How to Have a Conversation about Money and Financial Values with Your Kids: 3 Tips!

Peter, very good to see you.

Welcome back, everyone. Today we are talking about how to have a conversation about money and financial values with your kids. I know you have three tips. So of course, teaching kids about money and financial values isn't just about preparing them for financial success. It's about teaching them responsible decision making, boosting their confidence and independence, and reducing their vulnerability to scams and manipulation. So these are all really important life skills. And by and large, it seems like they're not learning this in schools, but not necessarily the case for you, Peter. Well, in North Carolina now, it's actually a requirement to have at least one financial literacy course before you graduate high school, which was refreshing to hear. And it's one of the courses that that we helped to sponsor in a couple of the local area high schools here. So it was nice to learn that that was something that they were incorporating on a much larger scale than than than we could possibly take part in. But I have gone into the high schools on on a number of occasions and taught a day or two of this class and some of the basics to the high schoolers, which, by the way, like the I went to the PTSA meeting and shared with parents some of those tips, and they were taking notes on things as simple as learn to sign your name, right?

Learn your Social Security number. They are still in many cases these days financially dependent on their parents. And if we had these kind of conversations at an earlier age, perhaps we could prevent some of that or at least give them some motivation to understand the value of money and what we're providing for them very early on and all through life. Right. All right. So let's walk through those tips now. Your first tip is to tailor your approach to their age and understanding. So let's walk through children versus tweens and then to teens, please. Yeah, absolutely. I mean, for children, it could be just the conversation about money.

And again, as simple as as counting and where possible. I know that we rely a lot on technology and digital currencies through the form of credit cards these days. And there's not as many cash transactions. But where you have that opportunity that there is a cash transaction, let them handle that transaction so they see the money going in. They know how much the item costs.

They see it total up. They get the change. Those kind of just basic principles can then cascade into conversations about saving and about taxes and things like that. So give them an allowance so that they can make some of their own purchases, maybe something that is a little bit more advanced for the kids. And as we get into those tween and teen years, maybe they are working for some income. Maybe they've got their first job.

Maybe they've got their retirement account for. And certainly a conversation about debt is important as well. Trying to make sure that they understand that that debt is an obligation that you are going to have to pay sooner or later. And if you choose later, it's going to be a higher, much higher amount. So where possible, instead of we've got the ability to put almost anything on debt and credit these days, instead of doing that, maybe working and saving and having some delayed satisfaction and gratification by purchasing that item a little bit after the fact when you can afford it rather than putting it on debt now.

And a great conversation for the young ones when they want that little item, that something. Sure, I can buy it for you now in the store and you'll have to pay me when you get home and when they get home. It's a few dollars more than what it costs in the store. Well, why is it that much? It was only this much in the store. Well, that's because you borrowed the money from me and I'm charging you a premium for it, an interest rate for it.

And much, much more often than they do. You mentioned, you know, maybe saving up for a big purchase, you know, have this kind of vision board or goal, something you maybe really want a nice bike. Right. Yeah. Or a video game system or a new video game. Right. That's big for a lot of these kids these days is that they want the latest, greatest system.

Well, you may be stuck using that older outdated system for a little while, maybe a couple of birthdays, maybe a few chores around the house until you can save up enough to buy half or pay for all of that item. And the conversation between what is a need and what is a want is also very important part of understanding these things as well. And that brings us to point number two, which is to use everyday opportunities to teach. Kids may be a good everyday opportunity, monopoly life, things that we used to play around the kitchen table as a family really did have some financial value and understanding.

No, nobody loved when you had to pay taxes in monopoly or when you had mortgage properties or go bankrupt in monopoly. Right. I mean, I've seen videos of family fights where kids flip over the board. But that frustration factor, learning that as part of the game might help them avoid that kind of frustration in real life later on. They you got to teach these kind of values and eventually remember, you know, we are going to pass on and there will be some legacy left and that can be positive or negative. And it's not just the value, it's the values that we pass on to the next generation that does not start when we pass assets and pass on that starts when we have these conversations during life. And it's very important to start as early and often as possible. And then last, of course, lead by example.

Yeah. And my son is super concerned with debt. And it may be part of the conversations that he hears around me about the kind of Dave Ramsey model of living a debt free life.

And he has really taken that to heart. And he's constantly asking me, do we have a mortgage? How much do we have on the mortgage?

Do we have any other debts? But but those are conversations that he hears. And I also know that when I I talk to people, they they tend to really hold to those examples that they had when they were young. And they can go one of two ways with it.

Either they want to follow in the footsteps of good examples or they may have had bad examples and promised themselves at some point in time that they will never be in that kind of situation. So just try to be that good example for your children, for your grandchildren, and where possible, teach them the value of money, teach them the necessity of understanding money, teach them not to just rely on technology. I was actually speaking at a fraternity recently and I said, you know, I know we all do digital banking, but do you think that if your credit card company or your bank made an error that was not in your favor, that they would come back and say, oops, my bad.

Let's correct that. And they thought that they would know they absolutely wouldn't. In fact, the banks made I think it was like six point four billion dollars in twenty twenty two off of overdraft fees, non-sufficient fund fees and ATM transaction fees. So that is a lot of money that's going out of our pockets to the bank's pocket just because we don't have that firm grasp on our finances.

We've got to teach that that at a young age and reinforce it throughout a lifetime. And just to kind of tie a bow on all this, I think some families, Peter, maybe are uncomfortable talking about money, but these are good examples like entry level conversations where we don't have to talk about salaries or things that some people feel uncomfortable talking about. Indeed, it is a difficult conversation and people are close to the vest with with their finances. But you don't have to divulge every penny that you have and where you have it to have basic conversations about money, about finances, about your hopes and dreams and goals and what you've done to work to achieve them throughout your lifetime. And maybe, you know, what what you envision for the future and what you're doing now to to make that happen and how you've handled certain things. You know, I do have a will and my legal documents in place and, you know, amongst the family, this is why I I have trusted this person to handle these things or at least this is the person and make those wishes and desires known and documented.

Of course, I meet with a lot of people, you know, retirement age folks who still have not done those legal documents. That is an important part of this conversation as well, is that you've documented wishes and goals that that you have with your money. So I'm glad we had this conversation, Peter. I know this has been on your list of topics that you wanted to do for a while. So this is great. But if somebody wants your help to get the ball rolling with the conversation with their family, how can they reach you?

Yeah, give me a call. Nine one nine three zero zero five eight eight six nine one nine three zero zero five eight eight six. And actually, one of my favorite things is a multigenerational planning session when when parents bring in their children or the or their parents, when when individuals bring in their parents as part of that conversation so that everybody's on the same page within the family.

Guess what? It is not just a factor of one plus one equals two. It is an exponential factor that benefits the entire family when you have these kind of conversations. So, yeah, give me a call if you have not had that, if you would like a list of things to discuss with your child, with your teenager, with your college age or with the person who's just starting a job. I've got a list of bullet point items to have conversations about.

It's not exhaustive, but but it can be good groundwork for having those conversations. Great. Well, Peter, again, thank you so much for your time today. I really appreciate it. Always a pleasure, Aaron.

Thank you. Everyone, Peter Rashad here, hope you enjoy the content. As always, make sure that you like, subscribe, share the videos with others that may find this information helpful. And as always, you're welcome to be in touch or to submit questions or comments. You can comment below the video anything that you'd like to see or hear shared on our YouTube channel. And in future videos, if you've got a topic that you've been thinking about or is of concern for you financially, be sure to let us know. We'd love to help you by discussing it on the channel. So appreciate the continued views and the likes and the subscribes, the shares, the comments always helpful. We look forward to getting you the information that you need.

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