When talking with your children about money, do you think about what language you use? I recently had a thought, a simple fleeting thought. Well, more of a fleeting question. Does the language we use when speaking to our kids about money matters, matter? This was followed-up by, Do my kids think we’re poor? My kids are 2.5 and 4.5 years-old. I know, some of you may think this is really young to have any sort of financial conversation. And I would agree they are really too young to sit down and have a conversation discussing finances and why we do what we do. However, I know my daughter (the 4.5 year-old) is listening and absorbing all of our conversations.

I listened to my kids playing downstairs with their daddy while I put the dishes in the dishwasher and cleaned up the kitchen. Listening to my daughter talk excitedly, reminded me of several weeks ago I and her were shopping at Target. (On a side note, as a family we had just begun a stricter budget- cash only.) She saw a toy, I can’t remember what it was, and asked, in that same excited tone, if I could get it for her. It wasn’t overly expensive but I was running low on cash. My response was that it was too expensive right now. She then repeated it back and asked if it costs $50, it only cost $15 but I let her believe it was $50 since in her head that’s how much “too much” was.


As I was re-thinking this today, I began wondering what I’ve said about finances to her. I’ve used the “its too much” and many other versions of this. I’ve used “we don’t have the money for it”. And most recently, “wait and see what you’re getting for Christmas”. What do these things tell her? Do they portray to her that we live on a budget because we WANT to or because we HAVE to? Does it put any fear in her about our financial security?

A long time ago, I read an article about kids and financial perceptions. I don’t remember much about it, but what I do remember is that kids have perceptions and thoughts on financial stability of the family younger than I’d imagined. They have fear associated with their perceptions if they perceive insecurity. This most often was the case in families that were ACTUALLY in financial distress or a parent had lost a job. However, I couldn’t help but wonder if our recent change in financial philosophy could cause my children insecurity.

Our family is not in financial stress. We simply made the change to cut back on excess spending in order to increase our savings in hopes of moving next spring. We want to have a cushion that we’ve not had since the kids arrived. As a couple, my husband and I decided credit card spending increases those spontaneous buys (in the past I would have bought her the $15 dollar toy without a blink of the eye). Spending only cash keeps us on budget.

When I was growing up I knew from a very young age that we were poor. I knew that we didn’t have much food at the end of the month. I knew my mom looked forward to school returning in the fall because she wouldn’t have to worry about feeding us lunch. Even in elementary school I knew that I had to take care of my tennis shoes because if they got holes in them, I would most likely still be wearing them. Quite frankly, I worried about the finances.

I want to teach my children about finances and budgeting. I want them to learn that we should save up for things and only buy things when we truly have the money. These lessons will extend far into their adulthood and hopefully help set them up for financial intelligence. Most importantly, I want these lesson to be positive and not shed a negative light.

Which brings me back to, does the language we us matter? I say, yes. Words have specific connotations attached to them. Some words are negative and others are positive. Take the words Poor and Rich, which one seems more positive? Ok, so that’s obvious. What about the words poor and budget? What about the feelings associated phrases? Too expensive vs can’t afford it? What about can’t afford it vs not in the budget? Or Save for it vs too expensive? What really is a better way to phrase it? Personally, I need to think about it for a while to make sure I’m choosing a phrase that’s conveying what I really want my children to know.

Taking budgeting, saving, and financial health a step further, we have an activity to help our children learn about “saving up” for that desired toy. It’s not allowance per say. It’s the sticker system. Each child has a card with their name above a grid. They have specific activities that are age appropriate and promote positive behaviors. They then earn stickers by doing their assigned activities/behaviors. When the card is full, they get to trade it in for approximately a $10 toy (If it’s a few dollars over I don’t mind and if they are a couple of dollars under we don’t add up unless its $5 or less). If they want something more expensive, they save up cards. My daughter earns her stickers by 1) staying in her bed all night 2) getting dressed in the morning and recently added 3) not complaining about the food I’m serving. My son earns stickers by 1) peeing in the potty in the morning 2) staying in his bed all night and 3) not complaining about the food I’m serving.

I like this activity for multiple reasons. One, it helps curb some of the challenging behaviors we’ve had in our house. Two, it teaches them to save up for something 3) teaches them value in their things (after all, they worked hard!). They are so excited when they get to trade-in the card for something they’ve been waiting for. When they’ve got a card that’s not already dedicated to an item, it’s a lot of fun watching them pick something. This is especially true for my daughter, she weighs each item and looks at everything her card can buy. She puts thought in her purchases.

Do you talk with your kids on budgeting/finances? If so, what language do you use? Do you have a reward system similar to our card system?

Do you