There’s nothing like tax season to get you ready to think about your finances.
Taking a good hard look at finances makes me think back to how little I knew what was going on with my parents finances when I was kid. I think my parents kept me from knowing anything about our financial situation because they didn’t want me to worry about it.
The truth is we weren’t always in the best shape while I was growing up. My dad was laid off from his job and he was embarking on a brand-new entrepreneurial adventure starting a construction company. We went through lean times but I was blissfully unaware of it. Tax season got me thinking about this and asking myself questions about money and my own boys Mr. B and Mr. C.
How much should I let them know?
How much should I keep secret?
How can I arm them with crucial information and experience without causing worry?
What follows are some ideas that I’ve put into practice. to answer these questions.
1. Talk About Cost
I found that my boys understand the concept of cost far better than I expected them to.
They especially understand the concept of opportunity cost, which is a benefit, profit, or value of something that must be given up to acquire or achieve something else.
We try to give our boys a reasonable number of choices throughout their day. This definitely leads to an understanding that when they choose to spend time upstairs with me building something out of cardboard, it’s at the expense of going downstairs and playing in the yard.
So highlighting this cost to them has been easy, but what about the cost of going out to eat dinner? I’ve tried a few times to talk to my boys about what I’m doing when the check comes, what it means, what the card is that I’m using to pay for everything, what it represents; but money seems like too big of a concept for them to grasp at 4 years old. This is fine for now, because although they don’t seem to grasp the idea of where money comes from, they already have an understanding of…
2. Get Them Saving
Mr. B and Mr. C were gifted with two beautiful piggy banks when they were babies and they love these piggy banks.
Any time a friend or relative gives them a little bit of money for birthday or a holiday the boys are excited and eager to put that money in their piggy banks. There have been a handful of times when I’ve been out shopping with the boys and they’ve asked me to buy them a toy.
I’ve offered that if they they could pay for the item using money from their piggy banks and each time they drop it. Mr. C’s reaction has been open disgust at the idea of spending money out of his precious piggy bank. To him it only has one use: saving.
Despite the historically low saving rate in America we do seem to be inborn with a instinct for conserving limited resources. Somewhere between this inborn instinct and a steady diet of an hour’s worth of TV ads per day the average American’s perspective changes.
I never had a class in all my years of school about the need or importance of saving money but I did learn from my parents that saving was important. I can remember at an early age my dad imparted the wisdom to always pay yourself first. I don’t do as good a job of it in my own life as he does in his, but I’d like to give my kids a good example to follow so that when they become adults, they’ll have a better chance of being savers.
3. Find Treasure
I still get a thrill when I find a penny or a nickel or a dime or a quarter on the ground. I’ve always thought there was something kind of neat about currency but not necessarily for its purchasing power.
To me, it’s fun to imagine the story behind a given piece of money. What’s it been doing all these years, how long has it been sitting on this dusty floor, how many hands it has passed through, were any of them famous hands?
Is this 1925 wheat penny I found in the dog park the very same penny that was in F. Scott Fitzgerald’s pocket while he wrote the great Gatsby? Silly questions like that capture my imagination.
When my boys and I go outside we like to hunt for treasure. I think because of my own excitement when I find a coin, the boys share this excitement. We like to talk about where the coin came from. We like to make up stories about who might’ve lost it and under what circumstances.
Did it fall out of the pocket of a delivery driver who was dodging out of the way of a runaway dump truck? Did it drop out of the cabin of a passing airplane? Is there a secret underground bank around here somewhere and the money came from the secret underground vault?
I hope that I am helping to steer my boys towards an understanding that it’s not money itself that’s important; that money is just a means to an end.
I’m also hopeful to imbue in them a sense that the accumulation of money is not a valid path to happiness, that happiness is the result of leading a well-lived life full of love, friendships, growth and amazing experiences.
I want them to know no matter how excited we get about finding a quarter under a rock in the park, we should never make it our life’s pursuit to accumulate as many quarters as possible.
In conclusion
I hope this post can serve as an encouragement to you to begin the lifelong discussion about money with your kids ASAP. It’s truly never too early to begin.
We talk to our kids about money but we balance that with a desire to prevent them from worrying or from being too focused on money. It’s likely that your children are just as curious as ours are about this most important resource.
How do you talk to your kids about money, what methods have you found to be effective to introduce money to your children? Please leave us your responses in the comments below.