For many of us, money seems like a grown-up topic that we can put off until our kids are, well, grown-ups.
When they see us arguing about money, we tell them it isn’t a big deal. When they ask for something, we try to get it for them—without mentioning how much it will cost. It’s easy to send messages that confuse our kids, but it doesn’t have to be this way.
In my work as president and C.E.O. of GreenStreet Commons, a company that makes educational money apps for kids, and as the author of 26 books on financial literacy, there are very few money mistakes I haven’t seen.
Below, read the stories of five families struggling with all-too-common kids’ money lessons … and how they can turn their mistakes around.
1. Trying to Keep Up With the Neighbors
Robin*, 42, mother of Kaylee, 15, and Maya, 12, New York City
Robin Says: My daughter, Kaylee, is turning 16 in a few months, so now is the time to plan her Sweet Sixteen party. She’s been to several parties already—very elaborate affairs. One party was held in a private room at the Museum of Modern Art, and another was held at her friend’s family’s summer home in the Hamptons. My daughter doesn’t want a party of her own, because she thinks those parties were more about the parents than the kids.
I’m afraid that her friends are going to ostracize her for being the only one not to have a party. I know it’s her choice, but I don’t want her to regret her decision later. I’m disappointed because I wanted our family and friends to see what a beautiful young woman she has become.
Neale Says: I think Robin’s worries are misplaced. Kaylee’s birthday should be about honoring her, not to impress anyone or show her daughter off to family and friends. I’m proud of her daughter for taking a stand. If her friends are true, they will not judge her for not having a party, and your family should already be aware of your daughter being a beautiful young woman, without putting her on display. If you really want to be financially smart about this, I suggest you put the money you would have spent on the party into Kaylee’s college fund.
2. Shielding Your Kids From Price Tags
Marko, 34, father of Jorge, 11, San Jose, Calif.
Marko says: Growing up, my parents never talked about money with us. When I asked for something—a new bike, for example—they never said, “We can’t afford it.” They always said, “You don’t need it,” or “What’s wrong with your old bike?”
When I went out on my own, I was overwhelmed at how much things like insurance, taxes and electricity cost. It made me appreciate my folks even more for what they gave us, but I wish they had explained things. Now my son is is 11, and when he wants a new bike, I want to explain how long I have to work to make that money—but my wife wants to shield him from money talk. I don’t want my kid to think I’m mean, but I also want him to be prepared to live on his own when the time comes.
Neale Says: Marko is right—shielding your child from the cost of things can keep him from getting a good start of his own when the time comes. Anything that involves money, and exchange of value, can be used as a learning tool. For instance, if he and his wife take their son out to dinner, they could show him the check and explain the tax and tip. Even for younger kids, looking at the check is a math lesson.