Money, Salaries, And Debt Shouldn't Be Taboo Topics With Our Kids

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mother and daughter putting money in piggybank
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Money was never a topic we talked about growing up. When I was seven, I asked my dad how much money he made and he snapped at me, telling me never to ask anyone that question because it was extremely rude.

When my parents divorced in my teen years, I got a job as soon as I could so I could make my own money and spend it how I wanted. Not only was I afraid to talk about money with anyone, I felt a strange pressure to always have a job and make as much as I could. It wasn’t a good feeling and I still struggle with it. As a mother, I want my kids to have a healthy relationship with money.

It’s important for kids to learn the value of money, but it’s more important they don’t feel the subject is off limits, or talking about should be a one-sided conversation. If I talk at them about money are they going to learn and be curious? Probably not.

According to Next Gen Personal Finance, only one out of six high school kids in America are required to take a standalone semester of personal finance, which means this life skill falls almost entirely on parents’ shoulders.

Brad Klontz, the author of Mind Over Money and the co-founder of the Financial Psychology Institute, explains people suffer from money disorders which he explains are “often the result of underlying psychological issues like anxiety, depression or trauma.”

Yet another reason to get our kids on the right track as soon as possible.

Tim Sheehan, CEO and co-founder of Greenlight, a financial management app for kids, told Scary Mommy, now is the perfect time to be teaching our kids about the importance of money since they are learning remotely and we have more time and opportunities to teach and talk with them. Not to mention many families are cutting back because of lost wages, or having to dip into an emergency fund.

I’ve always been open with my teens about money and never want them to feel like money-talk should be taboo or that they need to hide their feelings or questions, but I’m learning it needs to be a constant conversation.

Yes, this time is difficult and parents are taking on many new roles, but it really is a good time to start teaching our kids about money since we have some extra time together. We may also be making some difficult financial decisions and changes to our budget as a result of the pandemic.

Sheehan suggests having a talk about wants vs. needs if you aren’t sure where to start. This is especially time-sensitive now since a lot of us are seeing pay cuts, collecting unemployment, and not sure of our financial future. I always try to prepare my children and without scaring them and there’s nothing wrong with telling them something just isn’t a priority right now.

“Talk about how they might prioritize and allocate money once they start earning — whether it’s from chores or a part-time job,” Sheehan recommends.

It’s also important to teach your kids about credit card debt. I’ve been talking to my kids about this more lately after realizing they thought a credit card was just money that was available at all times. They had no idea you had to pay it back with interest once a month. It won’t be long until my oldest is going to be getting credit card offers thrown at him left and right. I want to prepare him so he can take the information he knows and hopefully make an educated decision on whether he really needs a credit card at 18.

“The national average household credit card debt is $5,331,” Sheehan says. “We can lower this number by giving kids debit cards and the responsibility to manage money at a young age.”

Money talks don’t have to be dry and boring. You can get them involved by making a game out of it. Sheehan suggests having them figure out the tip for the food delivery driver, calculate sales tax, and you can always break out the good ol’ game of Monopoly.

Personal finance expert Rachel Cruze, co-author of Smart Money Smart Kids: Raising the Next Generation to Win with Money, tells NBC News that parents should always be talking about the three principals: Giving, saving, and spending.

“Giving is one of the most important of the three categories because you’re teaching them to feel the impact of helping others at a young age,” Cruze says. “That’s invaluable.” She adds it’s important to have your kids save and spend some of their money after it’s earned and implement when their money is gone, that’s it. Stand strong and not give them more.

“Yes, your kids will make mistakes, but it’s better that they make those mistakes under the safety of your roof,” says Cruz.

Jim Brown has been in the finance industry for over 30 years. In an article he penned for CNBC, he writes that he never gives his kids money freely for things they don’t need. Instead, Brown gives them a weekly allowance and teaches them how to budget, and investing their money by taking them to the bank and showing them how their money can grow.

Brown adds the easiest way to teach your kids about money is to take them through the budgeting process: “When my kids get invited to a birthday party, for example, I give them a reasonable budget and help them shop for a gift that stays within their price lane,” he writes.

It’s not always easy to teach our kids lessons about money. I struggle at times. Like, when my daughter wants me to order her something online which costs $15.99 plus tax and shipping and she hands me over $15.00 instead of the full amount it costs. Or when my son’s car insurance gets taken out of my checking account and I have to remind him three weeks later to pay me for it.

I’ve had to remind myself that it’s not about being stingy or “taking” money from my children. It’s about teaching them that in the real world there are consequences if you don’t pay your bills on time, and you always need to read the fine print and see the exact price of something so there aren’t any surprises in the future. I can’t coddle my teens, then send them out in the real world and expect them to make great decisions when it comes to their finances.

The earlier you start talking to your kids about money, the better, so why not now while we’re cooped up together? When kids learn about money early in life the hope is that they will be more comfortable when they go out on their own.

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