How to talk to your kids about money

There are so many conflicting opinions on talking to kids about money. Should you burden them with the realities of our world before they even start understanding it? Or should you introduce them to the fabric of our everyday lives before they make any assumptions about how money works? And if you should introduce them, how early should it be?

Should you talk to kids about money at all?

Not talking to your kids about money would be a disservice to them. And by ‘discussing’ money, I don’t mean lectures on macroeconomic concepts or analyzing investments. It’s simply to make them aware of this tool that we possess and run our everyday lives with. Kids are as observant as they are curious and helping them understand money will empower them to have more confidence when it comes to their finances as they grow older.

But what is the right age?

I recently ran a poll on my Instagram broadcast channel (you should join it if you like random conversations on money!) where, interestingly, the bulk of the respondents felt that the right age to speak to kids about money was between the ages of 8 to 15. While this seems sensible given that kids only start communicating their thoughts and opinions about the world around them at this age, they start observing the world around them way earlier. They’re already seeing how we react to money – whether it’s good or bad.

Experts state that kids start picking up values like ‘good’ and ‘bad’ as early as two years old, so but in general, ages 5 to 6 is a good place to start.

What do I talk about?

There is no fixed playbook when it comes to talking to kids about money – what really matters is that you start the conversation and acknowledge money (versus sweeping it under the carpet as something that’s not their concern).

Every age group processes information differently, so while it’s important to start talking about money, it’s equally important not to overload them with information. Here are a few areas/themes to consider for younger children in the 5-8 age group (my child is 7, and these are more or less what we talk about):

• Nothing is “free”: We have to give something to get something.
• Money is the output of hard work, so it should be used with thought and care.
• Distinguishing between ‘need’ and ‘want’.
• Delinking money with worth: Having less/more money doesn’t mean you’re worse/better.
• We’re all products of luck: Being born with/without money is not in your hands, so count your blessings and do your best to protect what you have & share with those who don’t.
• Delayed gratification: If you wait, your money will grow to something bigger.

Older kids (ages 10+) can have more practical conversations about saving and spending and maybe be allowed to handle small amounts of money through monthly pocket money. Even older kids (15+) can be taught the basics of investing.

Impact of not speaking to kids about money

A lot of us ended up with fractured relationships with money simply because of our childhood associations with money. At the risk of making a sweeping generalization – we were never taught that money was a tool that we could control. Instead, money was elevated to a higher being that had the power to control us, and the way we viewed the world. It takes a lot of unlearning to be practical about money and to not fear it.

Talking to our kids about money as early as possible will ensure that they build positive relationships with money.

A Few Resources (For Young Children)

A Bargain For Frances is a very cute story for younger children about a badger who gets conned into buying something she never wanted.

The star-bellied sneetches believe they’re better than the other Sneetches—until a man with a star printing machine comes along. This is an incredibly entertaining story that discusses discrimination and incentives.

The Money Bunny books are a series of cute stories about saving, spending, and sharing. They are more direct in their approach to money and are a good starting point for any money conversations you might want to have.

I’m constantly sharing resources, so do consider joining my broadcast channel on Instagram or follow me on Twitter 🙂 Do you have tips on talking to kids about money? Share them in the comments!