How to talk to your kids about money and build a legacy

If, like me, you've made mistakes with money then you'll want your children to avoid making those same errors. After all, if they get themselves in a mess...who's the first person they'll ask to bail them out!? Use this lock-down period to help educate your child, unfortunately there's lots about finances school fails to teach our young people.

Lot's of parents believe that their children shouldn't be involved in any conversations about money - after all they're young, they need to enjoy themselves and not stress - money is the adults domain and apart from the odd couple of dollars given to them to buy an ice-cream, they don't really need to stress about the bigger stuff, do they? The reality is talking about money with your kids needn't be stressful, it's actually beneficial for them. There's an article over at Childmind that suggests starting when children are in 2nd or 3rd grade. Make sure the conversation is age appropriate.

Here's our top 5 moneysavingkiwi tips to help your children learn about money and finances:

1. BE HONEST - If you've screwed up in the past or if you've even screwed up now, tell your kids. Why wouldn't you? They'll learn that everyone included their parents can make mistakes (and that's ok) and that when their parents make a mistake, they then go on to fix it. Also, if you've racked up a debt, then your kids will learn the dangers of getting into debt. Remember you're kids are unique but also you are unique. Personally, I wouldn't buy a new car even though I can afford it - well I'd get finance, however, for me I'd only buy a car I can pay cash for. So, when my son has pointed to a shiny new BMW in the car showroom, I've explained to him that I don't have the money for that at the moment and then we've quickly gone on my phone and worked out the amount the finance would cost in interest (more than the total value of our car!!). For millions of people, getting a car loan is normal. Pitch money mistakes at your own values. Everyone on some level has made mistakes, let your children know so they can learn the importance of action and consequence.

2. DELAY GRATIFICATION - ok, so all our circumstances are different on what we can and can't afford but one of the most valuable lessons we can teach our kids is to wait. This teaches patience, value and thinking. Hang on a minute - thinking? That doesn't seem to fit. Let me explain. A kid goes into the store, sees the first toy they like, grabs it and wants it. It's so important to them in that moment, it's as if the thing they've chosen will never ever ever be there again and now is the only time in the world that they can get the toy. Hang on a minute...teach you child to think and take their time. That doesn't mean you need to so "No" to every single purchase but you can tell your child, that on this occasion we haven't come for a toy but tell them to put it as a target on their reward chart and we could come back and get it (give a specific day/date). You're getting your child to slow down their thoughts, sure there may well be a meltdown and you're the world's worst parent in the moment but over time they will approach shopping and purchases different. Your child has learnt to wait and that you can't afford to buy impulse purchases on every trip.

Another good tip for delaying gratification for yourself is the rule of 24/48. This is where you see something that you weren't planning to buy - let's say a better pair of hair straighteners and instead of impulse buying it because the sale is ending soon, there's no time - you've got to get it now, quick, buy, buy, buy - you give yourself either a day or two and then ask yourself do you really want the purchase, is it really necessary? Probably not...

Say No To Retail Therapy You've had such a stressful week at work you deserve a treat don't you? Park that thought for a minute - just as you don't want to teach your kids that grabbing a Big Mac will cheer you up or reaching for the Gin bottle will cheer you up, you also don't want you to pass onto your kids that a shopping spree makes everything better. Your don't want your kids learning that consumerism makes the world alright. Think about it...if they learn these habits at a young age, what's going to happen when they get older? It won't take long for them to be blowing all their earnings on items they can't really afford - but their again they could always put it on a credit card, couldn't they!?

LABELS AND BRANDS Lot's of kids know the best brands, whether it be Adidas, Nike or even Gucci! The more expensive brands and labels are seen as status symbols for many of our young people. Did you know that lots of big companies are effectively employing children to be social influencers? Children with large social media presences are often targeted to model and promote labels to their audience (for the large part, other children).

As well as hitting your purse, the danger of buying just the famous brands are that your children may well reject none branded items and the clothing their wear could start to define who they are as a person.

Brands cost more, so show your children where else that money could go. Unless you've a bottomless put of money, then you have to make choices on where your money is spent - talk about this with your child. It's good for them to see that choices have to made.

STOP BUYING THEM V-BUCKS! For any of you unfortunate enough to have a kid that can't stop playing Fortnite, then you'll know how attractive the offer of better skins, weapons, etc, etc is in the game. Your child will do anything for V-BUCKS! But it will end up costing you a mini fortune. For those lucky parents who don't know, V-BUCKS have to be paid for with real money - they are in-game purchases. I don't mean to just pick on Fortnite as it applies to lots of games online now, Fifa in 2019 made $1.38 BILLION from it's online Ultimate Team (reported by

For parents who have already caved in and spent a fortune on these things, track back - all the payments will have been made by a card - and sit with your child to show how much has been spent - lot's of you will find that the cost of in-game purchases will add up to more than the cost of a new console! You're also teaching your children the danger of online purchases and how they can quickly add up to a small fortune.

These tips are just a short list of ways to help your kids understand about money. If you're on top of your money, you want your children to follow your good example. If you're not, let you're children learn together with you and go on a financial healing journey together. Then, you'll really be ready to build a legacy as your children will grow into financially healthy adults. Remember money doesn't buy happiness but it's harder to be happy when you're broke.

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