A Tale of Two Kids: Share Your Personal Money Lessons With Your Child

I travel a lot, and on a recent flight, I struck up a conversation with a father seated next to me. When he learned I host MoneyTrack, a TV show on PBS about empowering people to take control of their investments and manage money better, the first thing he did was start listing the bad money habits of his daughter, who was in her first year away at college.

Tempted by a thousand new ways to spend—decorating her dorm room, a new Macbook Air, new outfits, concerts, sports equipment -- of course she overdrew her checking, made a mess of her credit and fell behind on her essential bills. He complained she needed to be bailed out yet again and had absolutely no concept of how to write a check, let alone balance her checking account.

My exasperated seatmate ranted on about how could she be that clueless in college?


He asked my advice on where to turn for help teaching her better money habits. When I asked if he had a credit card, he said of course. Then I asked if he'd shared much of his own life wisdom about money—you know, the good, the bad and the ugly—with her. His answer was a bewildered “uh—I thought she'd learn this in school.”

The reality is that kids learn their money behavior from their parents, even more than in a classroom setting. Both by the examples we set and the conscious efforts we make to share these practical life skills. these are important lessons. This is where our kids learn to budget, handle credit cards, save and invest. Parents don't need to be experts, they just need to share what they do know.

Now contrast the well-to-do father I met on the plane with April Williams, a single mom who had struggled with money issues her whole life. April openly shared her own painful lessons about money with her teenage son. The outcome for her son, Chicago teen Damon Williams , could be just the inspiration you need to have the big ‘money talk’ with your own kids.

When Damon was in middle school he bugged his mom to buy him some expensive Nikes, she talked to him about saving and spending and the power of investing. She told him instead of just buying these expensive shoes, he had to save up and buy at least one share of stock in Nike before he could get the shoes. That lesson was to think about owning a piece of the business, not just the product. This concept prompted Damon to get excited about investing. Before his fifteenth birthday, Damon Williams had an impressive investment portfolio worth almost $50,000. Damon is proof that kids with basic math skills can grasp the fundamentals of investing.

While parents assume kids are learning some personal finance lessons in school, the reality is that right now, only 17 states require students to study personal finance in order to graduate from high school. That's according to a survey by the Council for Economic Education. Practical, real life lessons that come straight from you are the gift that will truly keep on giving.

Imagine how much grief you can save your kid (and yourself) if he or she actually knew a little something about money by college.


The good news is that it’s never too early or late to start. Okay, maybe you don’t think you’re the best role model for money behavior. Just like April Williams, you may have made too many money mistakes in your own life to be a good role model. But with open, honest conversations, your problems will serve as a powerful lesson for your son or daughter. Pass along your experiences – the good, bad and ugly.

In fact, if your child has watched you struggle with debt, foreclosure, impulse shopping, the loss of a job or other financial worries, he or she may be especially receptive to your message that it’s important to learn some different habits.

For those who are managing money well, you aren’t doing your child any favors by protecting them from financial realities. Of course, you don’t want to burden them with excessive anxiety about the roof over their heads. But talking openly about your spending and saving choices and how much you spend each month in major categories will give them an important context.

There are so many great resources available to help you. One of my favorite organizations is Jump$tart , which is dedicated to improving youth financial literacy. (Full disclosure: I sit on the board of the California chapter.)

Money as You Grow is another great site dedicated to teaching kids the top 20 things they need to know, age by age, to live financially smart lives. In addition, here is a comprehensive list of resources for educating children about money compiled by Mint.com.

As you ponder whether to tackle the topic of money management with your child, ask yourself this question: Who would you rather be -- the anguished parent trying to do damage control on a teen’s runaway debt or the one who can rest easy knowing her child is going into the world with savings in the bank?