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How To Talk To Your Kids About Money

How soon is too soon to talk to your kids or grandkids about money? If they are old enough to ask for a toy or a bike, they are old enough to start learning financial lessons that will last a lifetime.

The best financial lessons are the ones that happen in everyday experiences. Look for opportunities to talk about money, read books aloud and play games that center around spending money wisely. Be open and honest when you discuss your financial experiences—good or bad.

Here are some examples of teachable moments to help you get started:

At the Bank
When you go to the bank, bring your children with you and show them how transactions work. Ask an employee to explain how the bank operates, how money generates interest and how an ATM works.

On Payday
Discuss how your income is budgeted to pay for housing, food and clothing, and how a portion is saved for future expenses such as college tuition and retirement.

At the Grocery Story
It’s easy to give clear examples of “needs” and “wants” using different kinds of foods at a grocery store. Milk (for strong bones) is a need; soft drinks are a want. Explain the benefits of comparison shopping, coupons and store brands.

Chores and Allowances
Assign chores and give them a monetary value. Discuss ways to budget and divide allowances. Encourage children to set a financial goal, such as saving for a bike, and figure out how to achieve it.

Paying Bills
Explain the many ways that bills can be paid: over the phone, by check or online. Discuss how each method of bill pay takes money out of your account. Be sure to cover late penalties, emphasizing the importance of paying bills on time.

Using Credit Cards
Explain that credit cards are a loan and need to be repaid. Share how each month a credit card statement comes with a bill. Go over the differences between a credit card and a debit card.

Browsing the Internet
While online, explain to your children how valuable their personal information and privacy is to you and to them. Discuss the risks and benefits of sharing certain information. Then, as a family, make a list of rules for keeping personal information safe online.

Planning a Vacation
Whether you are planning a weekend trip to the lakes or a once-in-a-lifetime vacation, emphasize the value of saving as a family. Set a family savings goal that involves your children. Figure out the cost and discuss ways everyone can help to reach the goal. You can even set up a coin jar that everyone can contribute to, then bring it into your local branch and count them up - the funds can be used to pay for a fun experience on the vacation.

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