“Mommy, are we rich?”

“Daddy, how much money do we make?”

A child’s curiosity knows no bounds so it is best to be prepared when your son or daughter questions you about financial topics you typically view as taboo.

So how should you respond?

First, it’s important to recognize the value of having conversations about money with your children. No matter how much money you have, you should teach your children to have a healthy relationship with money and the responsibilities that come with it.

You can begin by considering the values that already exist among your family. What principles do you show are important based on the example you set for your children? Is that what you want your children to consider important? In doing so, emphasize the benefits of hard work, sacrifice, and responsibility. Help them to see the correlation between putting in the effort and providing a secure life.

Life coach John Christianson gives these tips:

  • Be transparent about your wealth. “The lifestyle your kids enjoy now is based on your financial success and may not be the lifestyle they are able to achieve when they leave the nest. They need to be prepared for what could be a big lifestyle change as they head out on their own.”
  • Show that work is important. “Your kids should know they are expected to work, both to earn money to support themselves and to find purpose and enjoyment in using their gifts and talents.”
  • Foster a stewardship mindset. “Money is a tool, not a toy. Teaching kids to be stewards of family wealth helps them see beyond the material things they can obtain with money and understand the power of money to effect change in the world.”

Remember to tailor these conversations depending on your child’s age and level of comprehension. For example, a young child can benefit from participating in small “jobs” at home to teach lessons on working, saving, and budgeting. As your child grows older, though, you may choose to have conversations that delve deeper into concepts about wealth, entrepreneurship, and generosity.

Although these conversations may feel difficult at times, your child will definitely benefit from your insight. Providing them with such vital information now means putting them on the path to a secure and meaningful future.

Don’t hesitate to contact us if you have any questions about your financial situation!