Set your kids up for greatness this year!
With the new year right around the corner, it's the time to make talking about money anything but taboo—especially for parents. Not discussing money can cause a lifetime of anxiety and misinformation for kids. It's no surprise that children look to their parents' behavior as the number one example when they form habits. Good money habits can make or break you in adulthood, which we sometimes learn the hard way.
Chances are, your kids received checks and money from family during the holidays. So New Year's is the perfect opportunity to teach them how to think about money and set goals around it. Of course, it's important to have different conversations at different stages. The way you talk to your 5-year-old about money is going to be completely different from the way you talk to your 13-year-old.
In the book The 5 Money Conversations To Have With Your Kids At Every Age And Stage, Scott and Bethany Palmer—parents who also happen to be a pair of financial advisors—break down the stages of the money talks you need to have with your children, starting at age 5 and going all the way up through the teen years. Here are some tips to get you started:
1. Get To Know Their Money Personality
The Palmers emphasize how crucial it is to know your child's "money personality," which is almost as significant as knowing what conversations to have at what age. Knowing their money personality (yes, even your kindergartener has one) helps you understand how they already view money. The information you learn about them will make it easier for you to help them write their own resolutions.
2. Help Kids Feel Financially Responsible
When it comes to money talks, it pays to start early. Teaching your 5-year-old how to think about the value of money, giving him an allowance and even teaching about savings can give him a sense of responsibility that's hard to find anywhere else. Paying your child for a household task can also create a sense of reality and hard work that he may not have otherwise.
They may be a lot older, but 17- and 18-year-olds aren't lost to this cause. When they're at a turning point in their lives, like graduating from high school or starting college, setting them up with their own bank accounts and suggesting they seek part-time jobs helps them build a sense of financial independence while they learn valuable skills away from home for the first time. It makes them more savvy, which ultimately helps you both out in the long run.
3. Create Money Resolutions
So what resolutions can you give your kids this year? Make it something that fits their passions and money personality. But keep in mind, offering suggestions can also give them direction. Even small things like "set up a savings account" or "earn $20 by helping mom and dad around the house" can make clear goals for the rest of the year.
Don't forget to set resolutions for yourself, too. Make the money talk with your kids a priority—and have fun! It's not just a chance for them to make good habits, it's also an opportunity for you both to connect and revel in your newfound appreciation of the blessed buck. Now thats something to celebrate this New Year.
Sponsored by Thomas Nelson for The 5 Money Conversations To Have With Your Kids At Every Age And Stage