What Every Parent Should Tell Their Kids about Financial Literacy

Financial Literacy for Kids

Many people have an aversion to discussing money in any form or fashion in front of their children.  Their concerns might stem from a sense of pride or they just don’t want to open a Pandora’s box of questions.  It could be a multitude of reasons.

Sometimes an individual’s pride can be a primary motivator for them to not be completely honest with their kids. I can certainly sympathize with that feeling because I have been there myself.

All too often it is very easy to want to take the path of least resistance and avoid having this conversation with your children.  It can feel awkward because it might reveal to your kids more about you and how you run your life than you are comfortable revealing.   

In a sense, you’re pulling back the curtain on how you run your ship.

But sometimes some circumstances or topics that need to be discussed if for no other reason than to provide your kids with a better understanding of how the world works.  In today’s world, it is so important to show them how they can adapt and learn as they grow up.

I believe if you were to ask a group of kids the vast majority of them would have no clue how much money their parents kept in a checking account. They would not even know how to begin to describe what their family spent on the power bill, cell phone bill, or on groceries.

While I certainly don’t think it is important to discuss a families expenses down to the details, I do think it’s very important that they realize at a young age that a checking account is not a bottomless source of money.

Kids in many regards kids crave structure.  I believe they work best when routines and consistency guide their life. Some kids do bristle at the very mention of the word “rules.” But the rules I am referring to are not the ones we use to make our kids brush their teeth or pick up their clothes.

I’m talking about the rules that help guide every working family out there. Basically, on a day to day basis, there is a certain amount of money coming in the door and there is a certain amount of money going out the door.

The money coming in the door is like a water hose, it can be slowed down or cut off altogether. 

I’m sure that seems like a very direct way to discuss how a family’s finances work with a child, and I would agree with that. However, my intention with you is to put the topic before you in a very direct and simple terms.

Only you as a parent or a loved one can determine what is the best way to have a meaningful conversation with your children.   

But the important part is…… have that conversation.

Being a parent to a child of any age has a responsibility to also be a teacher. Some people choose to lead by example, however in this circumstance that’s difficult to show. I find it is better to treat your child with a certain degree of respect and have a meaningful conversation with them.   In the hope that you can provide them with valuable information that will benefit themselves as well as the family as a whole.

To put it bluntly, I am trying to encourage you to talk with your children about how your finances work because it can help your child as well as yourself appreciate what it takes to really run a family!