5 ways to start a money conversation with your kids

Most people parenting teens grew up in households where the financial discussions happened betweens the adults. While you may have been encouraged to get a job and do the grocery maths, you might’ve grown up shielded from the learning opportunities that come from making financial mistakes. I was saying to a parent-friend of mine the other day, that owning up to money mistakes feels similar to exposing the way you lost your virginity—risky, awkward, and even embarrassing. This guest post on Teenage Budget, from the team at Clover, came with perfect timing. Thanks for sharing it!

There’s more to life than money – and it doesn’t necessarily make you happy. And, as The Beatles so famously crooned, money definitely can’t buy you love.

But that doesn’t mean it’s not important – or that you shouldn’t find a balance between understanding the importance and power of money, and not letting it run or ruin your life.

So while it won’t buy you happiness or love, imagine your kids growing up not knowing how to make, save or invest it. Imagine that ‘budgeting’ or ‘finance’ are foreign, meaningless or swear words to their ears.

Now consider this: When it comes to what your children know about what money is and how to manage it in their lives, that’s almost entirely up to you.

First, there’s leading by example – meaning your kids naturally take in your attitude and habits when it comes to money, spending and debt, simply by being observers.

And then there are those sit-down conversations about money over a TV dinner. Are they important? They sure are. Here’s how to start one of them:

  1. Talk about your money mistakes

There comes a time in every kid’s life when they realise that their parents are fallible people, too – and it’s usually a moment of deeper connection.

Yep, we’ve all made money mistakes, and most of those mistakes are filed under regret. You didn’t invest early enough. You racked up too much credit card debt. You spent too much on your wedding.

By openly talking about these little and big mistakes, not only will you reveal yourself as a real person to your kids, you’ll provide an insight into how you came to be wiser about what money means.

  1. Talk about your income

It’s not too hard to start talking to your kids about what money is for. “Look around,” you can tell them over the dinner table. “Money paid for the light in the room. The heat in your roast chicken. The socks on your feet. The app on your phone.”

But these days, particularly as we pay for groceries by pushing a bit of plastic onto a PayWave scanner, children can almost forget that money is even a tangible thing. They can fail to fully understand why you’re attracted to those ‘Special’ labels on the supermarket shelf. And they can almost not realise that getting up and going to work is not just a sensible-adult-thing-to-do – it’s to charge up that magic card with real money.

  1. The media you consume

As a kid, I vividly remember my Dad exclaiming ‘I hate this advert!’ during an evening soap. I didn’t really understand why. It seemed bouncy and colourful and giggly enough.

But now in 2018, even smarter advertising is pretty much everywhere – on your kids’ apps, their YouTube videos, their websites and even in the form of almost subliminal product placement in shows and movies.

Children can so easily be persuaded by the product that has been placed in that movie – so let them know exactly why a company might be doing such a thing. Entertainment is cool, but commercial scepticism is crucial.

  1. The things you love

All of us have hobbies, passions, loves and goals. Maybe yours is cycling – requiring a flash-as-can-be $10,000 road bike. Maybe it’s an end-of-year overseas trip. Maybe it’s a cushy retirement and an endless stream of five-star cruises.

Your kids need to understand that while these passions and goals are what life is all about, they also require budgeting, saving and investing … boooring!

In other words, skipping a Sunday breakfast at the cafe, accepting some overtime, or setting up an account at Clover may not be for immediate Millennial-style gratification, but instead part of a grander scheme that will pay off nicely a little further down the track.

  1. Your money attitude

Just as the world of advertising wants you to almost mindlessly consume its money messages, it’s the same deal beyond that as well. For instance, your credit card company tells you the minimum amount to pay – but doesn’t necessarily tell you that it’s much wiser to pay a little more back than is recommended each month.

It’s the same when you’re dealing with a company or a boss. Product or service not good enough? Tell your kids how you dealt with your demand for a refund or your complaint. Angling for a pay-rise? Let your kids know that there’s a fine line between being a nuisance and being assertive enough to get what you really deserve.

Money and kids: It’s a balance

Yes, talking to kids about money is a balance. Finance is not everything, and it’s not the key to happiness – but getting a firm understanding of how the financial world works and a healthy attitude towards money is much more than empowering for your kids – it’s nothing less than a key to financial freedom. So while not making it THE topic of dinnertime conversation, definitely don’t make it a taboo, either. Bon appetit!


About Clover.com.au

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In less than five minutes we’ll use Nobel Prize-winning investing principles to build you a customised, low-cost portfolio tailored to your level of risk.

With Clover, there’s no initial set-up or account opening fees, no advice fees, no rebalancing fees and no exit fees. You’ll get a better investment experience, for a fraction of the cost of traditional advisors. No contracts. No hassles.

Visit Clover.com.au and start making your financial goals a reality.

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