A New Way to Talk to Your Children About Money

July 24, 2015

Connect Member

Helping people to recalibrate their connection between life and money.

lifestrategiesllc.com

Does talking with your children about money merely involve you saying no to a purchase? If discussing finances with your children is not something you typically engage in, try this fun, new way to start teaching them the importance of money.

First, start small by discussing an upcoming family vacation. Begin by sitting down as a group to talk about the values and goals of taking a trip together. Ask what each individual would like to get out of the vacation. Make sure everyone gets a chance to voice their opinion. Based on this discussion, come up with a unified vision for your time using everyone’s ideas. Together, the family can see what they each want to do on the trip and participate in the planning in order to meet everyone’s goals.

After the vision for the vacation is discussed, gradually bring money into the conversation by putting together the budget. Make sure this is done together as a family. How much will each part of the trip cost? If someone’s idea initially has a high price tag, work together to decide what is important about that event. Explore whether you can possibly accomplish it in a more creative, less costly way. Additionally, make sure to leave room in your budget for unexpected expenses as that will come into play when you are actually on vacation.

When children participate and feel part of the decisions, they can understand why choices are made and how money is a tool, not the driver, of the discussion. Based on the children’s ages, they may need a little more guidance, so tailor the planning and budgeting accordingly.

The next step is to continue the conversation while traveling. Expenses will invariably come up that were not expected. When those costs happen, sit down as a family and discuss how it does or does not fit the vision you all agreed upon. Should you use the unexpected expense budget, or trade your unexpected expense for something else you have planned on the trip? Remember, there is no judging allowed, only creativity in order to come up with an agreeable solution.

Once you have tried this method of explaining finances to your children by planning a family vacation together, further the conversation by discussing values and goals for the school year and creating a budget that fits that vision. If this system continues to be successful, keep it going for subsequent years. The conversation about money and budgeting in your family is now centered around experiences, rather than dollar amounts. Through this lens, your children will start thinking before spending, while also learning how to budget and save in the process.

Joan Sharp is a member of the DailyWorth Connect program. Read more about the program here.

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