Family Discussions about Money: Tips on fostering open and honest communication about finances with your children.
This topic is near and dear to my heart for a couple reasons. First, I selfishly think about this a lot in the context of my own family (which is growing with the arrival of a baby girl in July – my two-year-old, Timothy, cannot wait!). How am I going to talk about money with my children? How did my parents talk about money with me? Second, I see this play out amongst my clients and their families constantly. Some families do it very well, and others haven’t quite figured it out yet.
Talking to your family about money can feel awkward, even with the people closest to you. But guess what? Having open and honest conversations about finances with your kids and grandkids is just as important as everything else you do as a parent or grandparent. Sharing your experiences with money (both the good and bad ones) may help someone else learn and succeed in the future.
So, how do you get the family conversation rolling without feeling like you’re giving a lecture? Here are some tips:
Start Simple, Keep it Age-Appropriate
You wouldn’t explain fractions to a kindergartener, right? The same goes for finance. Tailor your conversation to your child’s age and understanding. For younger kids, focus on basic concepts like needs vs. wants, and as kids age, introduce the concepts of saving vs. spending and budgeting.
Be Honest and Open
Answer their questions honestly, even if the situation isn’t picture-perfect. Explain challenges your family might face financially, but also share your goals and strategies for overcoming them. This transparency builds trust and shows them responsible problem-solving.
Encourage Family Input
Don’t just talk at them, talk with them. Ask them what they think about different financial decisions, even if their ideas aren’t perfect. This fosters their sense of responsibility and ownership.
Celebrate Milestones
Acknowledge and celebrate their achievements, big or small. Did they save up for that new book? Great! Did they stick to their budget for a week? Awesome! Recognizing their efforts reinforces positive financial behaviors.
Remember, these conversations don’t have to be one-time events. Make them an ongoing part of your family life and involve trusted advisors like us when it makes sense. By creating a safe space for open communication, you’re empowering your kids to grow into financially responsible adults.
