Money Doesn’t Grow on Trees: talking to kids about money

By Karen Deerwester, Ed.S.

Babies don’t arrive by storks and money doesn’t grow on trees. Sometimes it seems easier to avoid certain discussions than to try to teach children the facts, the values, and the skills that accompany complex adult topics. Money is a “complex topic”, not because it requires such sophisticated mathematical skills, but because it requires an awareness of emotionally and culturally loaded assumptions.

Just like talking with children about sex requires parents to face their own fears and inhibitions, so does talking money. Whether you hold money too tightly or too loosely, whether or not you think money buys happiness, it’s best to start by teaching the “facts of money”. Then, clarify the value messages you want your child to know. With clarity and focus, you can now proceed to teach your child the skills she needs to be a fully functioning participant in the world where money is significant currency.

Your child is learning that money stands for a value in the same way that he learns that words have value when learning to read. In reading, your child learns that letters makes words and words represent objects in the real world. With money, your child learns that everything has a price and buyers decide if they want to pay the price. Your child sees day-to-day examples of money-in-action. The following list may seem obvious to adults but remember young children need to understand the basics before they learn to compound interest and invest in stocks.

  • You pay for goods and services in stores, restaurants, and when others help in your home.
  • You make choices between wants and needs.
  • Size and quantity may be relative to value. However, one large item might have more value than two smaller items or a very small item might have more value than a very large item.
  • Mommies and daddies get paid for working. Different jobs have different financial values.
  • Credit cards are not free money. ATM’s and computers are connected to banks.
  • The amount of money you have to spend is always less than the infinite choices of how to spend it.

As parents, you want to model money handling the same way you model other kinds of problem solving. Talk about money transactions from paying store clerks to making deposits. Without invoking fear or miserliness, give your child the opportunity to appreciate financial connections. Children today are cognitively impaired without adult explanations in a world where food magically appears out of drive-through windows and money is spit out of little boxes whenever you need it.

Here are a few value-concepts to discuss with your fiscally aware child: earn versus free, share versus hoard, borrow versus give, immediate gratification versus delayed gratification, scarcity versus abundance. The best way to teach your child is to create the opportunities that lead your child in the direction of your values. This means:

  • Be an appropriate role model – being thoughtful and responsible about money
  • Create “teachable moments” – saying “no” when “yes” is easier
  • Give your child responsibility over age-appropriate money decisions – shopping at the dollar store, saving for a special purchase, or “working” to help others

Make “money” a fun game for your child – a game of strategy and problem solving. Guess the price? Is it worth it? Just be sure the game is teaching the lessons you want to teach.

Money transactions involve both mathematical and emotional skills. As parents, be prepared to teach self control as often as you are teaching good financial decision making. Generally speaking, find ways for your children to practice handling money, theirs and yours. Let them earn money over and above their usual contribution to the family or give your child a weekly allowance. Do not make all family chores money based; some should be expected simply as family members.

  • Play “money” games like Monopoly™
  • Count change and read receipts
  • Plan shopping experiences where your child makes choices about how to spend money – buying snacks for 5 days with $5.00 or dinner for the family with $10.00
  • Read catalogues to learn price values
  • Plan a savings project – for a special item or gift
  • Plan a charitable project to balance personal spending

The ability to use money wisely gives your child another way of being competent in the world. Children thrive in mind and spirit every time you pose them with a “what if” situation. What if you could buy anything in the world in the next five minutes – what’s your first answer – what else would you investigate before deciding? What if you only had $1,000.00 to live on – where could you live – how long could you live this way? What if talking about “money” was one more way to be a creative and playful family?

Karen Deerwester is the owner of Family Time Coaching & Consulting, writing and lecturing on parenting and early childhood topics since 1984. Karen is also the Mommy & Me director at The Ruth and Edward Taubman Early Childhood Center at B�nai Torah Congregation in Boca Raton. 

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