Direct Conversations and Lessons

While direct conversations and lessons have a place in the arena of teaching kids about money, I would encourage anyone reading this to choose their direct lessons carefully, use them sparingly, and make sure they line up well with the modeling and experiential lessons you are creating for your kids.

In many ways this is the easiest of the types of lessons to deliver. You think about what you want your kids to know, and you tell them, clearly, directly, and with as little room for misunderstanding as possible. And then you tell them again… and really, if it’s important enough, you make it a bit of a constant refrain in their childhood.

The tricky part is that because direct instruction asks the least of parents, caregivers, and teachers, this tactic tends to be overused, resulting in poor outcomes. It’s not that telling, in and of itself, is a problematic way to teach something, but if we over rely on telling, versus modeling and allowing kids to experience things for themselves, kids get bored with what we have to say and simply stop listening.  

So, this post is not really about how to deliver a direct instruction lesson or conversation to your kids, it’s more about how to differentiate and narrow down the specific things you want kids to learn this way. Given that kids have a limited capacity to take our word for things, we want to choose these lessons wisely. And there are a few ways to narrow down the types of lessons that make the cut:

Severity of Consequence

Back in the first post on this topic, when I discussed money as a tool, I metaphorically referenced the difference between making a mistake with a saw that required buying more material and a mistake that resulted in losing a finger. The first type of mistake is best learned through experience because the experience of making mistakes builds stronger lessons. Mistakes are powerful teachers, and we need to give kids as much access to them as we can. But some types of mistakes, like cutting off your finger with a saw, are best to avoid altogether. The severity of consequence merits setting a clear expectation of how to use the saw, and where to keep your hands so they are safe from the blade.

Direct lessons and repeated conversations are best saved for things that are so painful or problematic to learn by experience that it would be preferable for kids to have clear warnings and opportunities to avoid them. These things are worth talking about and they are worth repeating.

The reason it’s important to differentiate is that you want your kids to understand the difference between racking up $20,000 in high interest credit card debt and purchasing something for $20 with their own money that was impulsive and causes some feelings of regret. It’s appropriate to warn them about the first scenario, it’s better to just let them experience the second.

If we choose to tell our kids to avoid, rather than let our kids experience the regrettable purchase, we lose two things. First, the lesson from the $20 purchase never gets to implant more deeply in that experiential learning tier, and without it, there are likely to be more regrettable purchases for bigger dollar amounts in the future. You’ve robbed your kids of a great learning opportunity with moderate and natural consequences.   

Second, you risk that your warning about a small frivolous regrettable purchase sounds the same as your warning about taking on a bunch of high interest credit card debt. This not only gives it the potential to get easily lost in the mix of everything else you’ve told them, it also means when they finally get the chance to experience that small, regrettable but affordable purchase and realize it wasn’t so bad, they may question whether you’ve been overexaggerating the severity of high interest credit card debt all along. If you want your kids to take the advice you give them seriously, it’s best to make sure what you’re advising merits that level of seriousness.

Alignment with Lessons Learned through Modeling and Experience

Even with repeated direct lessons about how to avoid catastrophic financial mistakes, it doesn’t necessarily mean they’re entirely preventable. I mentioned in another post that I have heard a lot of adults complain that no one ever told them a certain piece of financial advice that they feel they learned too late. But in many cases, I would posit that someone probably did, they just didn’t really listen. People tell us things all the time – good advice, bad advice, completely unremarkable things that we don’t have any reason to hold onto, and we only remember those things that we have a reason to internalize and a place to attach to in our brains.

So, I would hope by now, if you’ve read the 5 posts leading up to this one, that you would know better than to think that you can tell your kid one thing, show them another, and believe that what you say is going to stick. The reality is the best direct lessons are backed up and well supported by you modeling the behavior you are trying to teach and creating experiences that allow your kids to build an underlying understanding of why what you’re saying is important. If your direct lessons are an extension of those foundational lessons you’ve been modeling and allowing them to experience, then your kids will have a strong structural support to attach this advice to in their brains. Your advice doesn’t have to be remembered as a discrete piece of information because it can be easily worked into a more comprehensive understanding of money.

Procedural Things/Hoops to Jump Through

We should be honest about money, like everything else, some of it can be learned through a lens of core values and understanding, and some of it is just a thing we all must do or need to know about.

We must fill out a W4 when someone hires us. We need to file our taxes on time. We need to renew our car tabs every year. We need to pay our bills on time. And if we want a reasonable shot at retiring before we die, we need to be saving money for retirement early and regularly. It doesn’t really matter what our core values about money are, certain things just must be done, and unless you have a kid who is so naturally observant that they pick this stuff up just by watching, these things need to be taught.

They are also easy to miss. They seem so obvious and fundamental to our own lives that we may not realize kids could possibly not know how to do them. And, as with other direct lessons, these will stick better if there’s modeling along the way. If you let your kids sit with you while you pay bills or do your taxes each year, you’re helping them build an understanding of what they need to do when they grow up. If they’ve already experienced saving a certain percentage of their earned money as children, talking to them about saving for retirement when they get their first job will feel like a natural extension of their current understanding. But you’ll still probably need to take them through the basic procedural steps of doing it. They need to know when to do it, and how to do it, and it’s best not to assume that they’ve learned it all by watching you.

Conversations Led by Your Kids

To me, one of the most frustrating things about money is that we consider it impolite to discuss it, and therefore, we often shut down kids’ natural curiosities about it. Kids don’t think of money as inherently stressful, they often think of it as just something they want to know more about. They learn to be stressed about it from watching how adults behave with it, and they learn not to ask questions about it if they are constantly shut down or are told that their questions about it are impolite.

If kids’ natural curiosity about money is met repeatedly by parents who are uncomfortable or stressed or simply refuse to talk to them about money in an authentic way, the window of opportunity to help kids understand and want to engage with their money in a healthy way closes fast. And, although the advice we often want to give kids can seem like it goes in one ear and out the other, when kids directly ask us questions, we have a captive audience that is often willing to listen if we are willing to answer.

So, while it’s a good idea to keep your unsolicited direct instruction lessons to the most essential lessons you want to make sure kids learn with no level of uncertainty, don’t shy away from giving solicited input, information, and advice about money when kids directly ask for it. These conversations not only have a higher chance of sticking because they are led by kids, but they also build a routine with kids that lets them know you are a comfortable person to seek answers from when they have questions about money

In Conclusion

Since this is the end of a longer series of posts, I think it makes sense to do a short recap here of the essential components of really building strong money identities in kids.

  • 1

    It’s essential that you figure out the core value systems that you want to help your kids develop around money. This can include a list of specific things you want to make sure they learn, but they should all tie back to a few key grounding principles.

  • 2

    It’s critical to pay attention to who your kids are as individuals. They’ll each bring their own money personalities to the game, and what you teach them will be better and stronger if it tries to work with those individual currents rather than fighting against them.

  • 3

    Your kids are learning a lot just from watching you interact with money, so it’s critical that you model the types of money behaviors you want them to learn. If you’re constantly showing stress, fear, feelings of scarcity, or resentment of money, you’re teaching your kids to feel the same. And even if you have a healthy relationship with money, if you never give your kids a chance to watch you interact with it, make decisions about it, and have conversations about it, you’re robbing them of a critical opportunity to learn.

  • 4

    Beyond your modeling, kids need as many direct experiences with money as you can possibly create for them. Even when your kids are young, every time you are spending money on something that involves them or something they will benefit from, try to reframe it in a way that considers how you can give them more agency and experience dealing directly with money decisions. Look for ways to support them in earning money even from a young age and treat regular and consistent savings as an expectation rather than a choice.

  • 5

    Finally, yes, there are some things you just need to tell your kids about money. These things may be procedural in nature, or they may just be so important that you want to help them avoid a severe detrimental outcome that could come from making a bad decision even once. But learning by being told is the least impactful way to develop an understanding of something, and it shouldn’t be over relied upon. Choose these lessons wisely. The less you use this type of instruction, the more impactful it will be when you do, so save it for what matters most.

Portrait of Lorri DeFoor

Have any questions or want to schedule a call? 

Reach out to Lorri today!

Book with Lorri

Image attribution: Photo by Annie Spratt on Unsplash, Photo by Daniel Bernard on Unsplash, Image by LuckyLife11 from Pixabay.