How to Talk about Dollars and Sense 
Parents have no shortage of life lessons to pass along to their children as they grow up. Near the top of the list: finances.
“Money management is a critical life skill,” says Brendan W. Freeman, Senior Vice President & MidAmerica Regional Executive for Regions Private Wealth Management in St. Louis. “Our children are growing up in a world where there is instant gratification and everything is readily available. So it’s important for children to know that money is not an endless resource — that it doesn’t magically appear from an ATM or grow on trees.”
Don’t save the money discussion with your children for a one-time special event where you fit in every money-related topic possible. Instead make the subject of money part of everyday conversations as you explain the connection between hard work, earnings and savings, and debt.
You’re likely to find the apple doesn’t fall from the tree, and your children can become prudent investors after years of observing their parents making financial decisions.
“Through osmosis they will pick up on good behaviors they saw in their parents, and as adults they will look back and remember their own parents’ approach to money,” says Freeman, who has more than 18 years of financial services experience. “Kids are far more observant than we give them credit for, so the more practical money education we can give them, the better off they will be.”
Here’s how you can make the topic of money relevant to children at every stage of life.
Money Talking During the Toddler Years
Talk about money in a practical sense. Describe how we all must wait in order to save money to buy toys we want. This is tough because most toddlers by nature are not patient.
Also remind your toddlers that they won’t receive every toy they want. They should start to look at money from the Tooth Fairy or for birthdays as a chance to save, and put those dollars toward a bigger ticket item.
“It’s OK to let kids at this age know that we work for a reason, and that is to put food on the table. Money is not just for fun and games,” Freeman says.
Money Talks During the Grade School Years
By now your children understand the concept of money and may want their own spending cash, especially if you don’t pay for everything. This is an appropriate time to get 10-, 11- or 12-year-olds into the practice of earning their own dollars to shop, buy apps, or even pay for movie tickets. Encourage your kids to open a lemonade stand, mow lawns, rake leaves in the neighborhood, or babysit.
It’s a good time to teach children about paying themselves first and investing their earnings in long-term growth. Finally, teach them about giving back to the community through stewardship by dropping envelopes into the collection basket at church or donating to a favorite charity.
Money Talks During the High School Years
Many teens have jobs, and their paychecks mean financial independence, as they’re able to purchase items they want. A good lesson at this stage is asking teenagers to save for some college expenses, their first vehicle, or buying gifts for others during special occasions. If your teen drives a car, he or she could help pay for gas or vehicle maintenance. “The sooner they have some skin in the game, the better off they will be,” Freeman says.
From an investment standpoint, this is a good time to let your children dabble in the stock market by introducing them to your financial adviser, or to apps that allow you to “invest” in real stocks and track how they perform.
Before your child heads off to college, he or she can be well-armed with information about savings and investments, as well as being independent enough to pay for his or her own entertainment.
At every stage of your child’s life, you can impart financial responsibility and ownership. Learn more about sharing financial values with your kids.
