So when a money crisis develops, the potential to pass fearful and negative attitudes towards money to the next generation increases.
How effective are you at talking about money? What words do you use when you talk about money in front of or directly to your children? Below you will find a list of the some of the best things you can say to your children about money. Use it to gage your money talk skill level.
- “It’s allowance time. Everybody get your envelopes!” One of the main reasons for having allowances is to teach children about budgeting. The envelope system can help you do this.
- “I’m willing to pay part of it.”
- “Did you bring any of your money?”
- “The car needs to be washed. What do you think that’s worth?”
- “Help me figure out the tip.”
- “Oh, I think you gave me the wrong change.”
- “Our charity jar is almost full. What should we do with the money this time?”
- “Bummer. Sounds like you have a money problem. What can you do about it?”
- “You don’t have to wait until you’re a grown-up.”
Children are concrete thinkers. This means if it is not in their hands, it is not in their minds. Envelopes will help make teaching the idea of budgeting a concrete process.
Label envelopes with several budget areas, including savings, investment, charity and spending. Children can divide their own allowance by placing the amount of money they choose in the appropriate envelopes.
This phrase is useful when your child wants something that exceeds the budgeted amount you had earmarked in your budget. If you had $80 set aside for sneakers and they want a pair that costs more than $100, this sentence defines your limit. It also invites the child to take responsibility for coming up with the difference. It curbs feelings of entitlement and allows children to take ownership for achieving their desires. In addition, if some of their money is invested in the article, they are more likely to take care of it.
This money talk question is helpful for those situations where children ask impulsively for things while you are shopping. It helps them to see that they need to have forethought in the money purchases they make.
The purpose of a child’s allowance is so they can learn how to spend, save and use money. If they want or feel they need more money than the allowance provides, there are additional ways to get it.
Doing out-of-the-ordinary jobs around the house, over and above their normal chores, is one way for them to earn additional income. This will help them internalize the concept that if they want more they can work more.
This type of money talk helps children in several ways. In addition to providing a real life example to use basic math skills, it also gives children the awareness of the cost of the meal so they can appreciate what is being provided for them.
Learning about tipping also gives children the message that being appreciative for the service provided is expressed in the form of a tip.
Allow your children to overhear you telling cashiers or waiters when the change is incorrect. If you were short-changed, it models sticking up for yourself. If you received too much change, your words demonstrate honesty and communicate integrity around money.
Teach the charity habit by contributing to a charity jar regularly at allowance time. Set a goal as a family as to how much you want to accumulate during a specific time frame. Watch as the jar fills up with the individual family contributions.
Decide together where to donate the money. Give your children opportunities to have input on this important decision.
This piece of money talk communicates to children that the current money problem they face is their problem. It informs them you will be the supportive listener, but not a rescuer. With this style of language, you also remind yourself that there are times when allowing children to experience the consequences of their actions and choices is the best way for them to learn.
Children can make money, own a business, save money, invest in the stock market, and give to charities. Money is not just for adults. It is for anyone who has parents who are willing to help their children become financially literate.
Chick Moorman and Thomas Haller are the authors of “The 10 Commitments: Parenting with Purpose.” They are two of the world’s foremost authorities on raising responsible, caring, confident children. They publish a free monthly e-zine for parents. To sign up for it or to obtain more information about how they can help you or your group meet your parenting needs, visit their Web site today: www.personalpowerpress.com .