Expert Advice for Talking to Kids About Money

April 03, 2024 by First Federal Bank

bigstock-Savings-concept-Mother-and-li-143533358April is National Financial Literacy Month, a great time to start teaching your children about money. There are important life lessons you can impart at every age, and the earlier you begin, the better. Whether you want to cover the basics, delve into more complex topics, or simply get the conversation started, there are many ways you can approach the subject.

And remember, it is not a one and done situation. You should continue to teach your children about money as they grow older, and closer to becoming independent adults.

According to financial advisor Alexa von Tobel via MSN, you should keep these three important things in mind when talking to your kids about money:

Tone is 'really important'

Parents need to talk about money in a "matter of fact" way, so their kids grow up with a healthy relationship with it, von Tobel says. Teach them that it's worth discussing, but not an all-important facet of life.

Money is, simply, "a tool to help you live the life you want to," von Tobel says. If you work hard, you can earn money. If you're thoughtful about managing it, you can ensure you always have enough to buy what you need and, if you're fortunate, what you want. Credit cards aren't magical items that can buy anything.

Keep it practical

Talk to your kids about money in ways that make sense to them, von Tobel advises. That could mean talking about how much everyday items cost, like noting that a bottle of water costs several dollars at the zoo, versus only a dollar or two in a corner store.

"When you're walking through a store and your child wants something, pick it up [and] show them the price," says von Tobel. "This costs $29. Mommy doesn't have the $29 for this today, but we can think about saving that for your birthday."

This approach teaches your children that costs vary, she says: Not everything you need or want is easily attainable if it's expensive, so be mindful of prices and how much you can spend safely.

Make it fun — and empowering

Budgeting can be a fairly dry topic. Who wants to save for the future when you can spend on candy and toys now?

To keep kids excited about saving and budgeting, von Tobel recommends talking about it in an 'upbeat, empowering way.' Ask what they'd enjoy spending money on, and discuss different ways they could earn and save the money they need to buy those things themselves. …

Adults often associate money with stress, because they're only thinking about "the things you didn't have," von Tobel says. 'Trying to orient kids to have very positive, empowering moments around money early in their lives, we know from data [that] can change their life."

You can view the full article here.

First Federal Bank is committed to supporting financial literacy, particularly among youth. From our Tiger Bank initiative, to special events, to providing parents with the knowledge and tools they need to have these essential conversations, we are committed to ensuring our current and future customers have the information and tools they need to build a solid financial foundation for life. Have questions? Contact your local First Federal branch today!

Categories: Financial Education

Leave us a comment and join the conversation.