Talking To Your Kids About Money

When I was growing up, my parents NEVER talked to my sister's and me about money. I never knew anything about our bills, our budget, what my parents salary was. NOTHING. I remember when I got my first job, my mom told me I had to save some of my paycheck.  That's it. No reason. When I was applying to college's I had to fill out everything of mine and then my parents would fill out the finances. I was told to just sign it. I knew nothing about finances. Hubby's dad was the same. He new nothing either. So we started our married life out with no financial knowledge. It was not all roses. We ended up with credit card debt, car loans and student loans. We took on a mortgage that was too big for us but we didn't know that. No one told us. The banks told us we made enough so we listened to them. Big mistake. It took us years to get out of the money mess we had made.

We want to make sure that our kids never make the mistakes that we made. We talk to them regularly about money and finances.  I am always listening to Dave Ramsey podcasts, so they hear them too. We talk about the stories we hear. I think my kids know more about money at 16 then I knew at 30. Each of our kids does a budget every month. They use Everydollar by Dave Ramsey.  It is a free budgeting tool that you can do on your phone or computer. I go over their budget with them every month to make sure they stay on track.  They also have gone over Hubby and my budget with us. They have sat down and done our bills with us. I have made them pay them online and by check. When my 2 oldest were applying for college they did the paperwork. I watched and helped. They punched everything in themselves. My youngest will do it next year when she is a senior. My son just did his first tax preparation. He has a job, so Hubby sat with him and they did it online. My son did all of the numbers. They all have their own bank accounts. They go to the bank and put money and checks in. They also go if they want money out. OD and my son both got a debit card when they turned 17. YD will get one this year when she turns 17.

Our kids divide their money into 3 categories. Saving, spending and giving. They do some of each every month. Saving for goals is good. Everything does not need to be purchased this minute. Spending is also good. You don't want an Ebenezer Scrooge. Giving is very good. They will always be those less fortunate. Let your kids learn young to help others. It will become a lifelong habit.

Are our kids understanding everything we tell them? Probably not. But that is OK, because the 2 youngest still live at home and are learning. I still don't know everything. We are here if they have questions and they know that. We get questions from them all the time. When our OD started working full time she had lots of questions. We helped her through it all. We do not hide money issues from our kids. They knew we were in debt and they lived through us getting out of debt.

Every year we give our kids a set amount of money for back to school. That is all they are getting. If they go spend it on a pair of expensive sneakers then that is all they get. This has never happened. They shop sales, look at clearance or wait until school is back in session and buy a little at a time. Back packs and lunchboxes get used year after year. They go to thrift stores to see if they can find items. My daughter even does a clothes swap with friends. Its new clothes to her.

We had a Sweet 16 party for YD last year. She was told that we were willing to spend a certain amount. She then had to make a budget. We went over it with her. If she wanted to have something else in the budget then she had to give something up. We made all of the decorations ourselves. She invested her time into making them instead of buying them. We made the favors also. Homemade is always cheaper. She had everything that she wanted for her party and we came in under budget for the party.

Our son works and goes to college. He also pays for part of his school. He knew that before he ever got to college. YD knows it too. We didn't tell him 6 months after school started that he was going to start paying. We told him as a freshman in high school. They both have savings set aside for it. I truly believe that if they have to be financially invested in it they will do better.

I have teenagers, but what if you have young kids. Start small. Have them help you with grocery shopping. Say you give them $10 to get the foods they like. That's it. Help them see that if they only buy cookies then they won't have their favorite cereal. Tell them they can save some of the money for next week when the cookies go on sale and then they will have more money. Teach them that saving money is as much fun as spending. Teach them to give. Have them spend $1 of that money on an item for the food bank. They learn better from seeing what you do, so show them.

Go to your local library and look at books about money and kids. There are tons of them. Dave Ramsey and his daughter Rachel Cruze wrote a book called Smart Money Smart Kids. It is wonderful. I recommend reading it.

If we all start talking to our kids about money and finances, they will be better off in their futures. Let them know the mistakes you made. Let them learn from your mistakes so that they don't make the same ones. I am constantly hearing about student loans and 20 somethings with massive credit card debt. Lets stop this. Lets talk to our kids about money. It can only help them.