In the real world, you can be staggeringly eloquent about fiscal responsibility and tell spellbinding stories about money, and your child may not hear a word you say. As much as you may want to talk about money issues, your children may not be prepared to listen. As a result, parents must be alert for those moments when their kids are open-eared and open-minded when it comes to financial subjects. As I noted earlier in my column about floor time, if you let them lead the discussion during floor time, they may well broach this subject themselves.
Smaller children especially are curious about everything, including money. Think back to when you were growing up. Did you wonder how much money your parents had, what your house cost, and how much your father or mother made each year? Your curiosity caused you to articulate these questions, and when you did, you created a teachable moment. This is your window to communicate the information and the values you want to impart to your child.
Although there are many teachable moments, the following list of such moments will help you be aware of some of the more common ones:
- Your child is toddling around the house, picks up a coin on the floor, and asks, “What’s this?”
- You’re at a store (often a toy store or grocery store), and your child points at something and asks, “How much does this cost?”
- You and your spouse are debating a money issue, and your child asks what you’re talking about.
- Your child asks you if you’re rich.
- Your child’s friend receives an expensive gift, your child wants the same thing, and you want to say “no” because you consider it too expensive or inappropriate.
- You tell your child she is going to receive an allowance (or your child asks for a raise in that allowance).
- You drive through a dilapidated neighborhood, and your child asks, “Are these people poor?”
- You open a checking account for your child, or give him a few shares of stock (or some other investment vehicle).
- Your child asks for something relatively expensive, and you explain that he has to earn it.
- You lose your job or make some other major life change and have to or want to downshift your lifestyle as a result.
- Your child asks what he can do to help those less fortunate than himself.
- You pass someone on the street asking for a handout.
You can also create teachable moments on your own. For instance, if you are taking the family to Disney World, let the teenagers help figure out the budget. Younger children might lack the skills for budgeting, but they can be given the opportunity to help make decisions after the budget is completed. Give them a fixed dollar amount to spend during the day, and don’t bail them out if they lack sufficient funds for one more soft drink or ride.
Expect your child to make mistakes, and recognize that these mistakes provide prime teachable moments. For instance, we had taken our twelve-year-old son with us to San Francisco and were staying in one of the city’s finest hotels. We had given him permission to order breakfast from room service. When we were checking out and received the bill, we noticed an $18 laundry charge. Because we hadn’t sent anything out to be cleaned, we asked our son if he had done so. He explained his T-shirts were dirty and he had decided the hotel service could wash them. We made it clear to him that this wasn’t acceptable; ordering meals from room service was OK, but it wasn’t financially prudent to have $5 worth of T-shirts cleaned for $18. He understood that we weren’t upset about the money but about the waste of money on an unnecessary extravagance. Because we dealt with the problem immediately and when he was most receptive to what we had to say, it helped him to learn to distinguish between reasonable and unreasonable spending.
Eileen and Jon Gallo are the authors of Silver Spoon Kids: How Successful Parents Raise Responsible Children (McGraw-Hill/Contemporary 2001) and The Financially Intelligent Parent: 8 Steps To Raising Successful, Generous, Responsible Children (Penguin USA/New American Library 2005). Their website is www.galloconsulting.com. Portions of this material have been adapted from their books.
