I’ve always talked openly to my children about money.

It never occurred to me to be any other way. My parents were open with me and I learned so much as a teenager, sitting in on their meetings with financial advisors, housing brokers, and bankers.

My husband’s family did not discuss finances and it shows.

It’s important that I actively teach my kids about finances.

State and federal salaries are public knowledge, so I’ve always been open with my kids about what we have, how we save, investing, and spending.

While I don’t necessarily expect them to maintain all my values explicitly, I want them to have the knowledge to make wise money decisions.

How I Teach My Kids About Money

Value

From as early as they express interest or show readiness, I teach about value.

Value isn’t just monetary worth. It’s the regard it is held to deserve; the importance, worth, or usefulness of something.

I hold certain things with very high value that others do not. It’s about priorities.

When my kids accompany me while shopping, I constantly point out value to them, why we buy this item instead of that item. I’m not brand loyal, except for a very few items that have proven quality.

It’s important the kids assist me while shopping and conversations often come up about our purchases and shopping trends.

When our toaster went belly-up, I researched a good replacement instead of just ordering one or rushing out to the store to purchase what was in stock.

We also discuss waste and limits. We eat leftovers. We prefer sustainability practices.

As my kids grow, they will develop their own priorities and set their own value to goods and services.

Quality is better than quantity.

Saving

My parents opened savings accounts for each of our children when they were born.

We encourage our children to contribute to their savings when they’re older and start working part-time jobs.

We explain the importance of having some liquid emergency savings for contingency.

We teach about investments. We teach about insurance.

We have 529s for our children for higher education. We have IRAs and mutual funds for retirement.

Pay yourself first.

Giving

Philanthropy is important.

I believe being generous should be a life goal.

While we are not wealthy by any standard, we donate often to charities with our funds and handmedowns.

We look for needs to fulfill. We don’t expect recognition or thanks.

Giving is more than just offering money. It’s a way of life, an attitude. Generosity of spirit.

“You have not lived today until you have done something for someone who can never repay you.” ― John Bunyan

Spending

Many think spending is the easy part of money management.

After monthly bills are paid, investments funded, savings bumped, what is left over?

Sometimes, it’s not much.

I have a spending plan instead of a strict budget. We shop for groceries every week and clothing and miscellaneous as needed.

As my children get older and acquire their own money from gifts or small jobs, they learn how to spend it on items they want. They also learn about sales tax.

When teens get their first part time job, they learn first-hand about taxes and other deductions.

I recently had to have a conversation with my eldest about what she termed “our money troubles.” When I was confused, she explained she didn’t want to burden us financially. I was still confused. She asked why I always said we didn’t have any money.

When I say I don’t have the money, I mean that we have prioritized saving and investing over instant gratification.

I can afford almost anything.

I have the ability to accept risk of credit and debt, but I choose not to, so to me, that means I don’t have the cash money to buy something I consider frivolous or valueless.

I choose to make different financial decisions based on what I value. And I choose not to incur further debt.

Instead of buying another car, we are choosing to share vehicles right now.

Instead of choosing to travel or vacation, we are staying close to home and occasionally go on day trips nearby.

Opportunity Cost

It’s important to learn and teach the loss of potential gain from other alternatives when one alternative is chosen.

For instance, if my son wants to buy YuGioh cards with his birthday money, he can’t buy the BeyBlades. He has to make a choice.

I make harder choices all the time.

We batten down the hatches and get very frugal if an emergency comes up, like a car repair or pet surgery. We like to pay cash and not use credit cards whenever possible.

If I choose to get takeout for dinner one busy night, we have to eat home-cooked meals and clean out the freezer and pantry the rest of the pay period. It sometimes requires creativity.

We often wait for the hit movie to go to online streaming (even if we pay $5 to rent it) instead of paying so much for 6 of us to see it in the theater.

If my daughter needs new shoes, I wait to buy myself something, even if I “need” it.

It’s really important to learn the difference between needs and wants in our consumer post-capitalism society.

We discuss propaganda, marketing, and advertising. We discuss ads on social media and games.

I’m always last. I go without so they can have abundance.

Allowance or Commission

I don’t give my kids an allowance.

No one gives me an allowance.

We all complete chores that makes our household run smoothly.

Allowances aren’t natural. Commissions for small jobs work better and teach financial lessons.

My kids often ask if there’s some special task they can complete for some spending money and I almost always oblige.

Many banks offer teen debit cards that help them to learn how banking works. My kids all had savings accounts from birth and they added checking accounts when they began working part-time.

Often, I create little jobs they can do for a few dollars so they learn the value of working for pay. If they don’t do a good job, they don’t get paid. Sometimes, they have to go back over their work to do it well.

Debt

Living as a middle class American, we grew up thinking and believing that debt is just a part of life.

We live in an instant gratification disposable society. Advertisements are everywhere, affecting our emotions by telling us we aren’t good if we don’t have the newest smartphone, car, clothes, or toys.

Debt is a risk many accept as being a normal and expected part of our society.

Debt can also be slavery and devastating during financial downturns.

I actively teach my children that debt is typically bad in most, if not all, circumstances.

I know few people who are able to pay cash for cars or houses.

But we know many people who would be bankrupt or even homeless within a month if all their debt was called in or they lost their jobs.

I don’t believe in using credit cards except in emergencies.

Credit cards are ways to help teens and young adults gain credit, but they must be monitored well and paid off each month.

I don’t believe in student loans for college.

We have one car loan and one credit card. We are paying off a consolidation loan.

I teach my kids that by using loans and credit cards, you are paying twice.

You can’t pray debt away. I don’t buy into the prosperity gospel at all.

Personal Financial Goals

Everyone develops his or her own financial goals based on priorities, past history, income, and interests.

We choose to invest for our future.

We limit our instant gratification. It’s easier sometimes since we move around so frequently and can’t justify buying things just to sell them if we can’t take them with us.

We choose to travel rather than buy frivolous gifts, usually.

I choose to buy cut flowers every week to brighten my dining room. It’s something that makes me happy and I value that.

My kids seldom ask for things when we go shopping. When they do, it’s something super practical or for all of us. They understand the difference between needs and wants. They seldom ask to eat out.

I choose to buy the best quality food and cook most things from scratch because I enjoy it and it’s healthier for us. Yes, it costs more than beans, rice, ground meat. But we seldom eat out – which does cost a whole lot for a family of 6.

An acquaintance lives in a house valued at a $half million. Then I learned they haven’t invested anything for their kids’ college or for retirement. They just spend everything.

How do you teach your kids about value?

What are your financial goals?

Resources:

• Debt-Proof Living: How to Get Out of Debt & Stay That Way by Mary Hunt
• 31 Days to Radically Reduce Your Expenses: Less Stress. More Savings by Kalyn Brooke
• Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After by Cherie Lowe
• 31 Days of Living Well and Spending Zero: Freeze Your Spending. Change Your Life. by Ruth Soukup
• Unstuffed: Decluttering Your Home, Mind, and Soul by Ruth Soukup
• Clutter Free: Quick and Easy Steps to Simplifying Your Space by Kathi Lipp
• The Spender’s Guide to Debt-Free Living: How a Spending Fast Helped Me Get from Broke to Badass in Record Time by Anna Newell Jones
• The Year without a Purchase: One Family’s Quest to Stop Shopping and Start Connecting by Scott Dannemiller
• The Year of Less: How I Stopped Shopping, Gave Away My Belongings, and Discovered Life is Worth More Than Anything You Can Buy in a Store by Cait Flanders
• Make Room for What You Love: Your Essential Guide to Organizing and Simplifying by Melissa Michaels

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