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How to Talk to Kids About Money

Talking to adults about money is hard enough, let alone talking to children. However, that doesn’t mean it isn’t important! At Service Credit Union, a couple of our employees recently chatted with their kids about what money means to them, including what they think things cost. Let’s just say, there’s still some room for learning!

Even if your kids are quite young, like some of the friends in our videos, it’s never too early to instill good savings habits. Here are five easy steps you can take to set your children up for financial success.

Lead by example.

Discuss your own savings goals and explain how you prioritize saving over unnecessary spending. Show your children how you budget and save money for big purchases or future expenses, and use real-life occurrences to create teachable moments about unexpected changes and making important decisions.

For example, next time you’re buying shoes, explain to your child why you’re choosing one brand over another, and how the cost difference can help you save for another larger purchase. Or, take your child to your bank or credit union with you (or show them as you use your mobile banking app) when you deposit money into your savings account.

Sharing your financially responsible choices in age appropriate, child-size doses can inspire your children to make responsible choices in the future.

Need a little help? Our friends at the Art of Allowance Project have resources to get the conversation started with kids of all ages, from their Money Mammals program for young children to their Adolescents program to raise money-smart, money-empowered teens. Check out their parent resource page.

Make saving a family challenge.

Get your children excited about savings by making it a family affair. For example, you can set savings goals for family vacations or special purchases and encourage your children to participate in achieving those goals. This will help them learn the value of saving money and the rewards that come with it. You can also make it fun by turning savings into a game or challenge. Check out some of our favorites!

Teach the importance of delayed gratification.

Explain to your children that sometimes it’s necessary to wait before buying something they want, in order to save money and achieve their long-term goals. This can be a valuable lesson in delayed gratification and patience. Encourage them to think about their future goals and how saving money can help them achieve those goals.

Consider an allowance.

If your child is too young to get a job, they’ll need another way to build wealth and learn good financial habits. There are different schools of thought when it comes to tying allowance to chores or other (for example, academic) achievements, so decide what works best for your children, and stick to it.

Check out this timeline of what money-smart learning can look like at any age. If you do have younger kids, the Money Mammals can be a great resource, with apps, videos, printables and more.

Keep talking.

In addition to sharing real-life examples, make sure to ask your children open-ended questions, such as how they feel about money, how they think you – their parents – earn it, what they think things cost, and how they can best save.

According to a 2018 Purdue University study, by age 3, kids can grasp basic money concepts, and by age 7, many of their money habits are already set! Encourage your children to be curious and ask lots of questions, and keep the lines of conversation open.  Remember, they’re always listening!