Talking To Kids About Money

Talking to Kids About Money Lately, I’ve been trying to teach my kids about money. Specifically, that they should not assume that my money is their money…or that I have any, for that matter. We’re off to a rocky start. But, whether it’s teaching kids about how to save, how to spend wisely, or how to understand the cost of living in today’s world, I’ve come to realize that keeping them out of “money conversations” isn’t in their best interest in the long run.

Without irony, the “money light bulb” went off in my head during one of my many frantic midnight scrambles through the house to turn off lights because every single one had been left on…again. It dawned on me that I was not doing a very good job of getting through to my kids that money actually equates to things and resources, such as electricity in this case.

I’m fairly confident that my house can be seen from space. This is not because I am running full stadium lights in my backyard; but rather because my children leave all the lights on all the time. Like, all the time. I am not sure they turn their own lights off to sleep.

Lights and the electricity it takes to run them are an issue for two reasons. First, my house was designed by a sadistic light bulb connoisseur who wanted to represent as many different types of bulbs as possible in his or her final design. This is why we have multiple weird, brass chandeliers in hard-to-reach places requiring upwards of 20 tiny lights each, excessive recessed lighting (I mean as many as 10 bulbs in a single room), and gaudy vanity lights with really hard-to-find bulbs in all of the bathrooms. The designer ran out of creative (or intentionally cruel?) ideas when it came to bedrooms and main living areas, so those have no overhead lighting whatsoever, and now have to be filled with multiple lamps because…well, darkness. But that means more bulbs. At some point, I am going to have to choose between sending the kids to college or buying light bulbs. And don’t even think about telling me to buy the super-expensive, energy efficient bulbs that “will pay for themselves in only a few years.” We burn those out, too. True story.

Secondly, there’s the electric bill. I have purchased cars—entire cars—for less than what I have paid for the last two months’ worth of electric bills.  But you try telling a child that electricity costs money and they will just roll their eyes and go back to trying to stick a fork in the electric socket.

Money and kids is a tricky area. Growing up, my parents never talked about money. Granted, they taught us that it had value. From an early age, the basics were provided – food, clothes, and shelter. But if we wanted extras, and yes, I do mean Jordache jeans, we had to work for them.

Whether it was saving up allowance, babysitting, or doing really odd jobs for our grandparents, we did what we had to do to get what we wanted. And we were given opportunities to earn, save and spend, all with my parent’s guidance. Looking back, I know how hard my parents worked to raise five kids, put us through college, and make sure no one ended up lacking in any way. But they didn’t talk about how hard it was.

For my kids, their early years were defined by their father being in graduate school, which really just made us starving college students with non-paying nanny gigs. Things were tight. We lived modestly and I trained them early not to sing the anywhere-in-public anthem that children inherently sing: “Mom, can I get this [insert name of useless item here]” We would discuss it before we even got out of the car, and they knew that, even if I had been considering a treat, I would say no if they asked. It was to be my surprise or nothing at all.

But again, I wasn’t teaching them about the value of money or how it related to things, I was just teaching them that I was a really mean mom who didn’t want her kids to have nice things (to hear them tell it). Also, not to be whiny. I was also teaching them that.

After grad school, money became less of an issue. We lived overseas for a couple of years. We traveled a fair bit. We had some really amazing vacations that we could never have afforded before. And, while I didn’t suddenly start buying them everything they laid eyes on, I was able to be a little less stressed when we went shopping, which just means that the lines between “need” and “want” became a little blurrier than they had been before.

When the girls’ father and I separated, the line went from blurry to almost non-existent for awhile. It was all too easy to fall into the trap that many divorced/divorcing parents fall into—mainly, compensation for the family split. I can’t speak for him, but I can only speak to the situation as I knew it.

And now these days, being a single mom of three kids means that money isn’t always plentiful. We have slowly but surely returned to the days of redefining needs and wants, and finding out that the former will always take priority over the latter. But it’s been a roller coaster and, in that, it’s been hard to set a consistent standard.

Most experts will agree that talking to kids about money in terms of specific amounts or in a way that will cause stress or worry is not a good idea. However, that does not mean that we can’t have discussions about money, its value, and how to use it responsibly. In fact, considering the fact that most of us are hoping that this whole parenting experiment results in adult offspring who do not live in our basements, emerging only to drink the rest of the milk and leave the empty carton in the fridge, it’s actually to our kids’ benefit that we talk about money. After all, the goal is for them to pay their own bills eventually.

I talk about everything with my kids—for better or worse. But I have tried to be careful about money. I’m a worrier. I wish I weren’t, but these are the genetic cards I was dealt. And like many of us, money is one of the things I worry about. But once I embarked on the intentional journey to teach my kids about money, I have found that I can actually calm myself down when I discuss money reasonably and rationally with my kids.

While I don’t get into bank account details, I do explain to my kids how and why I make many of the financial choices that I make. And when we have a splurge—whatever it might be—we talk about that, too. I explain how I have set money aside for special treats. And how it’s ok to have nice things or treat yourself to something special, but when it’s something you’ve set money aside for, it has more meaning and value.

In order to get them to understand the value of money in a more realistic way, I’ve instituted a few things that I’ve found to be helpful.

1. We keep a change jar.

They never cease to be amazed at how much we have saved up when it comes time to cash it in. This gives credence to the saying, “every penny counts.”

2. While I personally don’t give my kids a regular allowance, I do give them the chance to earn “extras.”

If there’s something special they want, they can earn it by doing extra chores around the house, in addition to their regular chores. My goal here is to teach them that you don’t necessarily get rewarded for doing what you’re supposed to do, but you do get rewarded for going above and beyond.

3. For vacations or special event shopping, everyone gets a pre-allocated amount and the power to spend it however they want.

When we have a special outing or even a shopping trip, everyone gets a pre-allocated amount. They then have to make their own choices about how to spend that money. I find that gift cards are a great way to put the power in their hands—and keep them from spending all of their money on random candy the second they have some cash. You would be amazed at how gratifying it is to watch a ten-year-old debate over an item, only to determine that she doesn’t need the one with all the bells and whistles when something simpler will save money and work just as well.

4. We’ve turned bargain hunting into a game. 

When my daughter came home the other day, her first words were “Mom! I only paid $4 for these shoes!!” You would have thought she had just won the Nobel Prize. Granted, they were, quite literally, the ugliest shoes I have ever seen, but hey, who am I to argue with a bargain. We intentionally hit sales and our favorite part is looking at the line on the receipt that shows “how much you saved.”

5. We give what we can every chance we get.

My girls and I talk constantly about how fortunate we are. My kids have been lucky enough to have the opportunity to live in a developing country. They saw first hand what true poverty looks like. They were at volunteer events and fundraisers since before they owned their first piggy banks. But privilege is an easy blanket to wrap yourself in. So we give whenever we can. On a recent trip to Chicago, no one asked me for souvenirs or silly t-shirts they would only wear once. But my youngest did stop and ask if she could have some money to give a homeless man that she saw doing a kind gesture for another person. At that moment, I only wished that I had more to give.

Money, like everything else in life, is about our perspective. Having “enough” of it really comes down to how you view it. No one wants to struggle. And no matter how fortunate we are, we want to raise our children to have just as much or more than we did. But teaching our kids now that money is something that we should value—not as a thing in and of itself, but as a means to an end—is only going to help them down the road.

My kids may never turn the lights off. But one day they will have their own electric bill to pay and they’ll remember my constant nagging with something that I hope resembles fondness. In the meantime, we will keep talking. Because that’s where real change starts.