How to talk to children about money

Why is it important to talk to children about finances?

The sooner you start talking about money with your child, the sooner you will bring up a reasonable attitude to finances and your budget in him.

This will allow him to go through trial and error earlier and understand how to act in the future. He will learn how to plan spending and save, make financial decisions on his own, value his time and resources. Let his first financial goal be a toy — but he will buy it himself and understand how to move towards his goal.

Children are more vulnerable to fraudsters. Without preparation, the child does not recognize deception, because he does not yet understand the risks and trusts everyone.

It is better to discuss with the child in advance what methods of fraud he may encounter and how to act in such situations. For example, hackers have hacked a friend's page on a social network and will be asked to transfer money on his behalf. Or an SMS message came that allegedly by mistake they made a transfer to the wrong phone number and asked to return this amount. It is necessary to explain to the child that such messages should be checked: check with a friend on the phone or at a meeting whether he is really asking for money, look at the phone balance — whether there was actually a transfer. And it is better to call for help from parents.

If a child learns from childhood to act carefully and cautiously in financial matters, this will save him from major losses in the future.
Rule No. 1. We explain in a playful way

It is best to introduce children to money through games and experiments.

With kids, you can start with a simple:

  1.  What does money look like? Offer your child a game: imagine that you have found a treasure. How do you know if it's real money or toy money? You can use real bills and "money" from "Monopoly". Conduct an investigation: how to distinguish a genuine bill. Tell your child about the signs of authenticity of banknotes, show pictures of watermarks, how letters and numbers shimmer and where other protective signs are hidden. You can gather friends and hold a contest: who will find more animals and plants on the bill with a magnifying glass.
  2.  Where does the money come from? Explain to the child that money does not grow on trees and is not "taken from a box" (ATM), as many kids believe. Tell us what professions there are and why they are paid differently. The child should understand that money does not appear by itself on demand. You can arrange a game, for example, in a profession. Children can choose a role for themselves: a hairdresser, a doctor, a baker. Give everyone a set of toy money so that they can turn to each other for services and pay for them.
  3.  What can money buy? Start with the elementary: in exchange for money, we get products and vital services. For example, if you don't buy milk, there will be nothing to eat muesli with in the morning, and if you don't pay for electricity, the house will be dark and cold. Play the store: put a price on different products. Someone will be a seller, someone will be a buyer. The main thing is to convey to the child that things do not get just like that, you need to pay for them first.

More difficult games are suitable for younger students:

The sorting game. Invite your child to gather "for a ball", "on a hike" or just for a picnic. Determine how much money you would be willing to spend on it. Make a list of things that you might need, specify their price. For example, several ball gowns, shoes and accessories of different prices. The child will need to collect a complete set of necessary things and at the same time meet the established budget.

Discuss with the child what he will take with him? What things are necessary for him, and which are secondary? Ponder with him how to distinguish what you want from what you need and not spend too much. Is it worth spending all the money on a dress and going to the ball barefoot? Or go to the forest for a week only with sweets and lemonade?

During the game, you can choose products for a real family picnic. Then the child will understand that his decision is not a game.

Quest in the store. Children love it when they buy something. But they should understand that resources are limited. When you go to the store with your child, invite him to become your "counter" and let him know when the amount of the collected products reaches what you said. Compare what costs how much.

Rule No. 2. We encourage children's savings

Desires are usually more than money. Help the child transform his "wishlist" into a specific financial goal. He must learn to make a choice — to give up excess in favor of something more important and valuable. For example, not to spend money on chocolates every day, but at the end of the month to buy yourself a new toy.

A piggy bank will help teach children to save for a dream. It can be an ordinary transparent jar (it is convenient to watch how the pile of coins and bills grows), and a beautiful piggy bank with cars or princesses, and a traditional piggy bank. Special mobile applications are suitable for teenagers.

Rule No. 3. We trust children to buy

When a child has saved up, for example, for a toy, give him the opportunity to pay for it himself. He will be proud of having achieved the goal on his own, and he will remember this feeling for the rest of his life.
Already from school age, children can be trusted with shopping in the store according to the list from their parents. Teach them to be reasonable and attentive, compare prices and save — but not at the expense of quality. First, it should be done in the presence of mom or dad, and then independently.

Play the "picky buyer": study the offers of different stores with your child, compare the ripeness of fruits, the freshness of vegetables, the weight of yoghurts and the composition of cakes. Show that similar things can cost differently, and teach you how to choose good products at the best price.

Rule No. 4. We teach budget management in everyday life

Both adults and children need to learn how to really assess their resources and manage what they have. Should I spend all my pocket money at once or stretch it out for a week? Put it aside for a dream or treat the whole class to ice cream?

Explain to the child that the amounts that you give him or his grandmother gives him for his birthday are completely his. This means that it is up to him to decide how to dispose of them more effectively.

It is better to give the child money immediately for a certain period, for example, for a week. Daily sponsorship will lead to the fact that spending will be more momentary. A certain amount of rubles for a week is a step towards long-term planning. Gradually expand the child's area of responsibility — from buying food on the list to self-planning and purchasing school supplies, from choosing a birthday gift for a friend for the right amount to managing your pocket budget for all holidays.

  •  First-graders can be explained what rent, family budget, discounts, sales, loans are.
  •  Children from the age of 10 can act as "financial advisors" to their family. Teach them careful consumption and ask them to calculate how much money the family loses when the faucet is not turned off and the lights are not turned off.
  •  By their example, parents can tell how they manage the family budget. How do you distribute your salary? How much money is spent on mandatory payments? How much do you save for your vacation? How much do you spend on toys and entertainment?

Rule No. 5. We remind the child about good deeds

In order not to raise a miser, always remind the child that money itself has no price. They mean exactly what you can buy with them. Explain that you can use finance not only for yourself, but also for someone else who needs help.

For example, you can transfer some amount to charity. The child will be pleased to realize that he helped someone. Cultivate in him a positive attitude to the idea of sharing with someone. Remind me that good deeds should be done selflessly.

Rule No. 6. We respect the child's right to make mistakes

Your child is a different person, and his view of things may differ from yours. Be always ready for an open dialogue, especially in matters of finance. Do not immediately rush to criticize his actions. First find out his opinion, and then share yours.

Let him play with useless spending in childhood, but in the future it will help him avoid larger financial problems.

Rule No. 7. We exclude negative attitudes

It is not necessary to fill a child's head with phrases like "wealth is bad", "you will not get stone chambers from the labors of the righteous." The attitudes laid down in childhood can prevent a child from becoming prosperous in adulthood. Or even worse: by instilling in children that rich people are grabbers and hucksters, you can cause the opposite effect. For example, a child will think that cheating and fraud is the easiest and fastest way to financial success.

Carefully comment on other people's achievements. Don't condemn them, but don't praise them too much either. The child should not get the impression that only people with some special abilities can reach heights. Emphasize that your son or daughter can also become successful and wealthy if they study well and find their favorite business.

And in no case do not shift your adult problems to the children — do not complain to the child about the mortgage and a small salary. This can cause financial anxiety in the child. And in the future, he may, for example, agree to an unloved job only out of fear of being left without money. Create a sense of security and confidence in the future for him.

Rule No. 8. We answer inconvenient questions

"Dad, how much do you earn?" Your income is confidential information. And children are quite talkative. It is unlikely that you would like the whole school to discuss your salary tomorrow. Explain that the amount of earnings may differ from month to month, tell us what it consists of. You can limit yourself to the phrase: "Enough for our family." If your child has not yet grown up to the joint planning of a common family budget, it is better not to give exact figures — it will still be difficult for him to assess whether it is a lot or a little.

"Why does Jason have an expensive smartphone, and I have a regular push-button one?" The most important thing is not to start criticizing Jason and his parents just because they give him more expensive gifts. And even more so, do not run to buy an expensive phone for your child on credit so that he is not ashamed in front of his classmates. By doing this, you show him a bad example of budget management.

Maybe it's really time to change the push-button phone to a modern smartphone. But it is not necessary to spend a lot of money on it. Explain to your teen that it is worth paying attention to the characteristics that are really needed, and not to the brand. Choose with him a decent phone at an affordable price. So he will learn to make an informed choice, and not be led by advertising tricks. Yes, and you will not worry that he will lose or have his smartphone stolen at the price of a used spaceship.

If your child has begun comparing your family's wealth with others, don't get defensive or switch to blaming others. Explain that all people, their skills and what is currently in demand in the labor market can be very different, different professions are paid differently and each family has its own values. Such a question can be an excellent opportunity to discuss with the child who he would like to become in the future and how he sees his adult life.

"How did it happen that Aunt Mila lost all her savings?" This is a good opportunity to talk about financial scammers and explain the basic rules of financial security:
  •  Do not write down the PIN code on the card and do not tell it to anyone.
  •  Never let the card out of sight when you pay it somewhere. So, for example, in a cafe, the waiter must bring a portable POS terminal or invite you to pay at the checkout.
  •  Immediately inform the bank and parents if the card is lost. And also if you received an SMS message about buying or withdrawing money from an ATM, but you didn't do it.
  •  Do not use open Wi-Fi points (Internet in public places: transport, cafes, cinemas) when you go to the Internet bank or mobile bank.
  •  Do not shop on the Internet at questionable sites (for example, you should be alerted by the low price of the latest model of sneakers in an online store).
  •  Do not respond to alarm calls, SMS, letters or messages on social networks that your relative or friend needs money. Instead, you should immediately call your parents or relatives, warn that such messages are being sent on their behalf - perhaps their account or mail has been hacked.
  •  Do not click on links in emails about winning a phone, tablet, laptop, etc. Free cheese only happens in a mousetrap. Most likely, you will only get a virus from the link.
  •  Do not post photos of new purchases, the situation in your apartment, plane or train tickets with dates of departure and arrival on social networks. Do not write posts about how soon you will leave for the holidays and no one will be at home. So your house can be of interest to burglars while you are away.

Money is a very important part of life, and it is a parent's duty to prepare children to handle it properly. And at the same time, it is worth explaining that happiness, indeed, is not in the millions.