Pam Lavers
Co-Founder, The Tower Group

Start talking to kids about money. Now.

Raising children in a wealthy household can create some special challenges for parents. It’s no secret that most families don’t like to talk about money, even wealthy ones.

Managing money, whether we’re earning it or spending it, is a part of everyone’s life. Knowing how to use money is important practical knowledge our children actually need and use in their adult lives. Your children are going to learn about money from someone – so it should be you. Take every opportunity to be the positive, guiding influence they can trust.

Reflect and articulate
The first step in talking to your children about money is being solid on your own beliefs and values around money.  Answering the following questions about money may be difficult, even painful. But, the answers should help you affirm what you want to continue to model for your children, and also what you wish to avoid.

  • What was the attitude of each of your parents toward money, and how did it affect you?
  • What was said directly to you about your personal relationship toward money when you were growing up?
  • What did you learn about money from watching other family members, friends and peers?
  • What does money mean to you now? What do you see as its greatest value? Its greatest danger?
  • What are the attitudes about money you’d like to teach your children? How are you doing that? What changes would you like to make?

From Children of Paradise, Lee Hausner

How would your spouse answer these questions? Are you on the same page or are you giving your children mixed messages?

Money and emotions
Think about your beliefs, attitudes and behaviours around money. Do you…

  • Believe money is power?
  • Use money to reduce guilt?
  • See money as the ultimate fixer?
  • Believe money is a measure of personal worth and having possessions means happiness?
  • Consider money a men’s issue?

There’s no absolute right or wrong when it comes to behaviour around money. It depends on circumstances, individuals and consistency of actions.

Actions speak louder than words
With money and finances, follow the golden rule of parenting and lead by example. Kids are the ultimate lie detectors, and they know more than you think they do. If you consistently practise financial responsibility, delayed gratification, financial prioritization, and a work and reward ethic, your children are more likely to do the same.

Talk about values, not numbers
You don’t need to share your income with your children, or the exact amount of major expenses. Instead of numbers, help your children understand concepts like saving, budgeting, living within their means, paying off debt and giving. Watch for opportunities for conversations. By asking your kids questions about what they know and think about money, you can focus on how your family lives your values and help them formulate their own answers.

Teach, practise, participate
Give your children the opportunity to become financially capable. When they have their own money to manage from an allowance or job, help them budget and think beyond their immediate wants. Think about the satisfaction you felt the first time you paid for your own special something. Help your children earn and enjoy this same pride, self accomplishment and achievement. If your children have expenses (a cell phone bill?), help them figure out how to pay for them. Download an app that helps track their spending habits so they can see how far their money goes.

If you have teenagers, you’ll want to start talking about post-secondary education – the costs and expectations for their participation. This is when conversations about budgeting, working and debt will really hit home.

If you own a business, share your knowledge about running a successful business. Consider giving them a role that matches their abilities and interests, and is age appropriate.

It’s never over
We don’t stop being parents until our lives are over. Like all other aspects of parenting, talking about money is never done. If you do it well, your voice and values will live on to guide your children as adults, even after you’re gone.

Start talking now and keep those conversations going.