Money Talk: A Family Conversation

Beth Cuddy
March 16, 2023

Money and financial planning go beyond math and simple budgeting. There are habits involved, various motivations and behaviors to understand as well as the calculations. Caregivers find it more uncomfortable to talk to their kids about money than having “the talk”. Here are ways that you might make the conversation with your kids about personal finances easier.

1. Start Early

The earlier you start talking to your kids about money, the more time they will have to understand and develop healthy financial habits.

2. Use age-appropriate language

Ask them questions to see their level of understanding. “How do credit cards work?” Explain financial concepts in a way that your child can understand based on their age and level of comprehension.

3. Lead by example

This is a tricky one but being transparent and open about where you can improve also helps. Tell them about a financial decision you had to make and what went into making that decision.

4. Teach the basics of saving, spending, and giving

Teach your child the importance of saving a portion of their money for future needs, spending wisely, and giving back to others.

5. Encourage hands-on learning

Encourage them to set goals and to make difficult decisions,” I only have $10, I can’t get stickers and the pins, which should I get or should I save it all for my goal?”.

6. A sunny day fund

Also remind them that unexpected things come up and if they have a “sunny day fund” they will have the $ to get/do the thing. Maybe they should have a minimum amount that they always keep as a backup.

7. Be open and honest

If your family is facing financial challenges, it’s important to be open and honest with your child about the situation. Teach them the value of budgeting and making do with what you have. While they may not get to have a say in your decisions, being transparent with them about the process will teach them by example. Money should not be a taboo topic in your household.

By following these tips and having regular, open, and honest conversations with your kids about money, you can help them develop good financial habits that will serve them well throughout their lives.

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