We always want the best for our children. We always want them to have the things that we didn’t have when we were growing up. And while we may not do it intentionally, we all spoil our children in one way or another, and there comes a time when all children should be taught the value of a dollar.

As Jacoba Urist, Esq., Citibabes member and “The Happiest Parent” explains, you can start with something as small as being aware that your spending is setting an example for your children. Follow some of the tips from last week’s CitiScoop article “Saving Green by Going Green,” and explain to your children how the things you buy can affect your environment as well as your bank account. You can also work on explaining the difference between “needing” and “wanting” something. This is also a good practice for you as a parent to work on. Do you really “need” that afternoon cup of coffee or do you simply “want” it?

Remember that the topic of money and finances doesn’t have to be verboten in your family. Sharing stories and simple age-appropriate information with your children are some of the best ways to teach your little ones about money.  

-Tracey Frost Rensky, CEO and Co-founder, Citibabes

Well here we are, on the other side of all the holiday fun and festivities, and it’s back to life as normal. Or is it? For many of us January is the perfect opportunity for a fresh start – and what better time than right now, to start really teaching your children the value of a saving for the future, especially in today’s topsy-turvy climate.

Know how children will quickly mimic any slightly off-color word or funny phrase that slips out of your mouth? Well, the way you handle your finances makes an equally strong impression on them too, and it’s never too early to start raising your child to be a financially fluent, healthy and well-balanced teenager and young adult.

1. Spend Like You’re Setting An Example

Because, you are.

Your children may inherit your eyes, your laugh, even your fondness for techno music – but they’ll also get a lot of the hang-ups and unresolved issues you may have about money if you don’t get a handle on your spending now.

Every time you place too much emotional weight on something you pick up at a department store or order online, you’re teaching them how to be a happy person – and that a material good can fill an internal void. If you “have to have” a new dress for every wedding or event you attend, or constantly need the latest gadget every time something new hits the market or generally spend a lot of your energy and resources “redoing” and “upgrading,” they’ll get the message. Actions speak way louder than words, so show your children what a responsible relationship with money looks every time you whip out that wallet or talk about something you absolutely need.

Speaking of, if you want to raise a financially healthy and happy child you have to make sure they start understanding the difference between want and need, as soon as possible. Adults who have the most spending problems often have tremendous trouble separating the two, and no parent would ever want their grown-up son or daughter to be buried under credit card debt.

We have a toddler, Wilson, and we’ve already started drawing the distinction in concrete, real-time applications whenever we can. For example, last week on vacation, we explained that you might like an ice cream cone, Wilson, but we need to stop and fill up the tank right now or we will run out of gas.

2. Tell Good Stories

As soon as your children get a little older, I recommend telling meaningful stories about working and saving – the funnier or more detailed the better. Stay away from life lesson-type lectures about the value of a dollar (I even remember tuning out as soon as my mom or dad employed a certain tone about something). What did make a lasting impression: the stories my dad told us about arriving at his Yale dorm with only a small duffle while so many other students had cars full of new stuff, and how he no money for any of his required textbooks. He’d stay at the library until the last possible minute to use their copies for his reading – and all he wanted for his four children was the luxury of “fresh books” as he called them, so we could highlight with reckless abandon.

I won’t be able to tell Wilson the same stories (my father did provide each of us with “fresh books” and then some), but I can tell him about my numerous part-time jobs (or his father’s at Taco Bell and one super hot summer on the back of a Coca-Cola truck). We were both expected to earn a decent chunk of our “spending money” – a lesson that taught me what it really means to save up for something.  And stories about what a bad barista I was (I could never keep the decaf and caf straight!) or how many orders my husband messed up at the drive-thru are much more powerful ways to teach Wilson about money than periodic, formal sit-downs about what it means to work towards a financial goal.

3. Break the Big Taboo

Last but not least, don’t make money a taboo subject in your family. Talk about how much things cost. If you think a toy or a restaurant or a ski trip is too expensive, it’s okay to say so. Engage your children about money in a practical, honest, and age-appropriate way. We often have Wilson count out dollar bills or change with us to pay for small items when we’re out doing errands together. Money truly is a fact of life and the sooner a child develops an understanding of it in their daily routine, the more on track he or she will be for a healthy long-term relationship with their finances.

By Jacoba Urist, Esq., Citibabes Member, and “The Happiest Parent”