Kids notice everything, whether you think they’re paying attention or not. They repeat the bad words you say when you step on a toy and tell your embarrassing family secrets to their friends.

From a surprisingly young age, the kids in your life also notice money: who has it, who doesn’t, and how your household handles it compared to other people. They hear arguments and realize the stress. With every financial decision, you lead by example. “You are a mirror and your child is a sponge,” says Jordan Wexler, co-founder and CEO of EarlyBird, a registered investment advisory firm where parents can open college savings and custodial accounts for their children.

So, there’s no pressure, but it’s important to model positive money behavior for all the children in your life, whether you’re a parent, relative, or close family friend. It starts with discovering your own approach to money and then providing age-appropriate lessons.


It’s hard to teach someone else how to spend, save, and donate money when you haven’t set your own goals and priorities. You may want to set an annual budget for charitable giving or slowly save for future expenses to avoid credit card debt. All of these decisions relate to what you (and your spouse or partner, if you have one) really value.

Kelly Palmer, founder and wealth director of The Wealthy Parent, a registered investment advisory firm that offers financial planning to new parents, recommends that families with a mother and father demonstrate that both parents, not just the father, are the decision makers. financial decisions. “It’s important for kids to see women involved in these conversations,” she says.

Being confident in your decisions makes it much easier to explain your thoughts to a child, and you can use your choices as a way to start thoughtful conversations with your children.


Trips to the store, calculating the tip at the end of a dinner, planning summer vacations—these are all opportunities to talk about money and values. But when you’re running errands quickly, sometimes you just want to ignore your kids’ incessant questions and get on with your day.

There’s no need to have a deep conversation about money in the candy aisle while convincing an irate child that chocolate isn’t on your shopping list. But you can always return to the topic later, when things are calmer and the memory of the unbought chocolate is not so fresh.

Providing context helps children understand why you are making a specific decision: why you buy a certain brand of toothpaste even though it is more expensive (sensitive gums) or why day camp is possible this summer, but not sleepaway camp (so you can also afford a family trip during winter break that year). Inviting children to participate in the push and pull of their daily monetary decisions shows them all the factors that go into making a seemingly simple monetary decision. When they are adults, they can use those lessons in their own lives.

“One of the hardest and easiest things we tell kids is ‘we can’t afford that,'” says Mary Bell Carlson, certified financial planner, president and founder of Financial Behavior Keynote Group, a speaker, consulting firm and education that provides thought leadership on financial behavior change. “It’s a missed opportunity to have a conversation about that.”


Children notice when other people live differently. Your cousin has more toys, a friend from school lives in a bigger house, or a neighbor goes on vacation every summer. They may reject their value system when they see others getting the things they want. “When they’re released, so to speak, they’re going to be exposed to all kinds of emotions related to money,” Palmer says.

When your child asks for something you weren’t willing to pay for, don’t dismiss it, says Carlson, who has a doctorate in personal financial planning with an emphasis in financial therapy. Ask them why they want that item or experience. She talks to them about the cost. Older children might be willing to save their allowance to contribute, which provides a great lesson in how to save over time for a major purchase. The important thing is to show your children that they can come to you with a question about money and be taken seriously.

“At the end of the day, it’s not really about money. It’s about the emotional connection with your children,” says Carlson. “It’s about showing that you care no matter what you have or don’t have.”


This column was provided to The Associated Press by the personal finance website NerdWallet. Sara Rathner is a writer at NerdWallet. Email: Twitter: @SaraKRathner.


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