What Parents Should Teach Kids About Money
- Gregg Murset is a father of six and co-founder of Busy Kid, a financial app for families.
- He says parents need to teach their children the value of hard work and how to manage their money.
- This is Murset’s story, told to Kelly Burch.
This as-told-to essay is based on a conversation with Gregg Murset. It has been edited for length and clarity.
As a parent of six near-adult children, I can tell you that parenthood comes down to one essential goal: helping your children become productive people, so they can leave your home behind. This is based on two fundamental principles: teaching children to work and managing their money.
Of course, that comes after teaching moral essentials like kindness. By focusing on financial responsibility, you can orchestrate a successful launch for your kids rather than a failed launch.
I should know – four of my six children managed to steal the nest. I’m also a certified financial planner and co-founder of Busy Kid, a chore app that teaches families how to manage their money. As a father and financial professional, here’s what I wish more parents knew.
It’s good to be motivated by money
We live in a capitalist society. As adults we are driven by money – most of us wouldn’t show up to work if we weren’t getting paid. Yet many parents want their children to do chores without outside motivation. I say, put the money on the table and let that motivate your kids, not bully them.
To be productive adults, children are going to have to learn the work ethic. Chores are a natural starting point. If you’re averse to paying for all chores, set basic expectations like feeding the pets or taking out the trash. Pay for chores beyond that.
Teach money management
Children love money, but they want to earn it and spend it. This is why we have to teach the management or distribution of money. I believe in a three-part system, with saving, sharing, and spending categories. This way, children can have fun while learning to give and save.
Here’s the key: that money they earn has to mean something. So don’t put your hand in your pocket every time your child or teen asks you for $20. It’s easy to spend other people’s money. But when kids have to spend their own funds, that’s when the learning happens.
You don’t have to be perfect
Most parents are intimidated by teaching finance because they feel like they don’t know what they are doing. Don’t let that stop you. Instead, include your children in financial discussions.
The car is a great place to start as we spend a lot of time driving kids around. Instead of complaining about the price at the pump, talk to your kids about inflation. Share your car payment amount and how you should pay it each month. When you go out to eat, ask your child to calculate the tip.
These basic situations are perfect teaching opportunities. Over time, they will help your children think about money differently.