How to Make Money Management a Family Affair

by Millionaire Mommy Next Door on May 14, 2009

in How To Guide,Raising Money-Smart Kids

We are raised to believe that talking about money is rude, embarrassing or boastful. But where has this belief gotten us? Without open discussion, money management often becomes a mysterious and difficult task, causing strife in our lives and relationships.

Our children learn from our example. If we behave as though money management is painful, secretive or confusing, we thwart our child’s financial future. Is this what we want for our kid? Of course not. We all want our children to acquire the tools necessary to power their own future financial independence. Few high school students graduate with any formal personal finance instruction — children receive the majority of their financial literacy from their parents. Modeling healthy personal finance behaviors is THE key to raising money-savvy children. What are you teaching YOUR kids?

Involving the entire family in financial discussions has many benefits:

  • Money is a sore topic for many families. Open discussion benefits our family relationships.
  • When the entire family is on board, keeping to a budget becomes easy. The family shares a creative, problem-solving energy and everyone feels empowered.
  • Kids think “outside of the box” better than adults do. They will surprise you with their remarkable insights and ideas.
  • Teach your child to save and invest now and you’ll take full advantage of the astounding magic of compounding. To accumulate $1 million by age 65, a 5 year old child only needs a one time contribution of $9875 OR a monthly contribution of only $57! Click here to learn the details.
  • Learning about money can be fun when it’s a family project. Spend some of your family financial meetings playing educational money games. See my list of suggested games below.

So grab your family calendar and schedule a “Money Monday” or “Finance Friday” or whatever works for you and your family. Block out an hour each month. Choose a time that everyone is likely to be relaxed, well-fed and free from other distractions. Consider making this a festive occasion — serve homemade cookies, offer a contest with prizes, or hold your meeting in a tent pitched in your backyard.

What can you do during your family finance meetings? Here are a few suggestions:

1)   Make and review your Treasure Map.
2)   Review your values and priorities, particularly as they relate to money.
3)   Delegate financial tasks to each family member as appropriate: have your youngest sort receipts; one can pay bills; another can reconcile bank statements.
4)   Brainstorm ways to spend less. Avoid blame and guilt trips! Instead, have fun with the challenge: offer incentives and prizes.
5)   Play games that increase financial knowledge and skills. Here are a few suggestions to get you started:

6)   Employ your kids. Give them a wage and valuable work experience for doing extra work around the house. Discuss budgeting and assignment of income into various categories such as: 10% invest / 10% save / 10% charity / 70% spend.
7)   Brainstorm ways to increase your family income with an in-home business. I started my first business at age 12 — a petsitting and dog walking service. I learned valuable entrepreneurial skills, earned money and had fun.
8 )  Invite your child to shadow (observe) you at work.
9)   Invite a mentor or entrepreneur to dinner and conduct an interview. Learn from those you’d like to emulate.
10)  Discuss ways your family can give back to your community. Volunteering not only serves others, it offers your children valuable work experience.
11)  Read age-appropriate books together:

Related books about raising happy, money-savvy kids:
Kids and Money: Giving Them the Savvy to Succeed Financially
How to Raise Millionaire Children

How do you feel about sharing your personal income with your children? Do you have any other family-friendly books or games relating to personal finance that you’d recommend? Do your kids receive an allowance and if so, do they work to earn it?

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