Are You Talking with Your Family About Money?

by Miranda Marquit · 8 comments


One of the most important subjects you can talk with your kids about is money. Indeed, it is often a good idea to talk about finances as a family. Having money discussions with your children can be a good way for them to get a handle on what is happening in your family, as well as provide information that they can use later on in life.

Reluctance to Talk About Money

We have a general aversion to discussing finances with our friends and extended family, and there is some reason for that. However, discussing money with your children and your life partner should not be something to shy away from. It can be hard to talk about money, especially when finances are tight. Having regular discussions about the state of household finances and shared money goals, though, can serve as a valuable resource for your children, as well as draw the whole family closer together.

How to Talk About Money as a Family

First of all, it is important to assess where everyone is at in terms of maturity. You want to cover topics that are general, and that most of your family members can understand. Think about the terms that you will need to use in order to make the discussion understandable to younger children.

Realize, too, that you don’t need to go into detail about family finances. There is no reason to pull out the bank statements and go through every item with the whole family. You can, though, talk about your budget in general terms, such as saying, “We have $XX for entertainment this month. Would you rather go to a movie, or go out to eat?” In tough economic times, explain that money is tight, and everyone needs to cut back. Tell your family what you will do to help the family finances, and encourage each member of the family to name something they can do to help.

A money discussion is also a great time to talk about shared financial goals. You can talk about planning a vacation, or saving up for a new TV for the whole family. Create a plan that shows how much is needed, and how much the family needs to set aside each month to reach the goal. Encourage everyone to contribute. Children will see how to plan for purchases, and you can encourage them to follow the same process with their individual wants.

Set aside a regular time to talk about finances. You should check in regularly with your life partner anyway, going over the budget and addressing problems or planning to reach goals. You can have a regular family budget meeting as often as you like. I think once a month is enough for a family money discussion, but others might want to meet more often than that. Create a regular time to talk about money so that family members have time to figure out what they want to talk about.

You can also set aside time to answer questions about money. Prepare “mini-lessons” on money, addressing basic topics of financial literacy. This way, you can make sure that your family understands the concepts behind money.

Talking with your family about money is important. Take the time to have these discussions, and your children will grow up with a better grasp of solid money management.

This post was featured as an editor’s pick at the Totally Money Blog Carnival.

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{ 8 comments… read them below or add one }

indio February 8, 2011 at 8:31 am

We have the financial discussion weekly. It usually happens when I’m paying out allowance and we talk about what they will use it for, what they need, what they want, how to save it for when they want something special and how they can take on special projects to earn more.
The school recently asked us to make a donation to the media/library in honor of your child’s birthday. One child was very interested in doing this so I agreed to match whatever they wanted to contribute. It was a way of showing that the money can do something good, even though they don’t directly benefit from it.

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vered February 8, 2011 at 9:01 am

We discuss money freely. The only thing we don’t share with the kids is our net worth. But we discuss all other aspects of money management, saving and budgeting.

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Jenna February 8, 2011 at 9:30 am

I think turning money conversations into learning experiences is key. I learned a ton about budgeting and how much something is worth through conversations with my parents about vacations. I also had a really eye opening experience when I was in middle school and was in a ski accident. Watching all my mom handle all my medical bills really opened my eyes to insurance needs.

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Perry West February 8, 2011 at 5:23 pm

I think talking with your family about financial things is important. This makes them involved and makes your kids more responsible when it comes to money. They get to know what is important about money. This also makes them ready for the things that they need to know once they grow up.

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Determined February 8, 2011 at 8:55 pm

Growing up my parents never discussed money or budgeting with us. Never. I sometimes wonder if talking about money would have helped me manage it better during my college years. I am still learning the lessons of budgeting and living within your means.

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BettyLaVerne February 11, 2011 at 7:09 am

Your spouse may be hiding credit card debts, and other money issues. In the ideal family, talk about money is common, and treated honestly and openly. But, we are not all ideal, are we?
Do you lie about money to your spouse?
Watch this:
http://today.msnbc.msn.com/id/26184891/#41252548

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SavvyYoungMoney February 11, 2011 at 11:05 pm

Starting from a young age, my parents used real life examples to teach me about personal finance. Thanks to them, I became very interested in the topic. However, they took a “lecture” instead of a “discussion” style approach. Even now that I’m a successful young professional, they still assume that I know less than they do (which is not true in many cases). Because of this, there’s not much room for the exchange of ideas.

This is why I think the “assess where everyone is at in terms of maturity” point is especially important. Parents might even learn a thing or two from their adult/young adult children as long as they keep an open mind and are receptive to discussions.

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MyCreditGroup February 14, 2011 at 7:07 pm

I think this is an excellent post/topic. We’re in a similar industry and talk to so many people that are in debt simply because they just dont really understand it. I really think there should be more focus on credit, debt and finances in general taught in schools.

My family didnt discuss it when I was growing up and it wasnt taught in my school so it’s been 30 years of trial and error.

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