I’ve recently realized that teaching my kids about money is a lot harder than I once thought.
This post will help me to sort through these thoughts and allow me to remember what I intend on teaching my kids when it comes to money.
It wasn’t that long ago when my kids were super young and I didn’t have to worry at all about money conversations.
Now at ages 6 & 4, they are aware of money, and even credit cards. Their fiscal innocence is nearing an end!
My Daughter’s Exposure to Money
At age 6, my daughter is learning about money from many places (parents, grandparents, cousins, neighbours, & friends). Up until now, the extent of our money conversations has been playing with their cash register and occasionally letting her swipe my credit card at the market.
She also understands that her grandpa works really hard to “earn money” and it pays for food and other things “needed” in life.
During her birthday and other special celebrations, she collects red gift envelopes filled with cash. It could be upwards of $100 or so, and I meticulously track it for her college fund.
My Son’s Exposure to Money
As for my son, well he watches sister closely and is learning about money faster than she did at his age.
He sees that his sister wants money, so he does too naturally.
In fact, a couple of months ago, I told my newsletter readers about a time when he stole $40 from Mom’s bedside table!
He went so far as to stash the cash into his own wallet and then played 100% innocent.
What They Don’t Understand
They don’t, however, have a concept of how much things cost. If my kids only knew how much $100 could buy them (100+ candies, 10,000+ stickers, or any toy he/she could dream of)… well, that would ruin them… haha.
The interesting thing with this generation is that I rarely use cash anywhere. So, trying to bridge the knowledge gap between coins, cash, and electronic payments will take a little longer than when I grew up in the 80s.
It hasn’t happened yet, but I’m simply waiting for the day when they ask, “Why can’t I buy that if I can afford it? Isn’t that money mine?”
Also, they know that we “give” money to charity, but they don’t quite get “why” we do it. I did take the whole family to the rescue mission where they feed the homeless and help get people back on their feet, but that exposure needs to occur regularly.
Finally, they have no concept that we are relatively well off (i.e. upper middle class+) and don’t think twice that both parents are involved with them daily.
Daddy Does What for Work?
Because I’ve been home with my kids since they were born, it’s easy to forget to explain that “not going to work” isn’t normal.
I only recently told my daughter that I used to run a company, to which she replied, “You did!?”
It was a completely foreign concept to her that I used to “work” in a more traditional sense.
Then, somewhere along the line, she learned from a neighbour that I was a food blogger.
And, that’s become my most recent identity to her. It’s a bit hard to explain to her that’s simply 1 of a half-dozen other identities I take on these days. But, for now, I’ll simply leave it alone.
BTW, when should I even start the conversation about FIRE with them?
So here’s the challenge so far.
I don’t think I’ve been teaching my daughter and son enough about money.
They are getting most of their money ideas from other people and media.
I don’t want them to be limited by beliefs like…
- You have to work your whole life for money
- You need money to make money
- You shouldn’t talk about money (my fault so far!)
- I’m too young to need to know about money
On the other side of the coin, I don’t want them to think…
- Money comes easy, so I don’t need to work for it
- We have a lot of money, so it’s no big deal
- I should be able to buy anything I want
- Money is the source of my happiness
How do we provide the best for our children, without spoiling them or denying them the natural hunger or drive to succeed?
If you’ve read my blog before, you know that I’m a huge proponent of balance. And I don’t think teaching kids about money is any different.
I guess I’ve just been avoiding it because they were so young, and now all of a sudden they’re little humans running around the house!
So, I guess it’s time to tip the scale back into balance.
I think the goal for our children is to teach them these key lessons about money…
- Money is an important tool, and you should learn to use it well
- Money should be saved, invested, and made to work for you
- Money should be used to supply a family with basic needs first, great memories, and then things
- Money should be shared with others
- Money should not be spent frivolously
- Money should not be hoarded
- Money does not define you, or anyone else
I’m sure I forgot a few, but part of this post is to remind me in the future. So, I’ll update this as it evolves.
Teaching kids about money it really boils down to instruction, observation, and learning by doing.
Although I believe we are doing a lot of good things with money in our family, it’s probably not visible to the kids. So, as they continue to get older and more aware, I need to make it a point to spend more time with them and be patient with questions revolving around money.
Sharing what and WHY we do something will go much further than us telling them what to do.
If I think back to when I was a kid myself, I learned the most from watching my parents and observing those within my extended family.
It’s important to never limit a child’s imagination when it comes to money or career.
Well, we have a long way to go with our children before they are fiscally responsible adults. And, I’m confident they will be fine if we take a balanced approach.
In the end, we all have to make choices and decisions for ourselves, so we’ll also have to “let go” at some point and allow them to fail sometimes.
It’s easiest to fail when you’re little, so perhaps it’s almost time for them to learn about chores and an allowance.
Readers, what are your thoughts when it comes to money and kids? Do you believe in giving an allowance for chores? What else should I be aware of as they grow older?
- The Truth About Financial Freedom - December 5, 2022
- Teaching Kids About Money is A Lot Harder Than I Thought - November 17, 2022
- Finding FI Interview #43: Invest in what you understand with Alexander Kelm - October 31, 2022