(The writer is a Reuters contributor. The opinions expressed
are his own.)
By Chris Taylor
NEW YORK Feb 7 Wondering why our kids are not
so great with money? Just look in the mirror; it's because
adults are often financial train wrecks themselves.
Even so, all is not lost. You can still try to instill your
children with the right lessons about spending, saving and
investing, to prime them for a more secure financial future.
That is the cause of personal finance guru Beth Kobliner,
whose new book "Make Your Kid a Money Genius (Even if You're
Not)" has just been released.
She spoke with Reuters about how to equip kids with money
Q: Is there a time in a child's life that is best for giving
them money lessons?
A: Start earlier than you think, because by age three they
start getting money concepts.
Keep your lessons age appropriate. Using anecdotes is
helpful, because we all like stories. Show them the numbers with
online calculators, and how savings and interest could one day
get them to a million dollars.
Q: You say that chores should not be tied to money and
allowances are not a great teaching tool. Why?
A: Tying things like making their bed to monetary rewards is
a problem. You are paying a child to do things they should be
doing anyways, and then they will start negotiating with you all
the time. It can end up backfiring for parents.
Allowances start with good intentions, but then people tend
to get busy and forget about them. I looked into the research,
which is all over the map - sometimes allowances help kids with
financial decision-making, and sometimes they don't.
What is very clear is that, whatever you choose, you need to
be consistent about it. Otherwise it sends the wrong money
Q: No one is perfect with money; is that why we are so
afraid to teach our kids about it?
A: It is a terrifying topic. That is essentially why I wrote
the book. It is a primer for parents as well, about basic things
like debt and delayed gratification and compound interest, so
they don't feel like they are giving kids the wrong information.
Q: What are the money topics we should not be discussing
about with our kids?
A: I don't think you need to talk about your salary, because
kids don't have any context for it, and won't really understand
it. They also might gossip about it at school.
You also don't need to point out who is the bigger
breadwinner, by saying things like 'Mommy makes twice as much as
And don't disclose how much is in your 401(k); either they
will think you are rich and can buy anything you want, or they
will worry that you are totally broke.
Q: Is social media putting added financial pressure on
families, by pretending that we all lead lives of luxury?
A: Absolutely. There is a constant barrage of Instagram
photos, seemingly saying: 'Look at the beautiful place I am,
look at the wonderful food I'm eating.' All of those things cost
money. That is why you need to start early by teaching them
about wants versus needs, and get into the habit of saying 'No.'
Q: How did your own parents shape the way you understand
A: My dad is 87 now, and growing up in the Bronx, his family
was in pretty bad shape. His father drank and couldn't hold a
job, his mother was overwhelmed, and he had siblings who slept
in drawers. So he used to go outside of his tenement building,
hang out by the pay phone, and answer the phone for people who
lived there. They would give him a nickel, and then he would
give it to his parents, so they would fight less. Because of
that, he always got how important money was.
Q: You have three kids of your own, so how is their
financial behavior shaping up?
A: Pretty good, because they have heard me talk about this
stuff their whole lives. What I tell other moms is: Make your
financial priorities clear, and your kids will pick up on it.
Just giving them more stuff is not going to make them any
happier. That is something I know for sure.
(Editing by Beth Pinsker and Bernadette Baum)