How young is too young to talk money?
There is always the over enthusiastic parent who starts everything early. Their kids are walking first, talking first and pretty much peaking before they even start school. I am not sure if it is because by comparison I am quite lazy – but I chuckled this week when a mother emailed me to say that she was talking to her children about money and she had started early. I queried how early. She said her child was two and a half. I wondered what she could be teaching her, surely the child couldn’t understand much?
Studies show that as early as three, children can determine a difference between rich and poor. As parents, you might not want to acknowledge these differences and instead espouse how we are all the same, but kids notice. Children notice what their friends have, especially if is different from what they have, or if they perceive it to be better. They don’t necessarily think less of themselves or their friends, but they are becoming aware of difference, and at some point, they may start to draw the wrong conclusion as to why the difference exists. Does this make it the right time to discuss why there is a social economic distinction between parts of society? Should we be driving our kids through the poorer parts of town and taking the time to explain why these people who work just as hard as us struggle to step up the social economic ladder? Should we explain what distinguishes a decile ten school from a decile one? Maybe not.
But what we can be doing is talking about money in general. Money does not have to be a taboo subject or an emotional one. Money underpins a lot in life, but few people discuss it honestly. As adults, money tends to be the elephant in the room that ruins otherwise good relationships. It is sited as the most common cause of relationship break down, yet as parents we fear that if we start talking about money that we will burden our children or ruin their childhood, reaffirming that ignorance and bliss are good bedfellows. But when it comes to mastering money, ignorance will lead to financial stress later in life. Financial stress leads to dumb decisions that prevent real progress.
A lot of parents ask me how to start talking about money? The answer is simple. You just start. Financial wellbeing is as important as health and fitness, yet no one wants to talk money. We are quick to ensure our kids don’t eat too much junk food. We can be vigilant about the screen time our kids get, but we are slow to ensure they develop a good relationship with money, condemning them to repeat our own financial mistakes or end up further down the social economic ladder.
With my own kids (aged 8 and 4) we discuss all the different jobs people do and the different business ideas we could start. When my eight-year-old tells me he is not going to go to university, instead he is going to move to Australia, buy a yellow mustang and grow a moustache I ask him how he will be able to afford the ticket to Australia or the mustang? (to be honest I was more frightened by his desire to have a moustache than him wanting to move to Australia).
Some of the other conversations I’ve had with my kids:
- Mum and dad go to work to earn money, so we can do things as a family.
- We only earn a limited amount of money and we must choose where we spend it because if we spend too much, the money runs out.
- The ATM is not a magic machine that can give us an endless supply of money.
With my four year old, we play with different types of coins: silver, gold, copper, small, large. I show her notes and coins of various currency and remind her that the only coins she can eat are the chocolate ones.
No, you don’t need to start talking to your kids about money at two. But you need to weave money into your conversation like you do healthy food choices. The best foundation to give your child around money, is that money is not to be feared or revered, but it is to be mastered. Do not make this life skill taboo.
This blog is written by Hannah McQueen. McQueen is the founder of enableMe – Financial Personal Trainers. She is a Chartered Accountant, Financial Strategist, Author and Mum.