The money conversations you need to have with your kids


Raising children can be expensive. In 2018, the Australian Institute of Family Studies estimated it cost between $140 and $170 a week to raise a child - and it's probably more now due to increases in the cost of living.

Before you freak out and decide you can't afford children, know that many families excel at saving and investing. Also, having a family changes your perspective and priorities. I remember the money I wasted pre-kids on dining out, partying and travelling. While I have great memories, since having children, I've learnt to "adult" and be more frugal.

I love my children, I want to provide them with the best possible life and sometimes I want to treat them. I love seeing them smile. However, more isn't necessarily better and too much can lead to unhealthy co-dependent relationships (aka spoiling your kids).

how to talk to your kids about money

As outlined in the book The Millionaire Next Door, "economic outpatient care" can create a false sense of security and prevent kids learning how to manage their own money. Simply put, if you provide too much your kids can become overly reliant on you.

But depriving children isn't the answer and can be abusive (Cinderella style).

According to finance writer Noel Whittaker, parents should help their kids if they can - and if they're good kids. I agree. Rather than spoiling my kids with stuff, I like to focus on the more important things they need that will help them in the long run.

Find the right balance

So, how to balance providing for your kids to ensure they have the best possible start to life while still teaching them about how to prioritise needs over wants and save for their future?

When I was growing up, my mother, who came from a working-class family and made her own way in life, was big on ensuring we did not rely on handouts. If we wanted money, we had to earn it. Likewise, I don't seek to buy my kids happiness, but I will provide for them and help them achieve their goals.

I want my kids to be good money managers, and that starts by talking about how we spend money and why.

For example, when shopping, we discuss costs and weigh up wants versus needs. When they were little, I would get them to tell me what was a "want" or a "need" before putting items into the shopping trolley.

Shopping with kids is always more expensive due to the "tax" of including wants that aren't on the shopping list, but knowing what are wants helps reduce impulsive spending. I'm the parent and I'm comfortable saying no where necessary.

Value versus brand name

My boys know how to compare the unit cost of items to help make choices and know that generic products can be just as good as big brand names.

Understanding the value of the product versus the brand flows through to bigger purchases such as technology, where we look at specifications and reviews rather than brands or hype around a new release.

I let my kids manage how they spend and earn money. They get pocket money and earn extra dollars from recycling bottles and cans. I recently paid my youngest son to help me at a charity event (he did a great job).

If they have a big goal, we contribute half. My youngest son saved for a laptop and was so excited when it arrived. It meant more to him than if we just gave it to him.

When our eldest hits Year 11 in three years, we will give him an allowance to buy his clothes and he can decide what's cool - or not.

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Serina Bird is a proud frugalista who has amassed more than a million dollars through frugal living. She is the author of several books including The Joyful Frugalista and The Joyful Startup Guide. Serina blogs at The Joyful Frugalista, and her podcast is available on Spotify and Apple Podcasts. She is also the founder of The Joyful Business Club. Her new book, How To Pay Your Mortgage Off in 10 Years is out now!