Have "The Money Talk" With Your Kids

Parents, help your kids form good money habits from a young age. Teaching them to be financially responsible and literate can help ensure their success as an adult.

Americans are financially unprepared and uneducated. Personal debt is at an all time high along with bankruptcy and defaults on loans. Why?

1) We aren't taught about money and finances. I was taught how to balance a checkbook in high school (yep, I'm that old), and kids these days will likely never own a checkbook. They are required to take Math, History, English, P.E., Social Studies, Foreign Language and Science; they are offered electives in Performing Arts, Agriculture, Computers, Engineering, Vocational Ed. But what about Money and Finances?? Nope. It's not on the radar.

2) We are consumers! It's in our face all day to buy, buy, buy. From social media ads and posts, to TV, radio (steaming music apps), billboards, YouTube, podcasts. The list is never ending and the message is always the same.

"If you want it, buy it! "

"If it makes you look and feel better, you should have it! "

"If it's newer technology = better technology = must have technology."

"If it makes you look and feel sexy or younger, you have to have it! "

Whatever happened to saving up to buy something?

That's a thing of the past. You want something and you want it NOW! Hello credit cards, zero down mortgages, cash back on car purchases.

We are rewarded for being financially irresponsible!

No one ever directly talks to you about money but you learn from what you see.

Maybe your parents or teachers or adults in your life were never taught about money or debt and finances in a formal way. But I guarantee they all learned about it, most likely from the adults in their life.

Quite possibly it was the "unspoken" lessons they were taught.

Thrifty Lessons

• Pay for everything in cash! Only buy what you need.

• Don't throw something away until it's so used up or broken that you can't squeeze anything else out of it.

• Turn that old t-shirt into a rag before you get rid of it!

Spending Lessons

• Our TV is 5 years old, time for a new one.

• There's a better truck I want, I'll trade up and buy a new one.

• I can't afford that but I can purchase it on credit or get another credit card!

Or maybe money is a taboo topic. Too stressful or scary to talk about.

Whatever the reason we don't talk about it enough, in the right context. And most people don't seriously think about it until they need more money or don't have any money.

So help teach the kids who will be adults before long. Money shouldn't be the driving ambition to become a professional athlete or to be famous. It's a tool to be used and something to be earned!

Let's start with definitions. Ask your kids if they know what money or debts are.

Money: any circulating medium of exchange, including coins, paper money, and demand deposits.

Debt: Debt is an amount of money borrowed by one party from another.

The most common forms of debt are loans, including mortgages and auto loans, personal loans, and credit card debt. Credit card debt operates in the same way as a loan, except that the borrowed amount changes over time according to the borrower's need, up to a predetermined limit, and has a rolling, or open-ended, repayment date. If you have small children, Sammy is a great site with material to help educate kids about money!