…and why YOU should too!
Every other week, my husband and I hold a family meeting to discuss our finances. My husband, myself, our daughter and son all pull up a chair to the dining room table and talk about money. We look at what income we have and what expenses are looming. We discuss things that we NEED to buy and things that we would like to buy. We talk about who needs to purchase a gift for a friend and how much we have saved in our vacation budget. Did I mention that my children are elementary school-age?
Talking about finances as a married couple is one thing that has greatly strengthened my marriage. Early on, my husband and I didn’t talk about money and we ended up in a bit of a “financial pickle” as a result. Now that we regularly discuss money, marriage is so much easier. I also feel like it’s important to model regular, healthy financial discussions to our kids so that, one day if they have spouses and partners of their own, they’ll feel that talking about money is just what you do.
When our daughter, Anna (now 10 years old) was turning one, my husband and I read Dave Ramsey’s book, “Total Money Makeover” and it changed our lives. For the first time in our marriage, the word, “budget” was used with regularity in our home. As a result, one of Anna’s first words was, “budget.” I have vivid memories of her scooting around on her hands and knees muttering, “budget, budget, budget,” through drool and bubbles. So, to say that we started talking about money with our kids at an early age is a gross understatement. By recently involving our kids more fully in our money discussions, we’ve found that they’ve both embraced our budget and are willing to help out around the house more. They don’t beg to go shopping as much and are looking forward to the vacation that we’re working hard to save up for.
You might be wondering if it’s prudent to burden small children with talk of finances–sometimes I wonder this myself. Ultimately, we want to raise kids who understand the value of a dollar and understand the hard work that it takes to get what you want. Involving our children in our budget talks is one way that we hope to instill in them an understanding of money and how to manage it–well before they’re 16 years old with their first fast food paycheck burning a hole in their polyester uniform pocket.
Understand this though: We don’t let our kids in on every aspect of our finances, essentially because they don’t need to know about everything. If we had a bunch of debt and were living paycheck-to-paycheck, I wouldn’t want them to stress about our finances. We don’t talk in terms of net worth, salaries or mortgages with our kids. My husband and I discuss that part alone but then invite the kids in on the discussions that pertain to them–such as saving for a vacation or budgeting for a special treat. And, we’ve discussed that there’s a bit of decorum involved in talking finances with people outside of our family. We encourage talking about money in our home but obviously, we don’t want our kids going to school, discussing how much my husband makes after taxes on the playground during the kickball game.
So, here are 5 reasons why we discuss our finances with our young kids and why you should consider doing it too:
1. We want them to have a concrete understanding of what we have and what we spend. We feel as though it’s important for them to understand where our money comes from and where it goes. When they know how much our monthly grocery bill is, they’re much more willing to eat leftovers and split a can of soda, rather than drink half then let it go flat and abandoned on the coffee table later.
2. We want our children to feel the success (and sometimes failure) of saving up for something big. We’re currently saving to go on a Disney Cruise. Recently, we’ve also been given an opportunity to take a weekend road trip this spring. Our son, Jack (age 8) is vehemently against the fun, family road trip because he knows that the money to pay for the road trip will come out of the Disney Cruise savings and he doesn’t like the idea of losing ground on our vacation savings–no matter how fun a family road trip might be.
3. We want our children to appreciate how hard we work. Before we started these family meetings, our kids thought that our bank account magically regenerated funds every month. They didn’t understand the correlation between the work that my husband and I do and the money in the bank. Now that they understand how the money gets in the bank, they have a new appreciation for the work that we do.
4. We want our childrens’ input on how we should spend our money. We give them options at every meeting like, “Do we want to have a nice dinner out this week?” or “Should we eat at home but go on a fun outing over the weekend?” With them helping us to make financial (however small) decisions for our family, they have a vested interest in our financial situation.
5. We want our children to understand why we sometimes have to say “no” or make hard choices. We certainly don’t want our children to ever feel burdened by our financial status, but we do want them to know that (contrary to popular opinion) we’re not always saying “no” just to be mean.
Recently, I asked my daughter how she feels about being included in our financial discussions. She surprised me by enthusiastically telling me how much she values it. She said that she likes having an input into how we choose to spend our money and she appreciates what it takes to buy the things that she needs. She also said that she enjoys eating at restaurants now that we’re more judicious (my word, not hers) about when and where we eat–since it’s a treat, as opposed to an obligation these days.
It can be said that people treat children too much like children at times and don’t give them enough credit for being able to comprehend “adult” matters, such as money. As parents, we never want to frighten our kids about money or make them feel financially unsupported or insecure, but a little reality never hurt either.
The best thing you can do right now–if you don’t already–is to start budgeting (Dave Ramsey’s book can help with that) and get things under control. After you have a good handle on your budget, then consider letting your kids in on the discussions. The earlier that you begin modeling responsible budgeting for your kids, the more ingrained it will be in their lifestyle–setting them up for financial success on their own.
Do you discuss your finances with your children? Tell us more….