Around my family’s dinner table, for instance, we love to write both serious and silly conversation starters on slips of paper, then take turns asking and answering them out loud. Lately, I’ve been sprinkling in money-related subjects. It’s a terrific way to find out what my 9-year-old son does and doesn’t understand about basic finances - such as how a credit card or mortgage works - then fill in the gaps for him. But it’s also a chance to talk about larger themes, like how his spending decisions are influenced by advertising and friends. And since it’s all part of a fun dinnertime game, I can easily reinforce our family’s values about spending, giving, and saving without his eyes glazing over. Here are some age-by-age questions to help you serve up some healthy conversations about dough while you break bread.
“Where does the money in the ATM come from?”
To little kids, that ubiquitous machine can seem like an endless source of free cash, popping out twenty after twenty on demand. Now is the time to explain that you work to earn money, which you then store in the bank. And you can’t take money out that you haven’t put in (save the lesson on loans for later). Go on to talk to your child about your job since many kids this age don’t have a clear idea of what it is that grown-ups actually do all day to earn their salaries.
Help your child visualize how banks work by giving him a clear plastic jar so he see his own money accumulate, then help him identify a not-too-expensive item he wants to save for. For a little extra motivation, tape a picture of the item to the jar.
“Can you name three things we buy that are wants, not needs?”
Helping your child understand the difference between needs (basic food, shelter, clothes) and wants (dessert, movies) is one of the most important financial lessons you can teach her. Plus, it’s the perfect time to introduce the concept of a budget. Just remember that how you talk about your finances will help shape her feelings of control over money. Instead of saying, “We can’t afford it,” say, “We don’t buy everything we want. We choose the things that are most important to us.” You’ll be signaling that money can be managed through planning and thoughtful decisions. Then go over some of the items in your family’s budget and see if your child can identify them as a want or a need.
“What do you think our family spends most of our money on?”
While your child may not fully grasp the concept of a mortgage or rent until he’s older, it’s good for him to understand that you pay for a lot more than clothes, toys, and food. Bring a pile of small tiles or blocks to the table and have him stack them into towers that represent your costs - the tallest for your biggest monthly expense, and so on. Then rearrange them to show him your actual costs. He’ll probably be surprised that you have to pay for things like water and electricity. And the next time he wants to buy extra cookies at the store or a new pair of sneakers he doesn’t need, you can remind him of some of the other costs you’ve already budgeted for that month.
“What should our family be saving our money for?”
This is a great way to discover what’s important to your kids right now - is a new video game system a bigger priority than that trip to the beach? - and for you to talk about some of your family’s financial values. You might point out that you set aside money for college each month before adding more to your vacation fund, that you’d rather spend your entertainment budget on experiences than things, or that by eating out less, your family can go to the movies more.
If your kids suggest buying an expensive item, segue into how they can evaluate whether something is a good value for the money. Is it well-built? How much will they use it over time? How much joy will it bring your family? If it’s just too pricey, remember to use language that shows you’re in control of your cash. Instead of, “We can’t afford it,” try, “I don’t think that’s the smartest way to spend our money because it costs so much.”
“Have you wondered if we’re rich or poor?”
Chances are, your child has thought about this question, and might have even discussed it with his friends, so this is your opportunity to frame the answer in something other than material terms. After all, there will likely always be someone who has more and someone who has less than your crew. So instead of talking numbers, share what the concept of being rich means to you. You might point out that your family is particularly rich in happiness, good friends, or nearby family members. Then ask what else makes your child feel “rich.”
“What was the best and the worst thing you ever bought?”
It’s hard to know what your child might reveal: That an inexpensive item is more cherished than a pricey one? That she most treasures a toy she had to save up for herself? That an impulse buy didn’t live up to the hype? Whatever her answer, it’s an opportunity to reinforce your views on things like researching items before you buy them; on purchasing long-lasting, quality merchandise; and on avoiding impulse buys. When my son managed to save up his first $20, he couldn’t wait to go to the store and pick out a toy. He was tired of it after a week and still talks about how he wished he had that $20 back.
“What influences you to buy a certain kind of shoes or cereal?”
The average kid will see more than 25,000 TV ads a year before turning 12, and that doesn’t include internet and social media ads or product placement, according to a 2014 report by Common Sense Media, a leading kids and family media ratings organization. To get beyond answers like, “I just like it,” ask your child whether a celebrity has endorsed or tweeted about the brand he likes (yes, those are usually paid tweets); if he’s seen the item appear in a video game, movie, or app (also paid); or if a cute character plugs the product. How might that influence his opinion? Then ask if he’s willing to pay more for a name-brand product and why. You can even set up a taste test and serve two or three name-brands and their generic equivalents for dinner. Can he tell the difference?
“How can our money do good?”
By this age, kids realize we work to purchase necessities and pay bills, but parents should put jobs in perspective by showing that we also work to improve our lives - to bring us satisfaction, to help others, or to give our kids more than we had - and that our money can help others, too. Some families divide their kids’ allowance into four jars: save, spend, invest, and give. Others choose to support a charity as a family. My son has collected money for the American Heart Association and donated the profits from a tag sale to Doctors Without Borders. As an incentive, my husband and I match whatever he raises. Together, you might brainstorm three to five organizations your family would like to support, then narrow the list by researching them at CharityNavigator.com, which evaluates non-profits based on their transparency, accountability, and other factors.
“What’s the harm in using a credit card to buy things we can’t afford?”
The concept of credit is one of the more complicated - and important - lessons you can teach your tween or teen. After all, he’ll have his own credit card in just a few years, and many college kids make the mistake of racking up debt early on. You’ll first want to explain that credit card companies charge interest if you don’t pay off your bill each month. Then bring that abstract lesson to life. Bend the no-screens-at-the-table-rule and use an online credit card calculator to show him how long - and how much extra money - it would take to pay off a credit card if you only paid the minimum. I like the one at Navy Federal Credit Union.
What you can do next
You may be used to your kids asking some money-related questions (“Why can’t we buy this toy?” “How much do you make?”) but asking them about money matters - early and often - will show you where you need to fill in gaps in their knowledge and allow you to emphasize your family’s financial values in the process.