Editorial Policy

Did your Parents Talk to You Enough about Money?

Kristin McGrath

May 10, 2013

Do you wish your parents had talked to you more about money? Kids today feel the same way.

A March 2013 T. Rowe Price survey asked kids between the ages of 8 and 14 which money topics they wish their parents talked more about. Bank accounts and credit cards topped the list, with 34 percent of kids wishing their parents were more open about these topics. Money management was a close second at 29 percent.

I must have been lucky. My parents were pretty hands-on when it came to molding my personal finance education. While I may not have been educated about those two topics by the time I was 14 (the survey’s cut-off age), I learned about both from my parents before I left high school.

I got my credit education when I was 18, when my dad generously co-signed a credit card for me. He taught me how to use it — and how not to use it. He explained that the card had a credit limit, and that I needed to check online (or call my bank) regularly to see how close I was to it. He also emphasized that, whenever I charged something, I was to make sure that there was enough in my checking account at the end of the month to pay it off. In other words, the credit card was a tool for building good credit — not an excuse to spend more. I admit I haven’t always been perfect when it comes to thinking ahead before swiping. But when I did load up my card for the occasional road trip, I felt a “What would Dad think?” pang of guilt — and my credit slip-ups have been minor and few.

I learned about banks and money management even earlier — this time from my mom. When I got my first job at 16, my mom asked me what I was going to do with my paychecks.

“Cash them?” I ventured. That’s what my friends did.

“We’re going to the bank tomorrow,” my mom responded.

We found a bank that passed on my way home from work and opened a checking account. Then we made a plan. Every payday, I’d stop at the bank, hand the teller my paycheck and get no more than $50 (the amount we calculated would be enough for lunch a few times a week and a reasonable amount of fun during the weekends) back in cash. The rest would remain in the bank until I needed it.

With Mother’s Day in mind, there’s another interesting finding in the survey: Kids tend to approach Mom (59 percent) — rather than Dad (38 percent) — with questions about money. Why the difference? The kids surveyed said Mom was more likely to be in charge of family finances than Dad.

Whichever parent kids approach for money advice, it’s important that parent knows what to say. Luckily, the personal finance blogosphere has plenty of tips for parents who aren’t sure how to become good money role models:

Make uncomfortable discussions fun:  Do you find it awkward talking about money? Having a serious, sit-down talk with your kids might be tough, then. Melissa Batai from the personal finance blog GoGirl Finance suggests breaking out the board games. Monopoly and Life both have money-management elements and can help you segue into conversations about why it’s important to have money for emergencies — and why it’s important to save up for the big purchases that could help you win the game.

Go to the bank: In a guest post on the blog Money Saving Mom, blogger and author Grace Pamer recommends setting kids up with a bank account as early as third or fourth grade. Because banks don’t provide the visual reward that a full piggybank does, it’s vital for parents to get kids accustomed to and comfortable with financial institutions.

Use training wheels when it comes to introducing plastic: Jason, founder of the blog Frugal Dad, has an aged-based lesson plan for teaching kids about money. In it, he recommends easing kids into plastic by getting them a debit card by the time they’re 16. This establishes the connection between plastic and the “real” money that resides in the bank account –without forcing parents to tie their credit to their children’s via a co-signing or authorized user arrangement.

Make them save: When teens get their first jobs, setting money aside may not be their first instinct. Even teens who start working in high school often begin their adult lives with no savings. Justin, founder of the blog The Frugal Path suggests charging your teens a small amount of “rent” once they’ve gotten their first jobs but are still living under your roof. Save that money on their behalf. Then give it to them when they leave home. Forcing teens to live on less than they earn and then presenting them with all that money when they really need it will, hopefully, reinforce the value of saving.

Which valuable money lessons did your parents teach you? And which ones do you wish they’d taught you?