“You’re teaching them way too young,” joked the man next to me and my three girls at the bank machine; clearly he assumed we were taking out cash, and thought it would be funny to tease me about that. “No, man,” I teased back warmly; “I teach my girls to make deposits.” He laughed, I laughed, and then I invisibly high-fived myself for actually teaching my kids how to do just this. Because it’s a skill, isn’t it, to be confident and capable in money and its management.
And too often, the learning curve feels steep even for ourselves, let alone to share the key messages with our kids.
The thing is, that teaching our kids to use and value money for the powerful tool that it is, is one of the most empowering gifts we can give them, from even an early age. How do you do it? It’s so much easier than you think; even if you grew up with a distorted view or approach to wealth and personal finance, here are our top five teaching tools for parents and kids to learn to speak the language of money, and develop a healthy attitude towards money straight away.
“It’s not too late to start right now!”
1. ALLOWANCE IS A TEACHING TOOL
Use it. Allowance is a fantastic hands-on learning tool to teach the actual process of money management. (Don’t give your kids money for chores – chores are a part of family life, and it is an expectation that they participate in them.) Give allowance because it shows your kids how to be responsible for their own saving, spending, and sharing, and give them the wide berth to make bad decisions in spending it; better to learn the lesson that the glow in the dark Beanie Boo was a bust as a seven year old, than to realize that the car they bought at 21 was a lemon.
Get them familiar with the pattern of reserving part of their money to share with others, to cultivate a spirit of generosity, and to reserve part for saving – this is crucial in developing a pattern and attitude of “I don’t spend all my money once I get it.”
2. MONEY IS A LANGUAGE
Speak it. If you are someone who grew up with a bitter taste in your mouth about money, more than likely there were messages and feelings of shame associated with it; stop that cycle with your kids, and open up the conversation in all of the age appropriate ways. Talk about saving for the mini Golden Doodle you all want as a family pet. Talk about the $25 budget at the toy store for their friend’s birthday present. Talk about the cost difference between a dance class and the competitive dance team. And have each of these conversations in a frank and open way, not of guilt or shame, just in a way that draws attention and awareness to the fact that there is an energetic cost to everything we do.
Are you into stocks? Show them bits of your portfolio, especially the visual charts, and let them in on the secret pattern that over time, it always goes up. Each of these micro-conversations plants an essential seed that you can continue to grow over the course of your child’s lifetime.
3. THE BANK IS AN EXPERIENCE
Take them. Chances are, unless you’re keeping your cash in a jar under your bed, the bank is the hub of your personal financial transactions. Include your kids in this area of daily life: let them not only “press the buttons” at the ATM, but take them to the teller, get them familiar with the processes behind daily banking, let them count cash when it comes out, and let them fill deposit envelopes with bills and cheques. Teach them to look at the balance on the receipt and say “thank you” for what’s there.
Let them know how grateful you are to have this wonderful tool in your life that enables a whole lot of freedom, and how it got there.
4. THE IMPORTANCE OF PAYING YOUR BILLS
And pay them together. There is something deliciously analog about getting a paper bill in the mail. I kid you not, when my girls see a bill in the mailbox, they actually say “Yessss! Bills are here!” Why? Because we have carved out a ritual in which we sit together one on one and pay our bills together. Show your kids to find the vendor, the amount due, and to circle that amount and write “Paid on [date].” As they gather that info from the bill, you can enter it into your own online payment system.
Not only is this much needed and celebrated time together, but it’s another conversation about personal finance: why do we pay a hydro bill? Why is this utility bill higher in the winter? Can you imagine a world without internet – let’s happily pay that one! These conversations draw kids’ awareness to the daily happenings of life, and connect them to their own resources.
If your attitude towards bills is “man, I’m so grateful to have a house that is heated in the winter and cool in the summer, with a one click connection to anywhere the world,” suddenly the entire experience is a joy for you, too. And where there is gratitude and joy, there is the cultivation of more gratitude and joy.
5. SOME THINGS ARE WORTH THE WAIT
So wait, and teach patience and a mentality of “earned, not given.” One of the greatest parenting challenges our generation faces is exactly this: how on earth do we teach patience and process while we live in an instant, on-demand world? Well, we simply teach it.
Just because we can access something instantly doesn’t mean we should; you know from your own experience how sweet a victory it is when you buy something with your own money, or hold something in your hands you know is irreplaceable. These feelings are part of healthy brain development, and in their absence we cultivate a near constant dopamine rush of instant gratification that becomes stronger, and harder to fulfill over time. It’s ok to say “no” to things, to hold out, and to appreciate the consumption of less, not more.
Children thrive when they feel like they are a real part of our family life, and respected enough to be included. Having these grown up conversations distilled into a child friendly way shows your kids that you have confidence in their abilities to handle it, and that they are valued members of your tribe. And in the same breath, you are teaching them an incredibly valuable life skill they will continue to hone and use over the course of their lifetime.