Talking to Your Kids About Money

As a parent, you want your kids to be happy and successful. You’re off to a great start! The exceptional base of foundational skills and knowledge your kids get from their Montessori education, combined with the dedicated integration of each child’s individual needs, values, and interests, sets them on a course to find joy and fulfillment in their everyday lives. 

Yes, Montessori students are fortunate to have the emotional and intellectual support to become well-rounded, independent adults. If only that's all you have to consider! The simple truth is that life takes money. We all incur expenses beyond basic needs like food, clothing, and shelter. Sports take equipment, art requires materials, academics need textbooks and internet access. Your kids want to wear certain clothes and buy the latest gadgets and try that new skincare trend. It may not buy happiness, but in the words of Ice-T, in his role as Odafin Tutuola, “Money buys choices.” (Anyone here a fan of Law & Order: SVU? Anyone?) 

Exposure to financial concepts early in life will help your kids make sound decisions later, no matter how many options are available to them. Start early, and keep talking. Consistently discussing money with your kids as they grow and learn more about themselves will allow them to develop healthy financial habits in the long run. Just remember to keep your lessons age-appropriate along the way! 

Allowances

Deciding to give an allowance can be a tricky needle to thread. The Montessori mindset promotes children doing things because they find it fulfilling or interesting, not to get a reward. So how to proceed? You can give your kids a set amount of money to spend as they choose each week, with no strings attached. Or they can do chores to earn pocket money, a mutually beneficial way for them to learn the value of work. Ultimately, it’s up to your family to develop a system that works for you! Regardless, having their own money is integral to your kids learning how to make responsible financial choices. 

Savings Goals

Does your little one have a piggy bank? Seems a bit old-fashioned, but having one is a great way to introduce them to the idea of saving up. Using physical money, tangible coins and bills they can hold and count, helps them to understand money as a finite resource. This is particularly important because Generation Alpha is more likely to use digital payment methods, like credit cards and mobile apps, than actual cash. Young ones might not perceive how these “invisible” payments connect to withdrawals from a bank account or a loan that needs to be repaid. 

When they are older, especially if they start working, help your child open up a personal savings account that they manage themselves. Discuss the pros and cons of spending, saving, and donating. Show them how to track balance and interest. Give them tips on using a debit or credit card, or a banking app, wisely. Teach them how to set a budget. Encourage long-term financial planning, like purchasing their first vehicle or investing in a college fund. 

Shopping

Before going grocery shopping with your little ones, take a couple minutes to review the store’s circular or online ads with them, build a meal plan, and set a budget. At the store, there are a number of ways to engage your youngster. Compare the price and quality of a brand name and a store version of a product, and allow them to choose. Have them hand the payment to the cashier. If they know how to add and subtract, ask them to calculate the change for your purchase. Review the receipt for savings, taxes, and surcharges. 

When your kids are older and they go shopping without you, resist the urge to judge or criticize how they choose to spend their funds. Being a consumer means experiencing buyer’s remorse and the inconvenience of trying to get a refund yourself! 

Family Values

A regular family meeting is the perfect time to talk about money matters with your kids. Ask how they used personal funds this week and what they plan to do in the coming week. Take every opportunity to explain why and how you made certain financial choices for the family, so your kids can consider how to prioritize their own spending. Be honest about mistakes made and lessons learned. Talking to your kids with as much transparency as you are able will contribute to the sense of trust they feel in your family as a team. Give them space to share their thoughts and ask for advice. It’s important for your kids to talk about money in order to develop a healthy relationship with their own finances. 

For useful tips and strategies, listen to “How to Discuss Money with Children at a Young Age” on the Modern Montessori Podcast, with special guest Debbie Chen, a professional accountant, certified coach, and financial educator. Contact Debbie @theholisticcfo on Instagram, or search The Holistic CFO on LinkedIn.