The Secret to Having The Money Talk with your Kids!

Guest post by:  Lori Mackey

Money, Money, Money, it’s all over the news, and parents are asking: How do I teach my kids the value of Money? Its simple just have “The Money Talk” and not just once… it’s an on going subject that should be part of your daily routine. Then it becomes as natural as walking and talking. Kids love money and they are all ears to find out more about it. We have a survey that asks kids what their #1 question is with money, and the top 3 are how do I get, have and earn more!

Most parents say, they don’t like talking about it to their kids, some feel they would rather talk about other touchy subjects, mostly because; they have no idea how to start the conversation or what to say.

Below we have created several tips that will help you with “The Money Talk” and engage your kids in the wonderful world of money. This is probably one of the most important topics you can help your kids learn and get familiar with at a young age. The benefits of a financial education will create security, freedom and choices that will last lifetime.

Tip #1 – Start playing games with Money – Money is fun and when you incorporate games it makes the concepts of money stick in a child’s mind. The old saying…  Give a man a fish feed him for a day, teach a man to fish feed him for a lifetime. This applies to money as well. For the younger kids start with a “Money Scavenger Hunt”, you may even hide some money yourself to make the game more exciting. Have your child think of all the areas that money can hide – in drawers, behind the pillows, pants pockets and purses in the closet. Explain that money seeds are hiding all around the house. With each amount that is found their excitement will intensify. Once your children have found every last cent, have them sit down on the floor and separate all the pennies, nickels, dimes, and quarters.

Explain that money is like an apple tree. An apple seed doesn’t look like a tree or an apple, yet if properly nurtured, an apple seed can grow into a huge tree bearing many fruits that can feed you for a lifetime. Your money seeds work in much the same way. When you plant your money in the bank, and nurture it, it can grow and grow and grow! A dollar can turn into $10 and $10 can turn into $100 and so on.

Tip #2 – Creating Positive Habits Early. The habits you create on a daily basis will determine your success in life. If a child takes a dollar and spends a dollar, then the habit of living paycheck to paycheck has begun. But if a child learns to divide up their money into giving, investing, saving and spending, then a child is learning the habit of creating wealth. It all starts with a dollar.  I created the Money Mama Piggy Bank with four compartments so that a child could understand there is more to money then just spending it. When children feed each of the four piggies they start to understand the power of really saving money for other things, like your future, to help others and for security. Children want to know about money and they have the greatest gift of all which is time, and when you add small amounts of money to time it starts to compound and grow like you can’t imagine.

Tip #3 – Allowance and Spending Lessons made Easy. Allowance is key to teaching kids the value of money. It works best in teaching financial lessons when money is earned versus just given for no reason. When children earn money/allowance they are able to understand the value of it because they have worked for it. When a child then takes their earned money and buys the items they want with it, the sweat equity has much more meaning! Along with earning they are naturally learning how to manage their money, which over time will become a very valuable habit later in life.

Allowance is something that most kids ask for and enjoy earning. The simplest way to implement an allowance is to figure out how much you are currently spending on your child monthly for un-necessities.  Things like candy, toys and items they do not need to survive.  Then pick a list of chores or tasks that your child is NOT doing currently and assign an amount of money to each for completion.  This will serve two purposes; first it creates a positive habit that your child was not currently performing. Secondly, you are passing the buck so your child can spend their earned money instead of yours, for the same items you used to buy. Psychologically children will not spend their own money as easily as their parent’s money. So two things happen, your child learns to become responsible with creating positive habits and with managing their money.

Lori Mackey is an award-winning author, speaker, mother of 2 and founder of Prosperity4Kids, Inc. Her recently released Allowance Chart  “It’s Only a Dollar … Until You Add To It!” Makes earning money fun for kids and easy for parents!  Check out the full line of award-winning products at or call 888.550.5646

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