Does your family have family meetings? What about family budget meetings? According to T.Rowe Price’s annual Parents, Kids, & Money survey, you probably don’t. In the 2016 survey, 71% of parents said they were reluctant to talk to their kids about money and 59% of parents said they only do it when the kids bring it up. The sad part is, these families could be missing a major opportunity to break the cycle of money stress and raise financially savvy kids.
Setting up a regular time to talk to your kids about money is incredibly valuable for their financial education. To kids, money equals being grown up. Seeing that you think they are old enough to have a say in the family budget, even if it is just how you will spend this month’s family fun money, will make them excited to learn.
Research has shown that most three-year-olds can understand the basics of money and that there is a marked increase in curiosity about money from ages 5-7. But since you aren’t going to hand your checkbook over to your six-year-old, how do you hold a successful family budget meeting?
Make it Fun!
Holding a family budget meeting isn’t about storming out of your office after opening yet another cell phone bill full of overages and demanding everyone sit down. That is discipline. This is education. To hold a successful budget meeting, you need to plan ahead of time to make it a fun, positive experience for your kids.
Choose a time where everyone is rested: Be sure to choose a time where everyone is awake and focused. If everyone is tired, they are more likely to bicker and start to view money discussions as a time of tension.
Give everyone a job: Create an environment where your kids feel like they are being included as one of the grown-ups. Your five-year-old can call the meeting to order, your middle schooler could be in charge of taking notes in a family budget binder (see the download below!), or your high-schooler could do the math. This meeting is for your kids as much as your wallet.
Don’t make it rushed: Our lives are busy but we can always make time for things that matter. Try not to squash your budget meetings in between breakfast and catching the school bus. No one will be focused and they’ll miss the lesson.
One of my favorite family budget meeting settings is a night where you will be having dinner at home. Make a special dessert that everyone loves, sit at the table, and discuss one money topic that matters to your kids and where they can actually help.
For families on the go, some of my brother and my best discussions with our parents happened in the car on the way to or from hockey games. Set aside 20 minutes in the car, that won’t be interrupted by rest stops, to have your meeting.
Have a Focused Topic
Unsurprisingly, your 9-year-old really doesn’t care if your water bill went up or down 10% this month. (Though he may be surprised water isn’t free.) What he will care about is that saving 10% on the water bill could mean an extra pizza night next month.
While you could use your budget meeting to catch up on allowance or other housekeeping topics, in general, I would keep things more focused. Decide on one thing you can talk about at your family budget meeting that would matter to your kids and that they could actually help with. The older they get, the more “real” these topics can become, but early on they will be focused on smaller things that have a more rewards based aspect.
Keep it age appropriate: There are a number of easy ways to get your kids involved in the family budget. Elementary school-aged kids could discuss ideas to best spend this month’s family entertainment/fun money budget. Middle school kids can help with planning for longer-term goals like saving for a vacation, day at the amusement park, or a new TV. High school kids are ready to discuss real bills, how their college money is invested, and your family’s debts. I have included potential topics for family budget meetings by age group in the Family Budget Toolkit, which you can download for free below!
Value Everyone’s Opinion
This is a meeting. A family money brainstorm. Budget meetings should be about finding ways to achieve this month’s goals, empowering your kids to think about money as a way to reflect values and celebrate wins from the prior month.
Give your kids the opportunity to think creatively about how to achieve your family goals. Their ideas may not be something you would usually do, but be open to letting them try. Usually, the best ideas come from people with a fresh set of eyes! Your kids don’t have your entrenched habits and biases so they might stumble upon something amazing.
When an idea from your kids is implausible, support their involvement, but then explain why it may not work. A common thought for young kids is that credit cards are just magic sources of money. If your child suggests just using your credit card to pay for a vacation or a trip to the movies, take that opportunity to explain how credit cards really work.
Always End With An Action Plan
You’ve committed the time, prepared a valuable and interesting topic, and started the discussion! Now don’t let your momentum die! End every budget meeting with a measurable goal that will help your kids check in on their success. Make sure every person in your family walks away feeling like they have some responsibility where they can add value. If your child is four or older, they can have a job. It may just be returning cans, coloring in the progress chart, or helping you find the cheapest cereal at the grocery store, but they can help!
Determine when your family will meet again to review progress. Half an hour once a month is six hours out of 8,760 hours a year. That 0.0007% of your time could mean the difference between raising kids who think critically and creatively about money, or kids who ask the same “why did no one teach me this?” questions you have had to ask yourself. Good luck!
Do you hold family budget meetings? If you do, what do you discuss? If you don’t, what makes you nervous about starting? Let me know!