Robert Palmer on why parents should talk money with their kids:


In the age of technology, it is easy for parents to be disconnected from their children in certain areas of life. Our kids are learning important life lessons through social media, television, music and much more. And honestly, we are letting that happen. If we can avoid awkward conversations with our kids, then why not.

But it is time that parents start having crucial conversations with their children that will help develop healthy habits and shape their future. No, not the ‘birds in the bees talk’, that is for another radio station. I am talking about teaching financial lessons that will become second nature to benefit them greatly as they grow older.

We encounter several financial decision daily, no matter how old we are. Even children wanting a certain toy, handling their allowance, or getting paid for chores, they have to make a financial decision on how to handle their money.

Statistics show that young adults are entering the real world with little knowledge on how to handle their finances, save money, build a budget and understand what their financial reports are telling them.

Parents need to break their bad financial habits and start setting the right example to give future generations a chance at financial stability.

Our kids have a lot of financial struggles ahead of them:

What are kids are watching:

  • Among kids currently ages 8 to 14, 65 percent say they learn more about money from their parents than they do at school, according to a T. Rowe Price survey released last month.
  • The difficulty? Although the T. Rowe Price survey found that 69 percent of parents are very or extremely concerned about setting a good financial example for their kids, 40 percent are relying on a “do as I say, not as I do” attitude for teaching their kids about money. Almost half don’t have an emergency fund that would last three months or more, 28 percent carry over a credit card balance every month and 28 percent have taken money from their child’s piggy bank.

What do they see/ What you can do:

  • Parents are always paying with plastic. They never see any real money managements. It is almost like, set it and forget it, in their mind. They do not understand the concept of credit cards. Explain how credit cards work, and how you can use them to your advantage.
  • Parents have major differing opinions on money- like anything in your marriage, it is important to be on the same page and consistent. Show your children how to talk productively about finances and make important decisions together.
  • They notice mom/dad hiding a purchase from the other. This can throw many mixed signals to a child.
  • Kids think luxuries just happen. Talk with your kids about how you were able to make some big purchases or go on vacation. How did you save money to be able to afford this luxury? (Maybe for the older kids)
  • Parents do not give a full explanation when discussing why they might not be able to afford something. You do not have to let them into your checkbook, but an explanation can go a long way. Whether you have more important financial responsibilities, or something unexpected came up, giving them a simple explanation might help them understand financial priorities.
  • “Here is your allowance, now go do what you want”. An allowance is always a good thing. But it can be even more helpful to ask what their plans are for using their money. It can be easy for a young individual to burn through their money knowing they will eventually get some more. But, letting them think things through and talk about their wants and needs, and how they can be achieved, helps them build good spending habits.
  • Talk through purchases with them- One of the biggest lessons I learned growing up is when my dad always asked me to think about why I needed the item I was about to buy. I would receive my payment for doing chores and would immediately want to go to the mall. Before we left, he would ask me to discuss what I was buying and why I wanted to buy it. I would end not making the purchase because I knew it was something that would last long or I could save my money to get something better.

In teaching your kids good financial habits, parents can also keep themselves accountable. You have to practice what you preach and set a good example.