Two Conversations About Money

Here are two tips for helping your children build healthy paradigms about money:

1. Replace “We can’t afford it.”

This phrase (and the belief it expresses) sets up a paradigm of being powerless with regard to money. On the other hand, if you frame it as a choice, such as, “I’m not going to choose to spend my money on that today,” you take your power back.

Sometimes you actually can afford it, you simply don’t want to spend your hard-earned money on the trivial or useless thing your child is asking you to buy. If you say, “We can’t afford it,” you are wasting an opportunity to say something that proactively builds a better paradigm about the relationship between values and money. More on that in a bit …

Even if you truly cannot afford it, saying that over and over to your child builds a disempowered model in their head of your family’s relationship with money. It communicates that you are never in a position to afford it and probably never will be.

When children believe their family cannot and will not be able to afford things, they will likely believe the same about themselves. They will come to think their lack of money is a fixed trait and lose any hope of improving their financial situation or socioeconomic status.

Conversely, “I’m not going to choose to spend my money on that today” communicates that: 1) you have money to spend, 2) you are strategic about your financial choices, and 3) you prioritize certain items that you value over other items, like whatever item you are rejecting and do not value as much.

Framing it this way allows your children to consider what they value as well as how they might be savvy about the choices they make with money.

If your children have access to their own money, you can also say, “I’m not going to buy that, but if it is important to you, you can save your money [from allowance or birthdays] and buy it another time.”

2. Remind them of their past decisions.

Kids and adults alike can get sucked into the short-term high of making a purchase. The next time a child asks you to buy another necklace, gadget, or pair of shoes, remind them how little happiness the last necklace, gadget, or pair of shoes brought them. Say it kindly: After all, you can probably sympathize with their love of retail therapy.

Try something like, “I’m choosing not to spend my money on that today, and I think you’ll be okay with that decision in a couple of days, or maybe even minutes. Do you remember the necklace I bought for you at the fair? You wore it once, took it off, and put it in my purse, which is where it has been for the past few months. Remember that sometimes the things you’re desperate for in the moment, don’t actual make you happy for very long.”

Or, “I’m not going to buy that, but if it is important to you, you can save your money and buy it another time. However, I’m going to suggest that you decide against it, and the reason I’m making that suggestion is because you didn’t want that necklace until you saw it. It’s been my experience that spending money on things like this necklace isn’t as much fun as saving your money to spend it on a bigger item that you’ve wanted for a long time. Remember how happy you were when you saved enough for a new iPad?”

If you continue to give them gentle reminders of this, they are more likely to build healthy, long-terms paradigms about money that help them resist the temptation of impulse purchases.