[USER]

I grew up in a family that pinched pennies around every corner as a way of life, mostly out of necessity. Now that I’m raising my own children, unfortunately we are currently in a similar position.

I have such a hard time spending money and am trying to achieve a better balance – how do you explain the concept of money to your young children in a way that is truthful and makes sense to them without instilling a fear of spending and scarcity mindset in them?

I do not want to pass these negative neuroses onto them but also want them to have a realistic understanding and appreciation for money and the importance of wise spending.

Thanks so much.

[Kim]

You live the balance. They see it. They will see that you’re not always at the mall but they have what they need.

They see you take them to the library to check books out at not buying them at the bookstore and then stopping for candy or a toy at target every time you go.

When they are older and can truly appreciate a fun vacation you remind them we are saving for a family vacation, remember how much fun we had last time??

That’s when maybe you splurge a little on them. That fun tshirt or hat they want or that cool souvenir that likely cost too much.

That’s when I would let them have fun and give them a souvenir budget so they get to decide what they want

[Surma]

When you say young, what age are you talking about?
I remember mine not knowing what the purpose of an ATM is and thinking (out loud) that all I needed was a card.

The ATM would just spit the money out. Where that money came from was not part of this equation.

I found that being honest with them about finances (in/out), calculations, taxes, credit cards and loans, and expectations vs reality helped guide them on the right track.

Basically, don’t live beyond your means. It’s a process that has to be repeated often, but it’s possible.

One can also show/teach them by using dollar bills, even if it’s just monopoly (game) money.

Also, find out how they best learn. Some are visual learners. Others, not so much.

My now ex had 16 years to teach the children about finances (because he liked to flaunt how financially smart he was), but utterly failed…

I taught them, while learning myself, in a year.

I’ve now started the subject of a Roth IRA with my oldest, but it’s a work in progress because I’m still learning about it myself.

[Falyn]

I read a long time ago that telling kids you can’t afford something snowballs in their little minds..

like, if we can’t afford this video game I want maybe we can’t afford food or a house, etc.

So, I’ve always made it a point to never say we can’t afford something.

Instead, I explain wants vs. needs and explain that we get many of our wants but not necessarily all of them.

[Tony]

I grew up in this type of household as well, and I feel grateful that I learned to be frugal, resourceful, resilient, and creative instead of always being able to get what I wanted all the time.

Personally, I would reframe it as choosing to intentionally spend your money on things you value vs.

spending on things without value or that don’t have a meaningful ROI.

At that point you just need to identify what things are worth spending on and why

That said, I really think that you need to come to terms with what you think and feel about money and establish a healthy relationship between saving and spending first before you try to educate your children.

Actions speak louder than words, and children will remember and copy your actions rather than do as you say.

[Paul]

I’ve had extended family members that were raised without these “negative neuroses,” and they were unable to stop bleeding cash during lean times, leading to nasty spirals.

Like most traits in life, your options aren’t “suffer, or don’t”, but “suffer, or suffer.” Not to glorify suffering, but perhaps to glorify intentional suffering to achieve one’s intended outcomes.

My parents essentially never penny pinched.

My sister’s and I have all learned independently to not do that because we see my dad still working at almost 70 despite wanting to hang up his hat years ago.

He lives a great life and is happy, don’t get me wrong, but it still changed how my siblings and I interact with money.

[Kristin]

Give them choices. I remember a preschool kiddo complaining they never took vacations anymore to exciting places.

The mom said to him- we can do those if I go back to work, would you rather have vacations or me home? He quickly said he wanted her home.

So, we can go to the state fair, but we are taking sandwiches and lemonade from home and can buy one treat each.

Things like that. They choose and understand you can’t do it all and can still have fun on a limited budget.

[Wilson]

Disclaimer: I’m not an expert in this area, and generally a hot mess single mom. Just like other aspects of life/adulting (household cleaning, cooking, medical care) I have tried to give my kids some ownership and involvement of that facet of our household.

I hope it has instilled a greater sense of empowerment than a scarcity mindset.

Around age 10-16, I have them periodically work through our household budget with me, educating them along the way without “preaching” at them. When they were younger it was on a smaller scale.

Ex: our only vacation was going to family camp each year. They wanted to have money for the craft shop and treats.

They had to earn it by holding a lemonade stand and garage sale getting rid of their old things. Earning their own money even at age 5 is great.

We are Christian so we talked about saving 10% for church, some for the future, and spending the rest at camp.

But I left that decision completely up to them.

[Amanda]

As someone who grew up with the negative neuroses and scarcity mindset drilled into my upbringing, I will say kudos to you for thinking about this.

I am fortunate to have for the most part overcome it, but it still does creep in from time to time and I struggle with it.

For my own family now that I am a mother and we also intentionally live on one income, I present it to my young children more of as a choice.

For example last night we took our kids to the local family friendly quarter horse races, and my son wanted dinner there.

We told him he could either have dinner at the track or he could have dinner at home and then go for ice cream after dinner.

He chose the ice cream. It’s been a good mindset for us, so rather than saying ‘we can’t afford xyz’ giving him options to still be able to enjoy things and yet learn trade-offs of choices

[Ellen]

I didn’t. I was raised by a depression era CPA who taught me to save every penny. I was pretty frank with my kids about our finances but modeled that same scarcity mindset.

Just something to consider — I started using YNAB a couple of years ago and it has transformed my relationship with money.

I’m now able to spend “freely” within my plan, my needs are covered and when I spend on “wants” I feel confident and guilt free.

If I had been using YNAB back in the day I would have been able to teach/model a healthier set of money behaviors.

(I’m no way affiliated with the company, but I do love love love them!)

[Laura]

I always say “let’s work to be able to do that” and never ever use the words “we can’t afford.” Sometimes I also say “we are using money towards this right now, sometimes when we budget we decide how to best allocate our funds.”

My son is 10 and has his own little crystal stand… he uses it to sell rocks to buy ice cream from the ice cream truck. He is a great saver. He works hard.

I think kids don’t necessarily need everything, but teaching them abundance vs poverty mentality is everything.

[Sarah]

I have tried to change my words from “we don’t have money for xyz” to “we choose to spend our money on x, therefore we won’t be getting y today”.

It’s subtle, but hopefully they learn they can have anything they want, but not everything.

[Stacey]

Really small…. “Not today”
Then my kid started saying, “not today but another day can we ___”
As they got older, “we chose to spend our money another way”
But overall we were just very open about money on a level they could understand.

We never used words like, “we don’t have enough money”, “we can’t afford that” as we did not want to create stress

We tried to focus on, we have what we need, and a few extras, so we need to choose the extras carefully

[Wendy]

I have no idea. But for my own kid, I often talk about money choices (not the stressors, just the trade offs) and point out what we do differently and why.

For example, we have dependable older cars, not shiny new ones. We spend money on trips (experiences) but very little on “stuff”.

Experiences are more valuable to us than things. We save aggressively and review our finances regularly.

We only spend money we’ve saved (the only debt is a mortgage, but we did pay half down when we bought, so our mortgage isn’t high).

I am completely transparent about all of this with my daughter, and now that she’s about to go to college, she’s created HERSELF a budget and seems to be mostly getting it.

[Margot]

Food clothes cars homes all are so overpriced in relation to todays income levels so unfortunately it is true that our standard of living is lower than our parents

We need to be resourceful and enjoy things like planting our own food and making our own desserts…

It’s also strange that we have a culture of celebrating things weekly… historically celebrations were special because they were infrequent

[Malini]

We present everything as an option and trade. We remind our kiddo that we can do anything we want, but not EVERYTHING we want.

For our family, our big thing to spend money on is travel (although we spend a fraction of the actual cost since we use points and miles) but when she asks for certain things, we present it as an option.

Yes, we can do a fancy bday party with all your friends, but it’s the same as going to NYC for a long weekend and we can’t do both.

Yes, we can go out to dinner more often, but then we’re not saving as much for our Disney trip – so maybe it will take an extra year or two before we can go on the next one.

I grew up with a single, immigrant mom and I remember being too scared to ever ask for anything I wanted. I don’t want my kid to think like that.

Ask for what you want, let’s talk about it, can we we make it fit? If not, is it important enough to give up something else?

These are the lessons I want her to take forward

[Chelsea]

When my kids say “we can’t get that because we can’t afford it” (it’s usually something they impulsively pick up off a shelf at the store) I correct them and say “we can afford it, we just choose to save our money for something else, like family vacations”

[Ryan]

For me, it was about teaching my kid self control. She was so used to hearing me say no to the dumb crap that she saw on the way out of stores that she stopped asking.

Instead, we would shop with intent and I’d say yes to basically everything and then we would get a treat.

I’m not saying it was perfect because my kid is pretty frugal, but she does spend money on certain things she cares about.

[Author]

Posts