Many families, mine included, don’t talk much about money. My dad always suggested to me that I save 10% of what I made, (which was easy when I was living under his roof and he was covering my major expenses). He seemed to just inherently know how to handle money. Not a trait I was born with, although I didn’t know it right away.
My parents were always extremely generous and willing to help out when I needed it, and having them as a safety-net made the transition into adult-hood easier than it might have been otherwise. I think the transition would have been better if I would have had more conversations with my parents about personal finance when I still lived at home.
My dad never tipped his hat to us if he was worried about money, and like him, I used to feel like I had to protect my kids from the harsh realities of life. I wanted them to feel secure and to never have to worry about things like money. I felt like they’d have plenty of time to worry about those things when they were grown up.
But after suffering through too many of our own money mistakes my husband and I have changed our tune. We’ve come to the opinion that letting our kids in on “real life” could help them avoid some of the challenges and mistakes we’ve had.
One of the ways we’re doing this is involving them in our family finances; making sure they each know how to create and stick to a budget now before they have to do it on their own.
If talking about money with your kids feels equally as uncomfortable as talking with them about sex, here are some tips to help.
Ten ways to include your kids in your family finances:
Our kids range in age from 5 to almost 15, so we’re trying to keep things age appropriate for them, but keep them involved in our money stuff. If you’re looking for ways to involve your kids in your family finances, here are some of the things that seem to be working for us.
- Have a savings goal for something that will benefit the whole family.
We put our savings goal on the fridge for things everyone can enjoy such as an upcoming vacation or a video game system. We also have our debt payoff plan on the fridge as well, so they can see where our extra money goes. It’s a great reminder when the kids see something they want at the store, as to why we’re not going to buy it.
- Talk openly with each other about the bills as they arrive in the mail.
We let our kids see every bill that comes into the house and we’ll frequently talk about them, pointing out things like how the gas bill and electric bills get higher in the winter than in the summer, or how the water bill is higher in the summer from the sprinkler.
- Look for teachable moments throughout your daily life.
Just the other day I needed to write a check for a hot lunch to send to school with my daughter, and I used that moment to teach her how to fill out a check.
- Lead by example.
Shop with a list and don’t impulse buy. Let them see your comparison shopping online for the best price, using coupons at the store, or repairing something instead of throwing it away and buying new. Let them see you budgeting and talk openly with them about how you’re going to make it to the end of the month by saying no to things you may want but you have not budgeted for.
- Give them “on the job training” with your finances.
Let your kids see how much you make and how much you’ve budgeted in each category. If they’re old enough, let them help you balance your checkbook and pay bills online. They may cover this kind of thing in high-school, but working with real numbers instead of hypothetical is a great experience and gives them an opportunity to apply math skills they’ve learned already.
- Let them pay for extras out of their own money.
If you’re going to buy them something such as school clothes, let them know what you’ve budgeted for them to spend and let them spend it under your guidance. If they want name brands that are beyond your budget, talk with them about it and if it’s really important to them, let them pay the difference out of their own money.
- Help them save their money for bigger purchases down the road.
Our daughter is 15, and while she’ll have a car available for her to drive when we’re not using it, if she wants her own car, she knows she will have to significantly contribute to purchasing it and we get the final say in what she buys.
- Let them work.
We all need to learn to trade our time and skills for money. Let your kids work for things. I was lucky enough to be at a conference where John Maxwell spoke a few years back and I loved his philosophy on this. His kids had to help with housework because they were part of the family, but they didn’t get an allowance for it. To earn an allowance his kids had to read. He’d choose the books with them, making sure it was something that would teach them something along the lines of spiritual or personal development, time management, or a new skill. They gave him a synopsis of the book when they were done and would get paid based on how well they presented the points of the book.
- Let them see you give.
Let your kids see you give your time and resources to things that matter to you. Whether through a tithe at your church or donating your time to lead a girl scout troop, your kids will be more likely to grow up to be givers if they see you giving as well.
- Let them see you make mistakes and how you resolve them.
No one is perfect and every once in a while, we slip up. Maybe it’s going over on your cell phone data plan or not accounting enough for taxes. These can be great moments for your kids to learn how to problem solve. Let them see how you’re going to cut back in one area of your budget to make up for overspending in another, or how you make up the difference by having a garage sale or selling your clutter on eBay.
There’s so much to learn about family and finances. I know my parent’s way of handling money worked well for them, but I believe there is a lot of value in letting your kids peek behind the financial curtain of your life.
We used to feel like we had to “protect” our kids from the financial stresses we were experiencing. While I don’t want them lying awake at night worrying about money, I do want them to learn from our experiences so they don’t make the same mistakes we have.
Like everything we’ve taught them so far, it takes longer doing it with them and would be easier to just do it ourselves, but these skills are worth the extra effort and we’re looking at it as an investment in their future.