What do you teach your kids about money?
I know lots of parents do allowance but that hasn’t worked so well in our family. There was anxiety about lost money, skipped payments, fights over what the money should be used for. It didn’t seem like a great way to introduce financial life to my kids.
So I switched strategies and my new plan seems to be working well. I just try to talk to my kids about money without attaching emotion to the topic, without getting into any big issues of rich or poor, without even focusing much on values like saving or spending. I am basically teaching them about money the same way I teach them about new words or the solar system.
My oldest kid is eight and I’ve taught her about our mortgage. She can read the monthly statement. She knows how much we owe on the house, how much we pay every month, how much of that goes to the down payment and how much goes to the bank, though she doesn’t understand what interest is. She loves to open up the statement and as far as I can tell, she doesn’t equate the house or the money we owe with anxiety or status or anything much at all.
My hope for my daughters is that they grow up financially literate and comfortable talking about money, that its natural for them to do so and not scary, that they are able to talk about money with bosses, business partners, girlfriends, boyfriends, husbands or whomever.
Maybe in a year or so, I’ll attempt allowance again.