Ellen Rogin is a speaker, author, entrepreneur and mother of two. These are her tips for talking to your kids about money.
Ellen Rogin has made it her life’s work to educate, counsel and guide people to grow their prosperity and use it as a force for good. She’s the co-author of “Picture Your Prosperity: Smart Money Moves to Turn Your Vision into Reality,” a New York Times best-seller, and she currently speaks across the globe about creating success and abundance.
As a former wealth advisor, Rogin has had clients who have ranged from high-net-worth families to her own daughter and son. Here, she shares advice for other parents who are wondering how and when to talk to their kids about money and finance.
Don’t wait until your kids go to college to talk about money.
Rogin says it’s never too early or too late to start a dialogue about finance with your kids. After all, children receive messages about money whether parents intend to send them or not. “Parents often aren’t aware of the messages that they’re sending,” she says. The conversation is never “on” or “off” — it’s ongoing, as kids observe their parents’ behaviours and language around money (not to mention messages from their friends and the media). As a result, she urges that you don’t put off the money talk until real-life demands like student loans, rent and bills become a reality. Instead, start talking about money with your kids today.
If giving your kids an allowance is an option, it can impart valuable money lessons.
Kids can learn fundamental money management concepts if they have the opportunity to manage money of their own. For many families, giving their kids a regular allowance is not financially realistic. But if an allowance is in the budget for your family, Rogin recommends using it as a financial learning tool. She and her husband started giving their kids allowances when they were in kindergarten. “We used it as a way to share our family values,” Rogin says. To demonstrate the different ways money can be used, they asked their children to divide their allowances three ways: a third for saving, a third for giving and a third for spending. At an early age, they were already earmarking their money for specific uses.
Whenever possible, show them how financial products actually work.
Financial products can be intimidating for kids when they’ve never been introduced to them. That’s why Rogin encourages parents to involve their children as they open and manage financial accounts. “The savings they had eventually gave us the opportunity to go to the bank with them,” she says. “I think there’s something really impactful about actually walking into a bank with your money and opening up an account so kids get a better sense of how that works.” As her kids got older and started making money through jobs like babysitting, Rogin and her husband helped them open Roth IRAs. As their children grew up, their kids could see the money accumulate in their accounts, which showed them the power of responsible saving.
Make sure the conversation is balanced in every way.
When kids are forming their perceptions of money, the person who is talking to them can be just as influential as what is being said. In a two-gender relationship, “both parents need to be involved in the discussion,” Rogin says. When parents share the conversation equally, it communicates that finance is not the domain of one gender and demonstrates the importance of equal partnership in financial matters. This balanced approach should also apply to your children, who should play a role in financial conversations no matter their age or gender. Encouraging questions and ideas from your kids can also prevent the discussion from feeling one-sided and keep it more engaging for everyone.
As her children have entered their early 20s, Rogin has enjoyed watching them grow into financially independent young adults. She hopes these tips for teaching kids about money will help more parents raise their youngsters to be financially confident throughout their lives.