How to Talk to Kids about Money Values, Spending & Giving

This podcast focuses on teaching kids and talking to kids about money values and money mindset. How do we help kids to understand how to save, spend and give? What money stories and money beliefs are we passing forward and what do we want them to learn or relearn? And how do we leave a money legacy that sets them up for success? Dr. Robyn Silverman speaks with Chelsea Brennan during this money episode of How to Talk to Kids about Anything.

Special Guest: Chelsea Brennan

Many parents believe that money is another taboo topic that we just don’t discuss. After all, there is a lot of emotion, status, privilege and judgment tied up with money that make it a topic that can be triggering to many. But when you think about it- where are kids learning about money these days? Many only see the swipe of a credit card & the magic of online shopping- where we press some buttons and we walk out with stuff—or better yet, it appears at our door or in our mailbox! We know this isn’t how it works- and it’s important to teach our kids about money- what we value, what we might be saving for, what we choose to spend money on, which charities we may give money to and what seems frivolous, unnecessary or even counter-productive. But how do we talk to our kids about our family money values, goals and choices- and how can we help set them up with the knowledge, skills and understanding so that they know how to handle money when they need to make important financial decisions later in life? Today we’ll talk to Chelsea Brennan for some answers.

BIO

Chelsea Brennan is the founder of Smart Money Mamas and its monthly membership community, the Motivated Mama Society. An ex-hedge fund manager turned financial educator, she is dedicated to changing the way we talk about money, helping moms connect with all aspects of their money in a way that lets them overcome emotional blocks, identify what they most want, and create the healthy money habits that help them achieve their biggest goals– All while modeling positive money relationships for the next generation. Chelsea lives in Connecticut with her husband (a rockstar stay-at-home dad) and two young and energetic boys.

Important Messages:

  • We all have baggage around money. There’s a great deal of emotion when it comes to money. We can get a fight or flight response from dealing with it!
  • Think about biases so we don’t inadvertently pass them on to our kids.
  • Questions: Dive into your money memory—ie., how did you feel when your mother/brothers came to borrow money from you? What language did your dad have with you when you found the money on the ground? It’s those little pieces of the puzzle that builds the whole picture.
  • Generational story: What do we pass on? “We are a family who never has money. We never have enough. Every time I have some money, someone takes it, an emergency.” We internalize the narrative. Even if we don’t consciously recognize it, our brain is looking for reasons to prove that story.
  • Most core money memories are set around age 7. We get curious about money. Compare. We hear things from parents. One little statement- in our child’s brain- can make a big impression and we go on for decades looking for ways to prove that narrative.
  • We want to understand our narrative because it might be contradictory to our other values! We want to pass on values we truly appreciate and believe in.
  • Family Money Values:
    • (1) What do we stand for? Family time? Philanthropy? Education? Travel? Do this first- because every time we sit down with money, we are voting with our dollars. We are putting in our time, effort and money into the world. When we are clear of values we can take more agency over how we spend our money.
    • (2) When we are clear on our family values, when child asks for toy that is against the declared values (i.e. violent video game), when we develop a narrative of what is most important to us as a family, it’s not just saying no, it’s referring to value—“remember we talked about our top value as ________, I don’t think this aligns with ________ value. How do you think this fits in with who we are as a family?
  • Family Money Values sheet. Education, curiosity, environmentalism.
  • Core money beliefs- also need to have partner voice his money values and history.
  • “We talk about money at our Friday night meeting.” You know the time and place so it gets covered but isn’t triggering.
  • What is your history of money? How do you want your relationship with money to be?
  • “We have the skills and resources to make all the money we’ll ever need.”
  • Security seeker. Want a feeling of abundance so that you aren’t always seeking- you have all the money you’ll ever need. Pass that on to children.
  • “When we save for the future, we are protecting our future selves.” Thinking forward is hard for little kids! Saving feels like taking money away from kids—so explain it this way! “We are saving money for our future selves.” “Next time you are in the store, you will be able to buy XYZ because you will have already saved.”
  • Charity. Want their kids to be generous.
  • Give kids agency over their money.
  • What matters to our children? In the beginning, you can just make your charity a “share jar” so that they can buy something for a friend or if a friend forgets to bring money for something and they want to buy for their friend. Share with the people they love. This is an entre point! It lets kids experience the one-on-one interaction of giving and the joy that comes from giving. Kids really need something tangible.
  • The second part is allowing your children to pick something that they love- that aligns with what they love. For example, giving to animal rescues (World Wildlife Rescues)
  • Allowance can be a teaching tool: A tool to teach them about money- rather than docking pay for work. Consistency is the most important thing.
  • I want it to be a given that they help around the house. Change gender norms in homes to make sure both boys and girls help.
  • Entrepreneurship is important for kids too.
  • Things we don’t say. We never say “I can’t afford that.” We can say; “we are prioritizing something else right now” or we ask; “How do you think we can afford that now?” Pose as question so that every time they need money, they know they have choices.
  • Pay attention to when your kids asks for the next big thing- or they get really interested in something.  Electric guitar. LEGO set. Skateboard. “How do you think you can get the money to afford that?” Not every kid is going to be entrepreneurial- some will wait for allowance.
  • We live in a world where there are a lot of options for kids to make money.
  • Lots of youtube videos on kids who have businesses- 60 second docs. Isn’t this cool? What do you think? (i.e. selling bow ties, lip gloss)
  • How much do you give for your allowance? A dollar an age? This depends on your personal situation- and this question is loaded with privilege. Every family can give a different amount.
  • Older kids- Greenlight or Famzoo debit card system (age 10-13 years old). Physical cash is becoming less and less common. The earlier they can practice digital money and having to pay attention to the number on the screen and not the physical cash, the better.
  • One of the benefits of Famzoo and Greenlight is that you can have sub accounts- they can only pay from buckets.
  • You get oversight- as they go out into the world- you can get texted in stores.
  • Traveling for sports- if they get stuck somewhere- you can automatically send them money when they are in need.
  • Budgeting tool: “You need a budget” tool. At 8 years old- budget account for each kid. They can allocate to different categories. What’s most important? Then those are the most important. They can practice allocating into those buckets for those things. Budget money digitally. Powerful lesson.
  • Have you shown the kids how you budget? It starts with you. Do you know your numbers? “We have X number of dollars for your activities. Let’s sit down in January (or when they ask), how would you like to spend that money? “I really want to go to that fancy baseball camp and we only have X number of dollars to spend on my activities so I need to save Y amount more of my own money to make this happen.” Set the budget so that you are not saying yes to something you can’t afford and it can give your kids the opportunity to learn how to save and invest in themselves or something they want. Chance to practice choice.
  • Around age 12 or 13- turn over clothing allowance to their kid. “I expect you to have shorts and bathing suits for the summer and good clothes for church/temple…but you decide.”
  • Lands end method. (Ron Leiber) Not super expensive or not super cheap. How much would we spend if we went to lands end for clothes? Then you set the budget. Your kid might decide to go to the thift store for t-shirts but they want designer jeans- but that’s their money and their choice. The hard part is to let them make mistakes- and then let them sit with it (didn’t buy the jeans and now they are wearing the old ones that are too tight, don’t have money leftover for more t-shirts and they were cheap or stained)- next time they need to plan ahead better or they need to find a way around the problem (i.e. make more money).
  • When you have little kids- there are ways to prepare kids for this level of responsibility like go to grocery store- we have 25 dollars for fruit- if we get raspberries, we only get 4 little containers- but if we get apples/oranges, we get a lot more. Once they get to clothing they have more experience.
  • Money disparities and privilege- where do you stand? If you have a lot of privilege- need to talk about and expose your children to people of different socioeconomic status- remind them that they don’t have a safe place to sleep, spending time volunteering, how are we helping, how are we changing things?
  • Adopt families around Christmas. (Her story about her brother who didn’t know that some people don’t live in a single family house). Creates conversation.
  • We often talk about racial segregation but very significantly, across the country, socio economic segregation is still a real big issue. Understand it from experiencing it- magnet schools, volunteer, keep line of communication.
  • You don’t need allowance to teach your kids about money. You don’t need to be financially privileged to teach your kids great money lessons. They are watching you and listening to you. How are you handling money and mistakes? Show your own money mindset- even if you aren’t where you want to be yet- don’t get caught in the “we will never be able to afford…” thought-process situation. If your kids see that you have a positive outlook- that will help them to develop a strong money mindset.
  • Saving: with all the positive intentions, parents often screw it up. We sometimes put adult saving expectations on our kids. A 7 year old can’t think to when he’s 20 year old. So having him start saving for a car or collage doesn’t make sense (like taking 50% of his money!). He’s getting the lesson that “when I make money, half of it disappears.”
  • At 3 or 4 maybe they can save for 3-4 weeks. When they are 8, maybe they can wait 6 months. Then they spend it on what they are saving for! That’s what savings is for- to spend at a later time.
  • “Saving doesn’t mean it stays there forever. Saving just means ‘future spending.’ Whether it’s 6 months from now or 3 years- it’s just future spending.
  • Print a chart! Kids are visual. See progress. Print it out- color as it goes- then go get it when it’s all colored in. Then their relationship with money is; “if I am patient, I can get things I would never have gotten otherwise.”
  • By the time they get to 12, then a car or college makes more sense. Still do buckets- like longer term savings. These are the bigger things you might want in a year or two so let’s put money aside for them.
  • SAVINGS GOALS & PRIOROTIES: A savings goal—if you have a savings jar. “This is for when you want to save for something really special that you don’t have enough for in our weekly allowance. You get $5 a week and the LEGO set costs $50, so it’s going to take you a while to save that up. So what if we print a picture of it and post it up, and when you are ready, we can get it together- otherwise we need to prioritize something else right now.”
  • Saving- (1) It’s something extra special. (2) You don’t have enough money for it now. (3) How can you get enough money for it in the future? What can we do?
  • Allowance jars, sharing page and a saving page. Picture of what they are trying to do at top. Savings sheets. Trackers. Available on the website. Visually get to see chart.
  • Sometimes need to take something out of savings to spend on something else. But allows you to see progress even if you have to take money out for necessities. It’s ok as long as you keep moving forward.
  • Money legacy. Pass on to kids. (1) Start today and get things under control. (2) Prepare for emergencies and end of life. Proper estate plan. Life insurance. Cared for. Emergency binder- if someone needs to step in- emotionally step in easily. (3) Majority of wealth is gone in one generation or two. We are not passing on the right lessons. The majority of inherited wealth disappears in one generation- what’s leftover disappears in the second generation.
  • The most important skill you can teach your kids about money is that they have choice. When they feel stuck, there are more options than they can see in the moment. When we feel stuck- we often freeze. Teach your kids- there is always choice and there are ways to figure it out.
  • Start talking to your kids about money. Don’t wait. The sooner we can have intentional conversations- heading off kids filling in with naïve info!

Notable Quotables:

  • “We have these generational money stories. We internalize the narrative. Even if we don’t consciously recognize it, our brain is looking for reasons to prove that story.”
  • “When we are clear on what our values are, we can take more choice and more agency in how we spend our money.”
  • “Thinking forward is hard for little kids! Saving can feel like taking money away from kids so we can explain it this way; ‘We are saving money for our future selves….Next time you are in the store, you will be able to buy what you want because you will have already saved.’”
  • “Give kids agency over their own money—their opportunity to practice., That’s how we get them excited and that’s how we help them build that lifelong relationship with money for anything that they want to do.”
  • “A “Share Jar” allows our children to share with the people they love. This can be an entree point [to charitable giving]! It lets kids experience the one-on-one interaction of giving and the joy that comes from giving.”
  • We never say ‘I can’t afford that.’ We can say; ‘we are prioritizing something else right now’ or we can ask; ‘How do you think we can afford that now?’ Pose it as question so that every time they need money, they know they have options and choices.”
  • “We live in a world where there are more options to make money- even for kids- than ever before. The lemonade stand is no longer the only option.”
  • “Physical cash is becoming less and less common. The earlier our kids can practice digital money and having to pay attention to the number on the screen and not the physical cash, the better.”
  • “We often talk about racial segregation but very significantly, across the country, socio economic segregation is still a real big issue. We mostly interact with people of a similar socio-economic status than us so we don’t understand the differences.”
  • “You don’t need allowance to teach your kids about money. You don’t need to be financially privileged to teach your kids great money lessons.”
  • “Saving doesn’t mean it stays there forever. Saving just means ‘future spending.’
  • The majority of inherited wealth disappears in one generation- almost the rest of it disappears in the second generation. We are passing on money but we are not passing on the right lessons to continue to preserve and build that wealth.”
  • “The most important skill you can teach your kids about money is that they have choice. When they feel stuck, there are more options than they can see in the moment.”

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