Many parents were taught not to talk about money in polite company. Money was seen as taboo – along with religion and politics. But we live in a completely transparent world today. Once kids have a smart phone, they can go online and figure out exactly how much our house, car, vacation, pair of sneakers costs. Being the people who manage the money message is the best path. Even if your kids are young, you can still have discussions regarding finances just tailored to their ages.
We tapped our Dad Community and our founder – who wrote about money in newspapers and a book before starting The Company of Dads – for advice on teaching financial literacy to kids. Here’s what they had to say:
● Be honest. Many dads said they were very transparent about how much money they made, how much their bills were, etc. Now, we understand this won’t work for toddlers, but as kids get older, it’s important to teach them how much things cost instead of thinking a Lamborghini is only a few hundred bucks. (Extra points for converting the cost of that Lambo into post-tax dollars!)
● Spend, save, and share. These three principles were huge amongst our Dads. When they discussed their children’s pool of money they earned, it had to be split into those three buckets. Give kids some agency as to how they split the money – and use it for a discussion as to what each bucket is used for. (There is a great app called BusyKid that can help keep your kids’ chores/finances organized.)
● Understand need versus want. While many dads mentioned that they let their kids use their “spend” money however they wanted, they also tried to teach them about what they needed versus what they wanted. If their child needed money to sign up for art club but wanted to buy a new video game, it was a great moment for parents to teach their kids that a lot of times it’s about prioritizing needs and wants.
● Don’t tie allowance to normal chores. An overwhelming majority of our contributors said they don’t tie an allowance to chores that need to be done to maintain a household. Do we as parents get paid extra to take out the trash or mow our lawn? What they will pay for are chores that are “above and beyond”. Volunteering to help in the yard, making dinner, watching younger siblings when you go out. (Some of the best advice on raising money-savvy kids comes from Ron Lieber, author of The Opposite of Spoiled.)
● Understand the question. Why does so-and-so have a bigger (or smaller) house than we do? It’s a common question. Kids are comparative machines. But the answer doesn’t require a disquisition on relative earning power of the parents around you. Instead it’s a chance to discuss choices and what choices we make as adults – some times we chose a bigger house because we have a bigger family, sometimes we chose to go on a vacation to Disney or buy a minivan to cart around more kids (or dogs) than our neighbors. Money, after all, is a vehicle to make choices.
Financial literacy is going to look different for everyone. The goal of our Dads is that their kids learn the value of money, a good work ethic, and the importance of sharing where we can.
For more articles like this, dad related content, podcasts, and more, sign up for our weekly newsletter, ‘The Dad’!
@welliamwallace, @AdamantArmadillo, @Kovichek, @dadcity87, @fattylimes, @tizz66, @lankeyboards, @quadraticfunk, @basically_alive, @HeathcliffOG, @Ok_Historian_1066, @beaushaw, @ProdigalSun92, @zataks, @Sloenich, @lostnumber08, @Ok_Historian_1066, @bleepblooopblopblorp, @Matchboxx, @Sea2Chi, @Behbista, @Sinsyxx, @joeyfine, @snpods, @Brutact, @FabulousBrief4569, @DoubleUJayDee, @SteveWin1234, @