When you teach your kids about money, a lot of your effectiveness comes from how you deliver your messages. Overall, what you say should be positive, but there are a few phrases that routinely slip out of parents’ mouths. Here are some common finance-teaching whoopsies and how to fix them.
You can’t afford that./It’s too expensive.
Let’s be clear and say that it’s a good thing to put the amount of money your child has to spend out in the open. The problem here is simply that the statements leave no option for growth. Your child might not have the money he needs for what he wants at the moment, but maybe, with a little careful planning, he could acquire the funds over time. Instead of saying what your child can’t do, point out what he can. For instance, you can say something like, “Well, right now you have $15 to spend, and this option is $20. Can you think of some ways you could earn the extra $5 you need?” The idea here is that, instead of shutting down your kid’s desires, you will redirect it as a positive goal to strive for in the future.
We can just pay it off later.
It’s a contemporary reality that the majority of people use credit cards for things they need and want. The issue with this statement is mainly that, in saying it, you heavily imply to your child that impulse purchases are okay, and that it’s more important to think in the here and now than it is to look forward to the future. What you should say to your child instead is something such as “Let’s sit down right now and figure out what would happen if we aren’t able to pay this off. Can you help me make two good plans for how we’re going to pay for this?”* These statements get your child to understand that not paying has one or more consequences, forcing him to think of a concrete method for paying the bill.
*(It’s always a good idea to have a “Plan B” when dealing with credit repayment. The usual “Plan A” methods, such as working extra hours at work, don’t always pan out.)
I don’t know how we’ll pay the bills./Don’t worry about the money.
No one is perfect. There will be times where money is tight and you aren’t sure exactly what the best solution to a money problem is. Even so, kids aren’t stone statues. They have emotions and are perceptive, and if they see that their regular rock (you) has a big problem, they’re bound to do some worrying. Instead of saying you don’t have a clue or that they shouldn’t worry, say, “Yes, this is a puzzle to mommy/daddy. We’re probably not going to [activity] as much as we have been. But I’m looking into ways to fix it. Do you have some ideas on how we might save a little money this month, or what we could do instead of [activity]?” This answer reassures your child that you are doing something about the problem, presenting it merely as a “work in progress” rather than a hopeless abyss of financial despair. It is clear about what your child might see in the future (less [activity]). It also gives your kid a chance to contribute his own thoughts, making him feel like part of the solution and the family in general.
That’s a waste of money.
This one is a no-no because the value of something is completely subjective. There was a time, for instance, when few people saw the need for a cell phone or computer. If your child wants to buy something you think isn’t a good purchase, don’t just hand down your judgment. Go beyond that to explain why you think the money could be of better use elsewhere. Ask your child how he intends to use the purchase so he doesn’t buy merely from impulse. After that, let your child learn through experience that not all purchases end up being ideal, especially if he’s paying with his own funds.