Do you talk to your kids about money?

A reported 73% of Millennials say they grew up in families that talked about money.¹

Now, this could be anything from unsolicited advice from that estranged great aunt, to meaningful advice from a different trusted family member, but regardless, they were talking about money.

As much as we all enjoy being told how to raise our children, there may be some good results from these types of conversations. For one, there are clear indicators that Financial Education directly impacts behaviors and among a general understanding of personal finance, improves debt and credit outcomes.²

Financial Education is one of the most difficult topics to write or talk about due to the general sensitivity when it comes to talking about money – maybe some stress, anxiety as well – Am I doing enough? Do I have enough?

In reality, everybody treats money differently. Nobody has the exact same goals or needs, nor should we.

But the one theme that remains the same is that starting early can make a huge impact on financial competence down the road. Teaching kids about money not only equips them with essential life skills but also instills valuable habits that can lead to financial success later in life.

So, let’s dive deeper into the significance of early financial education and uncover some of the actionable ways to kickstart these conversations with your kiddos:

Building a Strong Foundation:

Let’s start with a personal story.

As was the case with most seven-year-olds, I was interested in 3 things: Flashy explosions from starfighters, building anything with interlocking plastic bricks, and video games.

Let’s be honest, aren’t we all still there (at least a little bit) in our hearts?

During the “formative” years of my life, my parents gifted us a grand allowance of 10 WHOLE DOLLARS!! (Woohoo!) each month to spend on whatever we wanted, well, almost whatever we wanted:

• $2.50 went towards parent tax.
• $1 went to donations.
• $1.50 went to the snack bin.

I am sure that this was an easy way for my parents to just give us $5 instead of $10. But it was actually intentional.

At the end of the day, I was left with $5 per month to spend on anything else. After months of scrapping and saving, I had finally accumulated enough to purchase a coveted game that combined all of my interests.

For those of you who know what I am talking about – I applaud you and we should hang out more often.

I didn’t realize it, but my parents had introduced “real adult finances” and given me a basis for some of the financial concepts that seem so second nature to me now – the difference between needs and wants, saving, budgeting, TAXES, and the importance of setting financial goals.

You can do the same for yours.

Encouraging Open Communication:

This is a big one. Money has traditionally been one of those topics that is off-limits at family gatherings, along with politics and religion. See, only 57% of Gen X and 55% Gen Z reported talking about money growing up³… Why is that?

Yes, everybody treats money differently, but creating an environment where children feel comfortable discussing money matters is essential.

• Encourage open dialogue about financial topics.
• Answer their questions honestly.
• Use everyday opportunities like paying bills, grocery shopping, or stopping at the gas pump to teach valuable money lessons.

I know, I know, this is much easier said that done. But…

You don’t have to go into the economics of inflation and why everything is so expensive to give them an idea of how money should be treated.

Start small like counting change, or going to the bank and don’t gloss over things like the cost of education, the new car, the new house – These are areas that can cause a lot of financial strain down the road, especially with little to no experience. If you have that concept already instilled, it makes it much easier to work through.

Leading by Example:

Behavior is not taught, it’s learned. Children observe their parents' behavior.

"Setting an example is not the main means of influencing others; it is the only means." – Albert Einstein

Setting a positive example by demonstrating good money habits like budgeting, saving for future goals, or avoiding unnecessary debt, can make a profound influence on shaping their financial mindset.

• Try setting financial goals together – Maybe involve children in setting financial goals like saving for a toy (like me), a family vacation, or a long-term investment.

This not only teaches the importance of goal setting but also provides a sense of accomplishment when they achieve these milestones.

This is one of those where you are really going to have to use your resources. There are plenty of tools designed to teach kids about money in a fun and engaging way:

• Learning to Count Money – The children’s museum where I grew up had an incredible area where children were given a “budget” could “purchase” “groceries.” You would get your money out of the “ATM” and go pick your produce (dowsed in sanitizing chemicals, because there were like 1,000 kids carrying these around all day), milk, and bread, toss them in your little grocery cart, and even check out in line. Great time!

• Financial Literacy Workshops – Enroll your children in financial literacy workshops or programs tailored to their age group. Many organizations and schools offer after-school programs where kids can learn about money management, budgeting, investing, and entrepreneurship through interactive activities and discussions with experts.

• Countless Books – (Reach out to me if you would like these recommendations). Books are great resources, especially for younger children who don’t quite grasp these concepts fully.

Any of these resources can complement your efforts and make learning about finances more enjoyable for children.

Teaching Delayed Gratification:

Boy, this is probably the most difficult one nowadays. With everything at arm’s reach, you can order almost anything and have it delivered within days, you can purchase groceries to be delivered within hours, and fast-food within minutes…

Money is different.

Financial success doesn’t happen overnight. It is important to understand that. Encouraging kids to save for their desired items rather than getting them immediately can reduce a reliance on debt or impulse spending. This is a good money habit, yes, bit it also fosters patience, discipline, and a deeper appreciate for the value of money.

Instant gratification is hard to overcome but think about it like planting seeds. A farmer will wait patiently after planting his crops, caring for them, allowing for them to grow and produce more. Harvesting too early, “impulsively,” may produce immediate satisfaction, but the long-term benefits are forfeited. Encouraging patience nurtures their financial resilience and instills the value of understanding money.

So, what does this all do? What’s the point?

The importance of early financial education cannot be overstated. It serves as the cornerstone for a lifetime of financial well-being and success. And these are just a few examples. There are plenty of other ways to teach your children about money. But, by laying a strong foundation in financial literacy, fostering open communication about money topics, leading by example, and actively engaging children in the learning process, parents can empower their children to make informed financial decisions.

You play a pivotal role in shaping children’s attitudes and behaviors towards money. There is always an opportunity for you to learn more, so take advantage of your resources and pass them along to your little ones.

All the Best,

Gil Brandon IV, AAMS™

1 https://www.forbes.com/advisor/banking/talking-about-money-by-generation/
2 https://finrafoundation.org/sites/finrafoundation/files/Why-Is-Measured-Financial-Literacy-Declining.pdf
3 https://www.forbes.com/advisor/banking/talking-about-money-by-generation/