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How to Talk About Money Without Putting Stress on Your Kids

Money is something every child needs to learn about as they grow up. To become savvy and money-conscious adults, they need to practice thinking about money through childhood. Kids who receive smart money tips from an early age are more likely to earn and save expertly as adults. This is why children often ask about money, your job, and what it takes to buy things. A tight budget only spotlights that the family has money concerns to talk about. But how do you explain making ends meet to your children without worrying them? Your kids don't need to feel financial stress to understand your budget and even become cheerful partners in smart living. So it’s important to know how to talk about money the right way.

It's common to partner with your children and share the inner workings of family life. You may rely on your oldest child to strategize and talk things out at home, as they rely on you for perspective and guidance. Alternatively, when your children don't understand why a specific wish isn't in the budget, it's important to have a strategy for those conversations. In fact, knowing how to talk about money can inspire your children to value earning and saving.

How to Talk About Money Tip #1: Money as a Math Problem

The best way to explain money to your kids is with math. Approach the money conversation like you would talk about a board game. You can't spend any more tokens than you earn, and you earn a set number of tokens every month. Every "turn" you spend a set number of tokens on bills and a nearly-set number on groceries. All expenses after that come from the tokens you have left - and you should set a few tokens aside for a rainy day.

Kids can understand board game math easily. This takes money from a "magical thing adults use to get stuff" to a set number of "tokens" your kids can count. When they're trading tokens for snacks and toys, kids quickly grasp the value of money on a practical level.

How to Talk About Money Tip #2: Take Survival and Safety Out of the Conversation

You, as the parent, may occasionally worry about rent and grocery money. But your kids shouldn't have survival on their minds if possible. You know that you'll always be there to keep them safe and fed, so only talk about these expenses as part of your "every turn" necessary costs. Emphasize that kids don't need to worry about survival, especially if they’re young.

Take it from experience; talking about survival and safety only causes worry. So instead, just keep the money conversation on the token-counting level. Older kids may grasp that homes or apartments cost $X amount and that making ends meet is tight. But by then, they'll be ready for more grownup conversations about the natural system of jobs and the cost of living.

How to Talk About Money Tip #3: Spending What You Earn

An important part of the conversation is helping kids to understand that you can only spend what you earn. This goes two ways. First, teach your kids as a hard-line that you can't spend more money than you make. They either have pocket money, or they don't. There is either fuel in the tank, or there isn't. This creates a desire to earn and creates a solid foundation for saving and avoiding debt.

Second, encourage your kids to earn. The older your children, the more they can take on the idea that you decide how to spend your income — and that it goes to family priorities first. But if your kids earn through chores, babysitting, or jobs as teenagers, then they can control what they spend on. Ambitious children and teens who strongly want to spend will make the decision to earn what they need for toys, adventures, and soda.

How to Talk About Money Tip #4: Proudly Assign Budgeting Tasks

Get your kids involved in budgeting. Give them a few items to find at the grocery store or an entire list and challenge them to find the lowest price. Reward your kids for smart shopping by spending what they save on treats. If it's a few dollars, grab a candy bar at checkout. If it's more, let your child pick a toy in that price range.

Older children eagerly take on budgeting responsibility, especially if allowed to plan events. Let your 10-year-old plan their own birthday party, deciding whether to prioritize decorations, games, or extra cupcakes with the budget. Let your 14-year-old plan and shop for a camping trip, choosing what you will eat by the campfire and any new supplies you might need. Savings are their own reward in extra s'mores supplies.

Kids who get involved in budgeting tasks as a family game will become your partners in savings. They will help you continue to shop smart at the grocery store or plan frugal events. The stronger your partnership is, the more they'll want to help you make ends meet the fun way.

How to Talk About Money Tip #5: Show Your Children Trust and Give Them Responsibility

Talk to your children with trust, and bestow them some responsibility. Children can tell when you're stressed, and many are attentive enough to know it's about money. This can cause stress by not talking about it and leaving them to wonder. If your children ask about money, find a way to be honest instead of glossing over your worries. Give them some perspective and assurance that everything, while tight, is still safe and happy.

Younger children may understand if you explain spending as game tokens and that your tokens are mostly used up each turn. Older kids benefit from knowing if they should be worried about survival. Kids who have already picked up a sense that money is survival-tight may benefit from seeing the whole budget laid out like a math problem, so they know that ends are meeting even if it's close.

Teens may want to step up as household adults, or they may benefit from a simple 'earn your pocket money' talk so that they know where the allowance issue really stands.

Tell your children as much as they need to know to be calm and confident about family stability. To those who want to get involved, give them responsibilities that reduce your stress — because that's what they want most. Let them help you shop frugally or do a few extra chores that will help you relax.

How to Talk About Money Bonus Tip: Find Ways to Relieve Your Stress

Finally, make an effort to lower your stress about finances and everything else. Kids can be sensitive to stress, and they'll worry about you as their parent even if they don't understand money yet. Take a 30-minute soak in the tub once a week and let your whole body and mind relax. Find a friend or relative to confide in about grownup concerns so that this stress doesn't accidentally bubble out with the kids.

Little changes like rocking out with your morning shower can help to let go of that long-term stress, bit by bit. When you're feeling good, take another run at reducing costs, remediating debts, and planning for the future with a positive outlook. You will likely notice that your kids are also less stressed and money-concerned when you take a little time to manage your own stress on a regular basis.

Living on a tight budget doesn't have to mean keeping it from your kids. Often, children are eager to adapt to a budget-based lifestyle, so long as you make it a family game. Use careful honesty and involve your children as trusted partners in making your family work at any income level. Kids can help you save, adapt to earning treats with hard work, and learn essential financial skills that will help them for the rest of their lives.

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