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Kids and Finances - What Do You Tell Them?

I had a discussion with a friend a few months ago and we came to a point that we had to agree to disagree. We were discussing what you should tell your kids about your finances. This can be a sticky area for most families. I would like to tell you how I handle finances with my kids and what I do with them.

First of all, I will not lie to my kids about money. If I don't have the money, I certainly am not going to spend more on something for them. Most of the time it is a frivolous want, not a need, and they need to be told no anyway. I simply say that I do not have the money for that item right now, but if they want to spend their own money on the item, that is fine.

Some kids will spend their own money and some will show their true colors by not buying it. I want to send the message that it is not okay to spend my money on something that they would not spend their money on too.  As the kids get older, I have them start buying their clothes, accessories, etc. I will buy them things for their birthdays, holidays, major growth spurts, and beginning of the school year. I will also buy them their necessities, but for other things they want they must buy themselves. This teaches them to budget their own money for what they need and want. If they want to go out with friends, they must also pay their own way.

Secondly, I don't pay allowances. I will not pay my kids for working around the house. They live there too and can contribute to it's upkeep. I see a lot of parents paying allowances to kids for doing absolutely nothing and I don't like the lesson that teaches them. Kids need to understand that money is earned, not handed out freely.

However, I do help with the teenagers when they need to fill their gas tank. I only pay for a fill every 10-14 days because a tank should last them that long driving to school and back. If they go through more than that, they need to fill the tank themselves. Sometimes, the grandparents are generous enough to pay for a tankful, but we like to not take advantage of that.

Next, if we are going through a rough financial patch at our house, I will tell the kids. I will just say that money is really, really tight right now and we do not have room in the budget for anything extra. Trust me, they understand what I mean.

Some parents do not believe in telling their kids this. I do because I want them to understand what is going and why I may be a little stressed out. I also want them to understand that the household budget is the family's budget and we all need to be on board about what is going on. If we need to make cuts in the budget, I will include them in the decision making about what needs to be cut.

The kids need to understand this now so when they get older, they know what budgeting and sacrifice is. Sometimes we need to say no to ourselves so we can do what is necessary to live comfortably. I also think this teaches the kids to be creative at home and find solutions to wants without spending money.

My kids surprise me with the money decisions they make now and how frugal they can be. They also surprise me by what they spend their money on. I do give them some grace on spending decisions because they are still learning and mistakes will be made. Shoot, as an adult, I still make spending mistakes! I try not to, but they happen.

I hope this helps you in some way and if you have questions, please ask!

Thanks for reading,


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