Raise Good Savers: Talking Money with Your Kids

When I was a teenager, money was a subject rarely discussed around our household. My parents both worked, but neither would discuss how much they made, what our debt situation or savings picture was, or any other aspects of our financial health. I imagine this is true for many households. But teaching kids about money—and preparing them for the world outside your walls—doesn’t have to mean opening up the checkbook or boring them to tears with tutorials on how interest is calculated. It can be much simpler, less overwhelming, and ultimately very valuable.

Conversations about money could and should start relatively early, even if at first it’s just a discussion about the ways in which money is earned, saved, and spent. Teenagers and even younger kids should understand the guidelines your family follows when deciding when to make a purchase and when not to. These discussions could come anywhere, from the car ride on the way to dinner out, to the cash register at the local Game Stop. Young people who understand the value of money, its scarcity, and the opportunity cost of buying this rather than that are better positioned to start making their own financial decisions when that time inevitably comes.

Do your children know that you have a monthly budget, with some funds set aside for the basics like a mortgage, life and auto insurance, the electric and cable bills, and the weekly groceries? Do they realize that in addition to handling those daily and weekly expenses, you are setting money aside for a rainy day, for their future education, and for your retirement one day? It may go in one ear and out the other, but telling your early teenaged children about the realities in life may help them better appreciate why you sometimes say no to certain purchases. At the very least, it will let them know that you have an overall financial plan in mind. (Presuming that you do have an overall financial plan in mind!)

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