(I could post a lovely pic of my boys smiling at the camera or looking lovingly at each other, but somehow the outtakes are more fun. ;) Okay, back to business…)

I recently chatted with a friend who had been saving since she was eight because her parents taught her the habit of saving, but she was terrified to spend. She learned that saving was good and spending was bad. She knew how to save but never learned how to think through spending decisions. You’ve likely already heard about give, save and spend jars, or encouraging your kids to compare prices at the grocery store. And although these skills and habits are super important, the most important things you can do are help them learn how to think about money, learn how to manage their emotions related to money, and avoid passing down emotional financial baggage. You have a great deal of influence over how your child thinks and feels about money. And their beliefs and feelings around money will have a far greater impact on how they handle money as adults than any skills or habits they learn when they’re young.

Don’t get me wrong, skills and habits are super important, but feelings and beliefs will determine their behavior. It may sound like a big task, but there are some simple things you can do that will have a huge impact.

Bring money into the open.

We talk about football A LOT in our household because my four-year-old is obsessed, but I don’t feel pressure to know every quarterback’s name and team, just like you don’t have to be a financial expert to bring it into conversation. Make money a normal topic, like food or sports or plans for the weekend. Take the emotional charge down a notch by creating a comfort level and dialogue around money. And don’t feel like you need to have all the answers. Start by sharing the simple stuff like how much things cost – groceries, toys, cars, houses – help your kiddos understand that things cost money. Let them know you have a bank account where money you earn gets deposited, and money you spend gets taken out. It sounds simple, but given that we so often pay with a tap of our phone or the swipe of a card instead of handing over actual cash, just knowing that every transaction is a purchase that comes from an account is helpful for them to know.

Let them talk and ask questions. If you don’t want to answer because you feel they’re too young to handle the information (like how much money you have), let them know it’s a great question and you’re looking forward to sharing more with them when they’re a bit older.

Show them that money involves tradeoff decisions.

“If we spend all of our money at the toy store, we won’t have as much for groceries.” Share that you have a certain amount of income (you don’t have to tell them how much unless you want to) and that you make decisions on how to use your money based on what the family wants and needs both now and in the future. Every purchase is a choice based on your values, goals, needs and desires. Demonstrate that you are intentional with your spending and show them that although you don’t have a bottomless bank account, you get to make decisions about what’s most important. Every yes has a no – verbalize some of those decisions to help them understand.

Build their “advertising immunity”.

A few weeks ago, I was watching TV with my kiddos, and a commercial came on with a bunch of clips of people kissing, and then a bottle of soda flashed on the screen at the very end. We wondered together afterwards what the people kissing had to do with the soda (not much!). Maybe they want us to think we’ll fall in love if we drink that soda? We had a good laugh about how silly it was, but I also realized this was a great opportunity to chat about advertising.

Help your kids recognize ads, whether they’re on TV or inside video games or on a billboard. Bring their awareness to the fact that someone somewhere is trying to get them to buy something. Ask them what’s being sold and how much it costs. Ask them some “wondering questions” about the imagery and storylines in the ads. “I wonder what all of those couples kissing have to do with soda.” This awareness and thoughtfulness will help them see through marketing ploys and build their resistance to advertising so that they make more thoughtful spending decisions rather than getting caught up in marketing promises.

 Watch your language around money.

A few years ago, my older son asked if we were poor. I was taken aback by the question because we have a home and food on the table and other creature comforts, but he noticed that I would say that we “can’t afford” certain things, and he took that to mean that we might be poor. I took that phrase out of my vocabulary right then and there!

That said, I don’t think I’m alone in finding myself saying things like “we can’t afford it” or “maybe if we won the lottery”. Perhaps money is a stress point for you, or maybe you and your partner have different perspectives on money which leads to tension and arguments (sometimes in front of your kids). Financial conversations can be really stressful, but it’s important to remember that your words and emotions have a strong impact on how your kids feel about money. If they see you fight about it, they’ll associate money with conflict and stress, and they’re more likely to repeat those patterns in their marriage. If they hear “we can’t afford it” constantly, they might feel like more money is what brings happiness.

So what can you do? Instead of “we can’t afford it,” try “we’re not choosing to spend money on that because saving for college is more important.” Instead of arguing with your partner about money in front of the kids, take it behind closed doors until you can get to a place where you can have amicable conversations in front of your kiddos. It’s totally okay for your kids to see that you and your partner see things differently, but if your emotions get triggered they’re going to feel it. 

Help them develop a decision-making process for financial decisions.

As parents, we want our kids to make good decisions, and I’ll admit, my default is to just make the good decision for them. But then I think about them going to college and making decisions when I’m not there, and it gives me heart palpitations! So I fight the urge to decide for them and instead focus on helping them learn how to make decisions, not just what decisions to make. We need to show them the process, not just the right answer.

When you’re making decisions, financial or otherwise, verbalize your thought process so that your child can hear the options you’re considering, the tradeoffs you’re thinking through, and your reasoning for making the choice you decide to make. When they’re making decisions, help them slow down and take time to think about what’s most important to them, brainstorm options, weigh the options based on what’s important, and come to a decision.

When they’re super excited about buying something new, encourage them to wait a day before making a decision, and model this for them, too. When we’re emotionally charged, we’re rationally challenged. Help them see the power of pausing before they make a decision to let the emotions pass, and thinking through their priorities and options before they take action.  

Guide them, but let them make mistakes.

Last summer, my son really wanted to buy a Minecraft toy with his birthday money, so we drove to the store, bought the toy, he shredded the packaging, played with the toy, and within five minutes of leaving the parking lot he was totally over it. He asked if we could return it and get something else, but they wouldn’t take it back because he shredded the packaging. In that moment, he learned how quickly $12 could disappear with an emotional purchase decision.

Let your kids make poor choices with their money. Yup, I said it. Let them mess up. It’s so much better that they do it when they’re younger, and it’s a $12 mistake, than when they’re older and the stakes are higher. A bad choice that leads to bad feelings is a powerful learning moment for them. As long as the stakes are reasonable, let them make the mistake. And here’s the key: when they learn from it, don’t say “I told you so”. Instead, tell them you’re proud of them for figuring that out on their own.

Remember, they’re watching you.

So much of what our kids learn about money is observed.  The way we talk about and spend money shapes the way they think and feel about money. Do you shop when you’re depressed? Do you overspend and then feel guilty about it? Do you find yourself wanting to shield your kiddos from “money worries” by pretending your resources are unlimited? Do you talk about money (or lack thereof) as if it’s the reason for your decisions rather than your values, goals and priorities? These are BIG questions and not easily resolved, but I bring them up to say that your kids see it and it can strongly influence their behavior around money for the rest of their lives. No pressure, right?! But the good news is that you have the power to change your relationship with money, and model healthy behaviors around money for them.  

After more than fifteen years of working with clients and helping them manage the issues they have around money from their childhood, I can tell you from experience that helping your children feel comfortable with money, learn how to think about money, and manage their feelings when it comes to money is one of the absolute best gifts you can give them. In fact, becoming mindful of how you handle money and talk about money for their sake might help you feel better, too!