Talking to Our Daughters and Sons about Personal Finance

Today is Take Our Daughters and Sons to Work Day! This day is partly about the fun children can have in seeing your workplace, but it is also a chance for them to think about the future. Money skills are part of that future. Whether or not you take your children to work today, think about talking to them about money and savings when you get home from work.

Here at the CFPB, parents who bring their kids to work will talk to them about what we do, and also about why we do it. We’re working for our families and for all American families. We want everyone to understand the prices, risks, and benefits of financial products so they can make the best decisions for their families.

Kids learn about money from their parents. One of the best ways to help our kids follow good financial practices as adults is to talk to them now. Consider:

• A recent survey shows that almost half of adults who closely monitor their finances say they learned about personal finance from their parents or at home.
• Peer influences are important for adolescents, but parents have a greater influence than peers in at least one area: money management.
• Adolescents who practice financial tasks modeled by their mothers tend to feel more financially prepared as adults.

Talking to kids about money can seem daunting. Their questions can get uncomfortably personal, but you can decide before you start the conversation if you want to tell them all the details or give an overview. You might want to give specific examples, such as why it is good to pay more than the minimum on your credit card bills or how you can save for a down payment on a family car. Or you can describe a financial trick or trap that is important not to fall into. Of course, what is appropriate depends on the age of your child and whether you’ve already started the conversation.

Money Management tipsheet from the FDIC
Here are five easy, direct ideas for teens like “Practice self-control” or “think ‘used’ instead of ‘new.’”

Talking to Kids

• “You Are Here” from the Federal Trade Commission
  “You Are Here” uses a familiar shopping mall setting to teach kids to be more savvy consumers.
• The Bureau of Public Debt’s kids site
  The Bureau of Public Debt (BPD) helps make the U.S. debt real to kids. Part of the site is devoted to how the government borrows money and what that money is used for. The site also offers videos and tools to help kids understand saving, including information about U.S. Treasury bonds.
• The U.S. Mint’s education page
  What better way for a young child to start saving than with coins? The U.S. Mint site offers puzzles and other interactive tools to help children understand coins and savings.

Most important of all, your conversation should be goal-oriented. Remember that saving money – at any age – is about planning for the future. Thinking about future family or personal expenses for your child will help both of you think about saving in a practical way. It also makes the outcome of saving that much more concrete.

My kids are adults now, so I couldn’t bring them to work with me today. But when they were kids, we had the same kinds of dinner table conversations that my parents had with my brother and I when we were kids: about the value of education, hard work, and savings. I remember my parents talking about saving to replace our car. We talked to our kids about that, and about how much more something costs if you put it on a credit card and carry a balance. I think those moments help to prepare children for their lives as adults. Please join us at the CFPB in sharing these kinds of conversations with your kids.