Teaching children about money and financial responsibility is a task few parents and caregivers seem to relish. One survey found that parents find it easier to talk to their kiddos about bullying and drugs than money. That same survey found that three-quarters of parents say they regularly fudge the truth when it comes to talking to their children about money-related stuff.
Tie in privilege — a topic that many adults struggle to grasp, and continue to bristle at — and things become especially… complex.
Yet experts say that having conversations with children about money and privilege is really important, no matter where the family falls on the financial spectrum. Here’s how to get started.
First, start early.
“Research has shown that kids can begin to understand concepts about money as early as age 3,” said Jim DeGaetano, president of Diamond Wealth Advisors and author of the children’s book Larry The Bunny Saves His Money.
“Of course, each child is different, but I like to view it similar to how we teach our kids about language,” he said. “For our children to learn the language, they must hear it and see how it is used. When it comes to money, my suggestion is to be open about it with your kids.”
To start, keep it really simple. Like, just explain that parents work to earn money. Note that you use that money to buy everyday items in your life. Your young child sees you pull your credit card out in the grocery store, for example, so just acknowledge it when you do.
As they get a bit older, they’ll develop math skills that allow them to start thinking about good money habits. The Child Mind Institute says that really starts to happen when children are in second or third grade, at which point you can start to involve them in more in-depth conversations around money. (More on that below.)
These early conversations aren’t explicitly about privilege or wealth, but they’re laying the groundwork so that you raise children who are comfortable discussing money and who won’t be afraid to ask uncomfortable questions as they get older. The parental instinct to shield children from all things financial only teaches them that it is taboo.
“Many parents do not want to bring up the conversation because they don’t feel their kids will understand or that they don’t want to burden them,” DeGaetano said. “I’m not saying that you should be reviewing your personal net worth statement with your 1st grader, but building the framework for future conversations about money starts small, like talking about where money comes from and how it is used.”
Encourage them to learn basic budgeting.
An important part of teaching children about financial privilege is making sure they can identify the fundamental difference between wants and needs. (There are a lot of kids’ book on this topic.) Consider an allowance, not because young children need to help cover their own basic needs and expenses, but it can provide a practical way to get kids thinking about spending, saving, broader financial values, and on and on.
“When kids get the ‘gimmes,’ it’s time to talk about allowance to cover some basic needs and wants,” recommended Jayne Pearl, author of the Kids and Money guide books for children.
Or if you don’t want to go the allowance route, invite your children to help you shop with a clear list and budget.
“If, while shopping at the store or online, the child wants something not on the list or more expensive than estimated, the parent can say, ‘Let’s see if we can find other things on the list for less, so we have money in the budget to pay for that,‘” Pearl said. “The parent then becomes a coach, instead of the ‘meanie’ who says no all the time. Kids practice learning how to make tradeoffs and learn that no matter how wealthy one is, money is a finite resource.”
All of this is about helping kids understand things like financial limits, spending and what money can (and can’t!) do.
Be open with your kiddo about your family’s financial situation — up to a point.
A lot of parents dread the inevitable questions their children raise about money, like, how much they earn or how “rich” or “poor” they are, Pearl said.
“Instead of dodging these ‘bullets,’ consider them opportunities to impart values and lessons you’ve learned about family wealth,” she urged.
Experts generally agree that it is good to tell children enough about their family’s financial reality so that they feel informed, but not so much that it becomes a burden to them.
And that applies whether your family is relatively financially privileged or not. Children may know more than their parents think, and in the absence of up-front information from their caregivers they may fill in the gaps in unfortunate ways.
There’s no script to follow, but it’s generally a good idea to plan ahead.
“Knowing what you want to say… can help make this a little easier,” noted a blog post from Rady Children’s Hospital-San Diego that offered some particular pointers about talking to children when money is tight. Be calm, and keep it simple.
Load kids up on positive experiences that cost nothing.
When talking to children about class and financial privilege, Pearl said it’s important for parents to emphasize that “money does not make people happy: many studies conclude that beyond earning $60,000 to $80,000 a year (a level that usually enables folks to afford the basics with some left over for travel and other ‘wants’) does not increase happiness.” (The low end of that range is well above the median income for individuals across the U.S..)
In a similar vein, it is important for parents to root children in happy experiences that cost nothing.
“Challenge your family to create memories without visiting a mall or a store,” the Rady Children’s blog post urges. “Some ideas: bike riding together, going to a park, visiting yard sales, free movie nights, concerts, library events, museums and other local art, cultural, or sporting events.”
This is all harder during COVID-19, of course, but the idea is to show them — not just to tell them — that so many of the best moments in life truly are free.
Make space for their feelings — but be careful about your own.
When talking to children about financial privilege, as is the case when talking to them about all types of privilege, it is important to remember that lecturing or preaching doesn’t work.
Instead, give kids an opportunity to open up about their feelings, thoughts, fears and concerns. Helping young children name and identify emotions that come up around money and privilege can be a really valuable tool, and helps validate that both can have a real bearing on how they feel.
However, it is important for parents to be mindful about not oversharing your own feelings about your family’s financial situation or financial privilege.
“Do not let your disagreements around money or negative conversations about it be front and center in front of your kids,” DeGaetano said.
More on kids & money:
This story is part of a HuffPost Parents project called “I See Me,” a series for parents and kids on the power of representation. We know how important it is for kids to see people who look like them on the biggest stages, including politics, sports, entertainment and beyond. Throughout February, we’ll explore the importance of representation in teaching kids about difference, acceptance, privilege and standing up for others.