We all want our kids to learn how to handle money wisely. We want them to save, make smart purchase decisions, and to eventually be able to set financial goals. However, sometimes our good intentions create the opposite effect. We end up nagging, or our little ‘money talks’ end up making our kids feel anxious about money, or feel guilty about asking for what they want. Here are some tips on what you should never say to your kids about money—and a clearer, more positive way of getting the message across.
Big Money mistake: never talking about money (or talking about it too much)
Possibly the worst thing you can do is never talk about money at all. If you don’t teach your kids anything about money, who will? It may also make them feel that money is a bad thing, or that it’s not important enough to talk about, or even think about.
However, nagging them about money (just like nagging them about anything) will cause your child to zone out and ignore you. Or they’ll just roll their eyes and say, ‘There’s mom, worrying about money again,’ and take you less seriously.
The healthy balance lies in being sensitive to how your child is reacting. Is she really listening or is she zoning out? Has the conversation turned uncomfortable?
Big Money mistake: not setting spending limits
Telling your child, ‘Let’s buy a new toy!’ may be very disappointing if you don’t set limits from the beginning . ‘Yeah, Dad said he’d buy a toy but he didn’t get what I wanted.’ Too much of this and he will become disappointed and learn that he can never have what he wants.
However, overindulging your child—with no regard to budget—raises him to be irresponsible.
The healthy balance lies in being clear about limits from the get-go. ‘We are going to the toy store and we have up to this amount to spend.’ If they want something more expensive, they can add to the money from their savings.
Big money mistake: always saying, ‘We can’t afford it’
All this talk about how you have too little money can make your child worried and even guilty or afraid to ask for anything. But if he asks for a pair of jeans that are just way beyond your clothing budget, it’ll be stupid to dip into your retirement fund just to indulge his request.
Instead, talk about smart money choices. You have money, but you have to wisely think about where to put it. Older kids can learn a little bit about household expenses. ‘A $200 pair of jeans is x days’ worthof groceries.’ Or better yet, give them the big picture. ‘Your clothing budget is $300. So if you get those jeans, you only have $100 for the x months. What if you need to buy a new shirt or shoes?’
Big money mistake: making them guilty
Stop saying things like, ‘If we didn’t have to get you braces, we could’ve gone to Paris.’ Or, ‘My dad never bought me anything as expensive as this laptop.’
Guilt has no beneficial or productive effect. It just makes them feel bad, which may make them avoid talking about money or feel powerless to earn it or spend it. Just stop it.
Big money mistake: sharing your fears
Kids are still kids and they need to feel you’re in control. Worrying about big money issues in front of them, like how you’re going to pay off credit card or mortgage, will only cause them stress—since there’s nothing they can do to help.
If you do discuss money, do it in an empowering way: ‘What can you do?’ Make them feel like they’re part of the solution. For example, you may realize that to pay off credit cards you have to reduce your household expenses. So you can say, confidently,
‘Let’s think of ways so we only spend $xx at the supermarket.’ (If you think you’re passing on your fears to your child, read our article on how to feel in control of your finances.)
They can try making meal plans or cutting out coupons. And, while you can explain that it’s not possible for you guys to go on vacation that summer or to buy a new bike, do make them feel safe and secure. Spend more time together, and bond as a family—talking, taking a walk together, etc. are perfectly free, make your child feel happy, and teach the most important lesson of all: ‘The best things in life can’t be bought.’
Photo from oaklandseen.com