213. Why Your Kids Have No Idea How Money Actually Works

Money has become almost invisible. We tap a card, pay bills online, automate savings, and send money with our phones—but if our kids never see any of it happening, how are they supposed to learn how money actually works?

In this episode, I’m talking about why we need to show, not just tell, when teaching kids about money. I’ll share simple ways to make money tangible again, including letting kids help pay a bill, giving them a grocery budget to plan dinner, involving them in planning a trip, and letting them practice spending, saving, and giving with real cash.

The goal isn’t to make your kids responsible for adult financial problems. It’s to give them safe, hands-on practice while the mistakes are still cheap.

Your kids are already watching you. The question is: Can they actually see what you’re doing?

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Transcript

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0:00

Your kids don't need another lecture about money. They need to see it, touch it, practice with it, and learn how it works before the world makes them figure it out all on their own

Laura 0:12

You are listening to the Money and Legacy Podcast with Laura Sexton. I'm helping families pay off debt, grow wealth, and build a legacy without sacrificing what matters most. This is where money feels easy.

0:27

Hey, legacy builders. Today we are talking about one of my favorite parenting principles, show don't tell. Because when it comes to money, I think we spend a lot of time worrying about what we should say to our children. If you're anything like me, you're in the car and your mind is just running, and you're like, "Oh, I should tell them this, I should tell them that." Or something comes up in the moment, and you just spew out all of the words. Yeah, don't do that. That's no good. And I'm telling you this based on my own mistakes, right? We're worried about what we should teach them, what age we should start, how much is too much, And one of the biggest problems we have is that the way money works in our home has become almost completely invisible. We're not sitting at the kitchen table and writing checks anymore, and we don't necessarily hand cash over at the grocery store either. Giving is online, bills are online, savings online, investing's online. A lot of it's automated, and half the time our kids do not even see money changing hands. So if we want them to understand money, we have to be more intentional about making it visible. Our kids are growing up in a world where money is increasingly invisible. So what we have to do is we have to make it tangible. With children, they should be holding cash. This is not only a money lesson, it's also a very good math lesson, right? When it comes time to do fractions, let's use quarters. Look, you need four quarters to make a whole dollar. You need 10 dimes to make a whole dollar, and this is how these fractionally break down. When you grow up holding tangible money, this is a very easy thought process. However, when money is invisible, it becomes very hard. When I was a child, my parents would write checks, and I could see them doing this. I could see the bill box. The mail would come in, they'd put the bills in the bill box, and then they would spend a day writing checks when after they got paid. We don't see that anymore because everything's automated online. My Netflix subscription, automated online. My charitable giving, automated online. My mortgage payment, online. When are the kids ever seeing us taking time to pay for anything? They don't understand how much electricity costs, so they don't understand that they need to turn the lights off. There's a real-world connection to everything that we are spending our money on, and our kids are not able to see the money connection. So we have to show them. It used to be that we would pass an offering plate, and the kids would see it. The church that we went to in California, after COVID, that wasn't a thing anymore, and they had to stop doing it. And so it became, give online, use the silver boxes at the doors. There was never any watch what we're doing. However, the new church that we're at, we pass the plate, and people put money in it, and people see whether or not you're putting money in. I think there's something really good about that Nowadays, we tap a card, or even worse, even worse than tapping a card, we tap our phone. So there's nothing even different. Venmo, Apple Pay, to a child, it looks like money appears and disappears. And you know what? To us, it acts almost like that as well. If money is invisible, we have to intentionally make it visible Because if you don't, it becomes ones and zeros on a screen. You forget what it means, and your kids never learn what it means. And now, look, they don't need the full financial lecture. As much as I would love to give them one, it will go completely in one ear and out the other. They have to instead watch the process. So show them what a budget is. Let them see how you decide your priorities before you spend your money. This is going to be so good for them in so many different ways. It is not just about the money. The money touches all of the other pieces, and sometimes it's a limitation and sometimes it's an accelerant. So we have to be very thoughtful on how we're doing this. As you're showing them a budget and you're deciding your priorities, you need to explain why you are choosing to save some money and set it aside. You need to show them what a bill costs. Again, show them the electricity bill. Why don't you let your kids hit submit on a bill with you? So take something off of auto-draft, and let them make the payment with you. Show them what the groceries cost, and explain the trade-offs of we're choosing to do this instead of choosing to do that. So bringing the kids in and going, "Hey, this electric bill costs the same as three of your favorite video games." That'll make a light turn on for them, don't you think? When the kids are desperate for me to not work in the evenings, I always tell them, "Mommy's going to work so that I can pay for us to go to Disney World. I'm saying no to playing right now so that I can say yes to playing later." Show them the example of giving money away because generosity is important to your family. These are examples that are real-life examples, and it's not just going to tell them that money requires choices. You are letting them watch you make the choices in real time Now, parents sometimes confuse visibility with emotional responsibility. I don't want your kids solving your adult problems, and I don't want them to feel responsible for whether or not we're able to pay to keep the lights on, right? But they do need to understand the real-world connection to their decisions. They should not be deciding whether or not the family can afford groceries this week or if we're gonna be able to keep the water on. That's not what I mean here. But I do want them to see how normal household money works for you I did have one conversation with somebody one time, and they're like, "Well, I let my kids come and look at the budget, and they decided what we were spending our money on." That's not a thing. Your kids should not be deciding for you. I remember when I was young, and I really wanted a horse, and my mom was like, "Look, come over and, look at the budget, and if you can fit it in somewhere, we'll do it." I understand what she was saying, and I did not go over and look at the budget because at the time could not have cared less about a budget, did not understand what it was, and, wouldn't have mattered to me anyway. I would have cut off anything my parents wanted to do so that I could have a horse. Kids can't make those decisions But kids can be involved. Here's a distinct difference with the electricity bill. Showing them, "Here's what the electricity costs, and this is why we're turning lights off," is different from, "If you leave that light on, we're not gonna be able to pay the electric bill." Do you see how those are not the same things? We're not trying to burden them. We are involving them. We want them to have a part of this, because kids can participate without being the responsible party. And one of the real reasons that we leave kids out is because it is so much easier to do it ourselves. Your kids are going to ask you 400 questions, and over half of those are going to be why. This is a good thing. We want our kids to be curious. We want to allow them to come to us with questions, because we need to be their safe space. Let them ask the questions, and let it take a little bit longer. Will you be a little bit more tired at the end of the day? Yeah, probably, 'cause it will suck your energy out little by little, but you are going to be so happy that you allowed yourself to do that. Will the grocery trip take longer? Yeah, absolutely, and you might be like me and spend most of your trip going, "Get back over here," but that's okay. Let them be involved. They're not gonna understand everything immediately, and that's totally fine. You're already in the middle of getting the task done, so bring them along. Teaching while you're doing, yeah, that does feel inconvenient, but the more exposure they get now, the easier it becomes later. And the more you get to bring them in, and the more fun you get to have together. Sometimes we will choose our current comfort over future capability, 'cause it's easier just to leave them out today. But let me tell you, if you leave them out today, it will become much harder later when they're 18, 22, 30, and have never practiced handling money. A little inconvenience now can save them a lot of confusion later, and it will save you a lot of worry later, I promise. So let's get some low stakes practice in. This is where we're gonna make it fun. We're not gonna start by dumping the whole household budget in front of them, but we can give them something that they can own. I love a dinner challenge. Take your child one at a time and go to the grocery store and say, "Here's $30, you're planning dinner." they're gonna get to decide what meal you're having. They're gonna have to check prices. They're gonna have to do the math. They're going to have to make trade-offs, and they're gonna have to decide whether dessert fits in or not. For little kids, we're gonna help them with the math, and for older kids, we're just gonna let them run with it. I promise you that this will be so fun for them, and they are going to be so filled up. And I love the idea of saying, "Hey, you get to decide what we're having for dinner." Are you going to have the most healthy and nutritious meal? No, probably not. But you know what you are gonna have? A child with a little bit of independence who is so proud of themselves. I know some kids will go directly for the ice cream and try to make that the whole dinner, and I know some kids that will go, "Okay, I need a vegetable, I need a protein, I need a carb. You're gonna get to discover something new about your children. Enjoy the time and teach them in the process. We're showing, we're not telling. We're allowing them to be a part of it. Here's another fun activity. Plan a trip together. Have them choose somewhere they'd like to go, and then together figure out transportation, hotel, camping maybe, figure out food, tickets that are needed for anything. What kind of money are we budgeting for extras? A trip to Disney World and a camping trip are going to teach two very different lessons. Allow your children to have fun, keep it responsible, but allow them to learn and grow and explore. Our Girl Scout troop is doing this right now. Our girls are in fifth grade And they are planning a trip to Savannah, Georgia, which is the birthplace of Girl Scouts. My mother and I have been many times. My first time on an airplane was a trip from Texas to Savannah, Georgia. I fell in love with mocha frappuccinos while we were there. And I learned so much on this trip, but you know what else I did? I had to help make the budget. I had to earn the money to go. I had to decide what kind of- activities that we were gonna have while we were there. And then I had to make sure that we earned enough money to pay for those activities. In fifth grade, my girls are doing that now. Now, they have the added benefit of my mom and I have done this trip multiple times, so we really know what is a yes, what is a no, what we should steer them towards But we are letting them make the goal. We are letting them make the itinerary. We are letting them set the goal, and then we are going to let them earn the money to get there. We're doing all kinds of different entrepreneurial things so that they learn what does it mean to make money? What does it mean to spend money? How do we prioritize our money? Let your kids get involved with planning a trip. Do you have to go this year? No. Do you have to go ever? Not really, but once they plan it, they probably really wanna go Activity number three that I have for you today is a game called what would you save for? If there were something really big that you could buy for yourself one day, what would it be? Let them answer whatever it is that they feel like answering. Let them dream. Do not correct them because it is their dream. They are going to say something small. They may say something big they may shock you. It could be anything from a Lego set, a new bicycle, a computer, a car. Maybe your child wants an airplane or a spaceship, or maybe they're gonna come up with something cool and creative like a slide for the pool that you don't own yet. You get to learn something cool about them, and they get a safe place to dream. This is a win, win, win, my friends. The whole point of all three of these activities is that you are giving them practice while mistakes are cheap A mistake a ten-year-old makes with money is much less expensive for them and for you than a mistake that a twenty or thirty-year-old will make with money Hands-on money is still very important. For younger kids especially, physical money is incredibly useful If you are just learning how to manage money because you have had a problem with credit cards or you're in a lot of debt, I oftentimes will say, "Let's go to physical money," and here's why Physically seeing money disappear when something is purchased feels negative in your body. And you are going to start equating money with your hard work, and you are going to hold it in your hands and have to physically give it away. You have a different relationship with money when it is in your presence and then it is gone. When it is on a computer, it can sometimes feel like Monopoly money. So you need to have physical money. Now, for kids, it's really important on multiple different levels. One, they're understanding a one-to-one correlation. That's really great. I give commission to my kids in cash. Commission comes in cash. It's good for me as a mom. It's good for them as kids. Counting dollars is something they need to know how to do. Dividing money between spending, saving, giving, these are things they have to be doing. They need to have physical cash to see this is my spending money, this is my savings money, this is money I'm going to give away, either at church in an offering, to a charity, something like that. They should be doing all three of those things Physical money creates a tangible exchange between you and your children and between them and anything they want to purchase. And this is not a rejection of digital money. I'm not mad at it, but right now we're giving their brain something concrete to hold onto. So let them understand the physical version before ever expecting them to understand an invisible one, okay? This becomes a gateway to harder conversations. Once money is normal in your house, harder conversations become easy. We're not going to do four sports this season, guys. What? Why? Well, we're saving for something that matters more to our family right now That's not gonna be easy to tell your kids, "Hey, I'm so sorry. I know that before we've done four sports and, you know, in this season we're gonna have to pick one, we're gonna have to pick two, and we can't be running around doing all the things." That's a hard conversation. It really is. Telling your kids, "Hey, guys, we can't go do that today, but that doesn't mean not ever That's okay. It's okay to have these conversations. Telling your kids, "Hey, guys, we made some mistakes with money, so here's what we're gonna do next," bring them in on it. And if they have been part of small conversations all along, these things are not gonna be shocking conversations later. And you know what? Normalizing these little money conversations prepares them not only for big money conversations, but also big life conversations. I have a 10-year-old, and we are starting to get into middle school, and that's when some of these really hard, challenging conversations about bodies changing, about the opposite sex, about all kinds of things, friendships either coming or going, or sports, winning and losing. Like, there's so many big, hard things that are coming our way. But because we make money an easy conversation, and this is a hard thing, right? We are always open and honest in our family But because we've chosen to have these money conversations, where to me as an adult it feels hard because we didn't really talk about it growing up, my kids don't feel that. They don't feel like it's a taboo subject, and they don't feel like anything is a taboo subject. They wanna come to me and talk about, "Hey, I'm wrestling with my faith here," or, "I, I got in a fight with this person and I don't know why," or, "Mom, I'm so angry and I'm so sad, and I don't know why." Girl, I feel that once a month. I get you. Let's talk about it. This week, have an open conversation, because it's going to lead to so much more, and it's gonna make such a beautiful harmony in your home. And also, why don't you go ahead and choose one of those money experiences that I was talking about and make it hands-on? Not a lecture, an experience Give them a grocery budget. Let them plan dinner. Build a pretend vacation budget. Talk about something they would love to have one day. Let them help pay one bill. Show them where part of the family budget goes. Make the money visible, tangible, and safe to practice in your home. You don't have to know everything about money before you start teaching your kids, but if part of the reason you're hesitant is because you still feel unsure about your own finances, that is exactly where I can help. On a clarity call, we can look at what's going on with your money, where you feel stuck, what your next right step is. Because the more confident you become with your own money, the easier it becomes to show your kids how to handle theirs. Scroll down in the show notes, book your free clarity call, or go to my website, accelerateyourlegacy.com/claritycall. Your kids are already watching you. The question is whether they can actually see what you're doing. Show them. Let them participate. Let them ask questions. Let them make small mistakes. Because you want to show them how money works before the world makes them figure it out all on their own. Make it visible, make it tangible, and go out and make a difference