How to Teach Your Kids to Be Good at Personal Finance Even If You Never Were

By Carmen Reinicke —

Many parents want to teach their children how to have a good relationship with money, but find they don't quite know how to do it, even though most say personal finance lessons are best taught at home.

83% of adults say parents should teach their children about personal finance, according to a CNBC + Acorns poll.

Even though they believe they should be the ones educating their kids about the ins and outs of personal finance,

The same survey revealed that only 15% of parents talk to their children about money once a week.

More than 30% said they never had a conversation about it with their children.

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"It's kind of like having a talk about the birds and the bees with your kids," said Alex Melkumian, a licensed marriage and family therapist and founder of the Center for Financial Psychology in Los Angeles.

but they are really

and can be meaningful if done the right way,” he noted.

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The therapist said parents need to understand that they may feel uncomfortable talking about money because it wasn't something they did at their age.

“This is something that they are going to reverse the cycle on, and the sooner they can start, the better,” he said.

start soon

Parents can talk about money with their children at an early age: as early

“Children need to learn from a very young age that money is not a concept that should scare them,” says Debra Kaplan, a therapist, author, and speaker based in Tucson, Arizona.

,” she added.

The way parents should communicate about money varies greatly depending on the age of the child, he said.

In the case of the most

At a young age, parents can include their children in budgeting and spending activities, such as grocery shopping.

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"We have to give them a context [of what money is] in a kid's version," Kaplan said.

That means explaining to them, in terms they understand, what it can be used for: it can be spent on things like food or toys for the kids, or saved for later.

These outings often offer opportunities to talk about money with children, for example, if they ask for a certain toy or food that is not in the budget or that you did not plan to buy that week.

That's the time when parents can start modeling healthy behaviors, according to Kaplan.

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Let's say, for example, you're grocery shopping and your 5-year-old asks for two different kinds of cookies.

You can say something like you can't afford both, or two kinds of cookies aren't in your budget, which your child probably won't understand.

Instead, Kaplan recommends acknowledging that the family likes to buy cookies, but pick one for this week and save the other for next week.

"That's how you start modeling moderation and strategic thinking," he says.

Have age-appropriate conversations

As your children get older, you can teach them more about the choices they have around money.

Mac Gardner, a certified financial planner based in Tampa, Florida, wrote a book called "The Four Bears of Money" to do just that.

He realized, with his own children and during his outreach activities with school children, that

.

Hardly any of the children knew that he could invest the money or donate it to help others in need.

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In his book, Gardner introduces kids to their four options for money with bears: the spending bear, the saving bear, the investing bear, and the giving bear.

"We wanted to make it as simple as possible," says Gardner, FinLit Tech's founder and director of education. "If we can at least provide our kids with those four basic functions, they can go out into the world," he added.

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It is also developing a game, called Berryville, that will help children put these financial ideas into practice in a fun way.

“If we can educate more children in underserved and neglected communities and teach them early what their options are and tell them stories about how to invest and give and not just spend and save, it would do some really amazing things in society,” he said.

Fix your relationship first

Parents who didn't grow up with much financial literacy or a strong relationship with money may need to spend some time educating themselves to make sure they're passing on healthy habits to their children.

“The first step is that they have to see what is missing in their own world so that they can model or teach their children in a healthier way,” Kaplan said.

"They have to be aware of their own behaviors and relationships and their emotional life with money."

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If you're anxious about money, it's important to address it so you don't teach your kids to be afraid of finances, too.

"When you don't have confidence in your own financial decisions, it's important to contain it," Melkumian said, adding that children are intuitive and pick up on their parents' stress around money even if they don't understand it.

There are plenty of resources for parents to learn more about personal finance, Gardner said.

He recommends that parents do their research before choosing one to ensure that it offers quality information.

Melkumian also said that learning about money can be something parents and children do together.

And, if parents have made mistakes with money, it can be healthy to be honest with their children about it and use it as a learning opportunity.

“Telling children the truth is very powerful,” Melkumian said.

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