minded, and do your best to be receptive to all of their initial questions.
Tip #2 – Be Truthful
Not just in talks about money, but honesty with your kids should be a no-brainer. When it comes to talking about money, be as honest as you can. Being honest is extremely important, and you should try your best to open up to your kids about your own personal financial journey. After all, you don’t want them making the same mistakes that you did.
Having an open and truthful discussion about money can help significantly in building trust with your kids. Be honest about what you do, and don’t, know. It’s okay to not have ALL of the answers, but lying when you don’t know just makes things worse. Being honest gives you the ability to teach important life lessons and demonstrate the implications of poor financial decisions. It’s helpful to provide real life examples to different situations with money.
Tip #3 – Discuss Values
It’s important to discuss the nuts and bolts of finance and how money works, but it’s also important to cover some of the more intangible things surrounding money. Have a conversation with your kids about their goals, their values, and possibly their career ambitions.
Before we said it was important to answer all of THEIR questions, but here it’s equally as important to pose a few questions of your own. Asking them simple, broad questions about their future plans can lead to discussions about how financial planning will come into play to help them reach those goals. Questions like, “do you plan on owning a house of your own someday?” or “what type of job do you think you’d like to have?” can help get the ball rolling.
Tip #4 – Establish Family Goals
It’s always a good idea to lead by example. In this case, setting some financial goals for your family can be a good way to lead by example and get your kids involved in the financial process. Depending on what age you start these discussions, it can be difficult for your kids to take action of their own on everything they’re learning, so working together can help these lessons sink in. Setting savings goals for vacations, a weekend getaway, or a new TV can get your kids motivated and engaged in the process of saving money.
There’s no perfect way to start talking about money with your kids, but following these four tips can certainly make the task less daunting. It’s all about getting the ball rolling, and we think this is a great way to start. If you would like to discuss this in greater detail, feel free to give us a call! We would be happy to have a discussion with you. You can click here to schedule an initial call with one of our team members. There is no cost or obligation.
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