by Thomas Haller and Chick Moorman
Many parents do not know how, do not want to, or lack the communication skills necessary to talk to their children about money in general. 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 ten best things you can say to your children about money. Use it to gauge your money talk skill level.
One of the main reasons for having allowances is to teach children about budgeting. The envelope system will help you do that. Children are concrete thinkers. That means if it is not in their hands, it is not in their minds. Envelopes will help you make the teaching 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 over $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.
Money comes to us in a variety of ways and in unexpected times and places. Finding a coin on the ground is a sign that the universe is continually active in providing money for those who are open to receiving it. Stay open and allow the Attraction Principle to bring you money even in the smallest of ways. It is a sign that more it is on the way. Appreciate what you receive verbally so that your children can hear your gratefulness.