Teach Kids Money Series: Start the Money Conversation Early with Tasha Danielle
This week’s guest post in our Teach Kids Money Series is from Tasha Danielle of Financial Garden. Tasha is a CPA based in Michigan. She founded Financial Garden to help spread financial literacy for all ages. In her book: Amina’s Bracelet: A Kidpreneur Story, both parents and kids can learn about entrepreneurship. Tasha stresses the importance of starting the money conversation early before someone else influences your kids.
Why is it important to teach basic financial literacy to kids?
If children don’t learn about finances in their youth, statistics show that they will make costly money mistakes in their adulthood due to lack of knowledge. Financial schemas develop for children as early as age 3. This is a very early age! Waiting to discuss finances to youth until they are in late High School can be an extreme disservice because of all the years of the child observing how money is used in society and nobody providing knowledge on how powerful this tool really is.
My grandmother and I had conversations about money when I was in pre-school. She talked to me about saving, paying her charge cards, paying her mortgage etc. My grandmother would talk to me about budgeting her money to be able fix up things around the house as well. I grew up in a low income area which led me to often have a scarcity money mindset. But my grandmother would always remind me that I could earn money and set and achieve financial goals. This is what led me to purchase my first car at 15 and be confident and strategize how I would pay off my student loan debt before incurring it. When I told my peers I would pay off my $80k of Debt Before the Age of 30, they didn’t believe it was possible. However, I had been setting and achieving financial goals since elementary school and they had not. I truly believe that I achieved this financial goals because of continuous money conversations I would have with my grandmother.
Many parents do not feel confident talking about money, let alone teach money topics. What advice/tips do you have for parents to start the money conversation?
I encourage parents to understand that what they learned from their money mistakes is exactly what qualifies them to be able to talk to their kids about money. Most of the financial gurus we know started from learning from all of their mistakes and then researching the topic to empower others. I tell parents to start the money conversation with a routine money spending activity such as groceries. Make a list of the items needed for the household and show the list to the kids and say we are spending “$200.00” today at the grocery store. Remind them of this while shopping and tell them to pay attention when items are being scanned to see if you all went “over” or “under” budget. This is showing your children to have a plan before spending money. If you are a parent who does everything online, walk your kids through this. Parents often think that teaching kids about money is telling them to save, invest etc. Telling and teaching are two different things, this is why it’s important to include your children into routine spending activities so they can truly learn concepts.
Many parents are struggling to juggle work, kids, etc. while home. How can parents incorporate teaching financial basics seamlessly into their daily lives?
Teach Kids Money Series: Start the Money Conversation Early
I would point back to including children in the routine spending activities as noted above. But, I would also consider incorporating household tasks into your children’s daily routine and compensate them at the end of the week. Most parents don’t think a child should be compensated for making their bed or doing the dishes because it is something that should be done as being a family member in the household. I would encourage parent to think of a task that they would consider compensating their children for that would ease their day to day; maybe consider having them straighten up the home office every evening. The point is to find a daily task for your child to do where they can earn money. After the child begins to earn money the conversation on having them allocating their money between saving, spending on want vs. needs will be easier to have.
Do you recommend any tools to help parents in this process?
Amina’s Bracelet: A Kidpreneur Story
We have a newsletter that provides financial tips to parents on how to talk to their kids about money at financialgarden.com.
Check out Amina’s Bracelet: A Kidpreneur Story.
Teach Kids Money Series: Start the Money Conversation Early with Tasha Danielle
