As a good parent, I know you want to help your kids develop the skills they need to one day be successful on their own. So you teach them the value of hard work, of manners, of helping and respecting others, and of always doing your best.
But there’s one important skill that can be difficult to teach, and that’s handling money.
One reason is that you might not feel all that comfortable handling money yourself. You might feel like you need to strengthen your own money skills before you start teaching your kids. That’s normal, and it’s actually the entire reason I started this business.
Quick note: If you want to start improving your skills right now, click here to get a free copy of The New Family Financial Road Map, my guide through all the most important financial topics a new parent needs to consider.
Another reason that teaching money can be difficult is that it’s hard to know when your child is ready to learn and how much they’re able to handle. Especially with younger children, money can be too abstract for them to totally understand, so direct money lessons might not be all that effective.
But here’s the good news: handling money well is a lot like handling other life situations well. It requires a lot of the same skills, and you can start teaching those skills before your child is ready to understand what money really is and even before you feel confident with money yourself.
So if you want to help your kids improve their money skills but you don’t feel totally comfortable with it yet, here are 16 ways you can teach your kids about money without actually talking about money at all.
1. Say no
Most likely you have a limited income that forces you to make choices. In order to say “yes” to the things that are important to you, you have learn how to say “no” to some of the things that aren’t.
Saying “no” to an infant isn’t incredibly helpful, but as they get a little older saying “no” can teach kids that there are limits to what they can do and what they can get. As long you’re consistent with what you say “no” too, your kids will learn to accept those limits and find alternatives.
2. Say yes
In the end, personal finance is much more about saying “yes” than it is about saying “no”. It’s about defining what it is that really matters to you and creating a financial plan that helps you get there.
Find the things that you and your kids enjoy doing together and say “yes” to those things as often as possible. Make special time for them if you can. This will show them how satisfying it can be when you make happiness a priority.
3. Give them choices
Eventually, you won’t be around to say “yes” to this and “no” to that. Your kids will have to make those decisions themselves.
So instead of telling them what to do all the time, you can give them choices and let them make the final decision. Do you want to wear this shirt or that one? Would you like to go to the park or the beach? The more experience they get making choices for themselves now, the better they will be at doing it later on.
4. Let them make mistakes
When they do make their own choices, sometimes they’ll make bad ones. Maybe they chose to wear a t-shirt when they should really be wearing something warmer. Maybe they’re building their block tower too heavy on one side and you know that it’s about to topple over.
Those mistakes are okay. We all make them, and that’s especially true when it comes to money. The goal shouldn’t be to avoid mistakes, but to accept that mistakes are simply part of the deal and to get better at learning from them.
Resist the urge to rush in and prevent your child’s mistakes. Let them happen, see how he reacts, and then help him process the mistake and figure out a new way forward. That’s a skill that will make him better in all areas of life.
5. Make plans together
Long-term financial success requires good planning. You have to know where you want to go, and then you have to break that down into smaller steps that will help you get there.
You can help your kids learn that skill now by involving them in your own daily planning. It can be as simple as planning what books to read before bed. Or they can help you decide what errands need to be run and in what order you should do them. When they get a little older maybe they can help you plan a trip.
Whatever it is, involving them in the process will help them develop the skills needed to make their own plans later on.
Volunteering can have two powerful affects:
- It can show them a little bit of what life is like for people who are less fortunate, perhaps giving them a greater appreciation for what they have.
- It can show how powerful it can be to share your time and resources with others. Maybe it eventually helps them find a career that not only makes them money, but makes the world a better place.
That perspective can help them figure out how to use their money more purposefully down the line.
7. Talk about your goals
Talking about the goals you’ve set for yourself will teach your kids what it means to have goals and will help them set their own. And if you talk about your goals as you’re making decisions that affect them, like choosing an apple instead of a cookie because you want to eat healthier, your kids will start to learn how those goals give positive direction to every part of your life.
8. Talk about your accomplishments
Goals are good because they give you direction, but it’s just as helpful to talk about the things you’ve actually achieved. Celebrate the goals you’ve met, or milestones along the way, and talk about the little steps you took to get there.
Talking about your accomplishments can make the whole experience fun and rewarding, which can later make managing money feel more empowering and less anxiety-provoking.
9. Talk about your struggles
We all need to ask for help from time to time, and that’s especially true when it comes to money. There are a lot of answers out there but the first step to finding them is admitting that you’re struggling with something and seeking out some help.
Talking to your kids about the things you’re struggling with will show them that it’s okay to admit that you need some help. It will make them more comfortable with their own struggles and more likely to seek out advice. And who knows? You may even get some good advice of your own. Kids can be pretty creative when it comes to solving problems!
10. Talk about your mistakes
We talked earlier about letting your kids make mistakes. Well the corollary to that is admitting your own mistakes. You can show them that even parents mess up from time to time, and then you can tell them what you did to fix it or what you learned that will help you avoid it next time. In other words, you can model the mature way to handle mistakes and set an example for them to follow.
11. Do puzzles
A puzzle always has a big picture on the front that shows you what the finished product is supposed to look like, but it’s still up to you to figure out how all the little pieces fit together.
This is a lot like making a personal financial plan. You might have a grand vision of where you want to get to, but the real work is in figuring out the details. The key to success with both puzzles and money is keeping your eye on the big prize, but taking it one small step at a time. It’s always a bunch of small steps that add up to a big accomplishment.
12. Set up a lemonade stand
I’m a huge fan of the entrepreneurial mindset. Whether you want to start your own business or you simply want to find satisfaction and accomplishment in your job, the key is to get creative with identifying a problem and finding a way to solve it.
So give your kids the chance to be a little entrepreneurial. Let them set up a lemonade stand. Or let them identify their own interests and help them channel that into something that people will pay for. It’s not really about the money thought. It’s about getting creative and figuring out how to provide something of value to someone else.
13. Get handier
I’m one of the least handy people this world has ever seen. So if there’s ever a chance for me to swallow my own medicine, this is it.
To me, being handy isn’t really about saving money, though that’s definitely a benefit. It’s really about facing a problem and doing your best to solve it yourself instead of immediately turning to someone else. There’s no shame in asking for help when you really need it, but getting a little more handy can teach your kids some important skills:
- Facing a problem you don’t know how to solve,
- Doing some research to find a solution, and
- Putting the work in to see if you can handle it yourself
In other words, being handy is really about being adaptive to whatever life throws your way.
14. Buckle up
Just kidding. Well, it is the law, but that’s not the reason it’s here.
See, driving is a lot like investing. You could walk everywhere and be safer, but that would take a lot longer and require more effort. Just like you could use savings accounts for all your money and not have the risk of losing money in the market, but investing can make it easier to reach your financial goals sooner.
So how do you get the benefits while limiting some of the risk? With driving you do things like wear your seat belt, use your turn signals and stop for red lights. With investing you can build an emergency fund and choose an asset allocation that fits your risk tolerance. In both cases you’re able to limit the risk (though not completely eliminate it) while still getting the benefit of reaching your goals sooner.
15. Do a project together
Reaching your financial goals often takes persistent effort over a long period of time. You can help your kids learn what that’s like now by starting a project with them that will a while to finish.
Maybe you can write and illustrate a book together. Or maybe you build a small solar-powered car. I don’t know. Get creative. Learn how to do it together and enjoy the experience of making progress as much as you celebrate the finished results.
16. Engage their curiosity
Kids ask A LOT of questions. Sometimes this is a lot of fun, and sometimes you might honestly just want it to stop.
But the more you can take those questions seriously and use them as an opportunity for both of you to learn something, the more you can teach some powerful lessons:
- Questions create opportunities that didn’t exist before.
- It’s always possible to find an answer.
- It’s often the case that there are multiple answers, and the trick is figuring out which one works best for you.
- The unknown doesn’t have to be scary. It can be fun.
You’ll never be able to teach your kids everything, whether you’re talking about money or anything else. But you CAN give them the tools they need to find the answers themselves and the drive to want to find the answers.
That alone is almost all they need.