Talking To Kids About Money
I’ve been reading ‘The Opposite of Spoiled” (subtitled “Raising kids who are grounded, generous, and smart about money”). Here are 5 of my favorite ideas from that book.
You may already know about the idea of giving kids 3 different containers for money, instead of a single piggy-bank. They’re labeled “Spend”, “Save” and “Give”. We want our kids to see 3 different purposes for money.
The new concept this book introduces is parents paying monthly interest on the “Save” jar. Give kids an incentive to save more. The book’s example says parents can pay a lot of interest as the kids get started on this habit, and on the smaller amounts in the jar, but 50% monthly interest will break parents’ finances once the kid realizes how fast $40 can grow into a million.
2. View questions from kids as an opportunity to talk about money.
I wrote a separate blog post about this. The point is to make sure you understand why the child has asked the question and be open to the opportunity to teach many things about money and its role in your life and theirs.
3. Give middle schoolers a pre-paid debit card for clothing
Let them make some mistakes. If they outgrow their expensive clothes in 3 months and the card was supposed to last them a full school year, introduce them to Goodwill. Kids become savvy shoppers once you give them a budget. They learn to substitute instead of chasing every popular designer label.
4. Let children participate in the family’s charity budget
Prior to the annual family charity meeting, let them sort through the solicitations the family has received in the mail. It’s a chance for them to grow their reasoning for why certain charities deserve support. Gradually turning over a small share of the annual budget gives them additional connections to those efforts.
Family rituals create good habits and memories. They also focus activities onto the values you want to instill. Example rituals could be...
– Gratitude and prayer
– Thrift stores and yard sales
– Tooth fairy visits (maybe including a gift to a charity)
What do you think? Good ideas?