iVillage: How to Talk About Money

How to Talk About Money: Tips for Parents

Talking to your child about money can be difficult. Teaching them about money is even harder. As a parent, figuring out how to talk to kids about money can be a challenge. It’s important to teach your child basic money skills, but helping your child become a financially independent adult is about more than just budgeting. You also need to teach your child how to set goals, make good financial decisions, and feel confident managing their own money.

How to Talk to About Money Video Transcript:

Open communication about personal finances can be a great way to teach your teen about money. However, some topics are for parents only. Specifics about your income, for instance, are probably best kept to yourself. But if times are tough, your teen is likely to pick up on it. In that case, honesty and optimism can help ease the situation.

One area that can be very helpful in teaching your teen to have a healthy relationship with money is explaining your financial decisions. If you choose to cook dinner at home rather than go out to eat so that your family can take a vacation once a year, explain that to your teen. They’ll benefit from understanding that smart money management requires decision making. And they’ll also gain insight into what you value, as a parent.

Why not continue the conversation about money by channeling your inner arts and crafts teacher? Get a stack of old magazines, a few pieces of poster board, some scissors, some glue and create a savings vision board with your teenager. Cut out photos of things that make you happy, and ask your teen to do the same. This is a great way to continue the conversation about what matters most to you as a parent, and to learn a little bit more about what matters most to your teen.

Use the savings vision board as a way to create financial goals. Assign dollar amounts to things that make them happy, and come up with a plan on how they could reach those goals.  Assigning a dollar amount and creating a plan is a great way for your teen to see that money is just a means to an end. And they can be in control of affording what will make them happy.

Teens are inundated with media messages that tell them they have to buy certain things to be cool. The next time you’re watching television with your teen and a commercial comes on that implies that a specific type of car will result in a specific type of happiness, talk to your teen about it. Ask them what they think, and really listen. Offer pearls of wisdom where you can. It may not seem like they’re listening, but I promise, they are.

Between peer pressure and media influence, it can be hard for a teen to know what makes them special. Make an effort to recognize your teenager for their strengths. Whether it’s playing soccer, doing math or making people laugh. While they might roll their eyes at you when you compliment them, the fact of the matter is, hearing that your parent loves you and that they think you’re great never gets old. It’s worth way more than money.

Perhaps the best way to make sure your teen develops a healthy relationship with money is to let them practice. Just like with sports or musical instruments, practicing really builds confidence. The more comfortable your teen can become with managing their money now, the less anxiety they’re likely to feel about their personal finances as an adult.

Failure is okay. It’s a natural part of learning about money. The most important thing is letting them practice.

The best way to help your teen develop a healthy relationship with money is to talk about it.

From iVillage.com‘s “The Money Talk”