Child's play: Talking to kids about money isn't easy; just ask the parents

03/18/14 by Rennie Detore

Remember the old brain on drugs commercial from the 1980s, the one that depicts an egg as your brain being fried symbolically inside a pan to show the effects of drug use.
The final sentiment of that ad asks: Any questions?
Yes, here's one: Where are the television commercials or pubic service announcements that ask parents if they've had that same forthright and honest conversation with kids about handling, saving, spending and truly understanding money, and grasping the gravity of a solid financial future.

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As much as that may sound like exaggeration to lump drug use and money into the same realm of conversation, a recent study suggested that parents fret more about discussing money and budgeting with their children than they do drugs.
Grant Cardone is 55 years old and is a self made millionaire. He's a sought after and lauded speaker, entrepreneur who created web based sales training that is utilized by Fortune 500 companies and is a New York Times best selling author.
More important, Cardone is a father of two daughters, and uses money and work ethic as driving motivators within his own household. The same can't be said for other parents, most likely due to their lack of confidence when it comes to money.
"Parents simply are confused about money; is it good, is it bad, should I have it or not," Cardone said.
Rachel Cruze is a communicator, presenter and co author of the upcoming April 22 book "Smart Money Smart Kids," alongside her dad, Dave Ramsey. She's taken the knowledge bestowed upon her from her father, a renowned financial guru, and, much like Cardone, used it to cultivate children to think wisely about money, in addition to working with young adults and students to help them stay out of debt.
She, too, agrees that parents who don't talk to kids about money probably don't know the first place to start.
"Parents are stressed about their own finances," Cruze said. "There is shame attached; 70% of American live pay to pay. Of course, they'd be stressed."
The one caveat in this entire communication breakdown between parents not talking to their kids about money are the parents themselves. After much deliberation, analysis and discussion, the same message still can't be ignored.
Parents who don't have a grasp on their own finances certainly aren't going to impart wisdom on their kids. Simply put, there's no budgeting or financial intelligence within the household, so who exactly is going to deliver the sound, sane advice that the kids desperately are going to need?
Moms who struggle balancing a budget or dads that spend frivolously on hot tubs for the deck or speed boats for the fishing trip probably should steer clear of their kids when it comes to thoroughly and correctly communicating the value of a dollar.
The staggering realization that parents are unequipped to talk money doesn't sound all that inane or odd when you consider the glaring deficiencies with their own money management. Another self perceived roadblock from mom and dad is the age of their children, as they assume chatting about money isn't something they need to concern themselves with until the kids get older.
But realistically why shouldn't kids at even the youngest of ages be exposed to the ins and outs of money, how it works and the repercussions associated with not using or spending it correctly?
"The first excuse parents use is that they're too young," Cardone said.
He explains, using his own at home technique, why slacking off when it comes to kids and money doesn't bode well.
"I was taking my one year old to the grocery store every day, and she's attracted to candy. Every time I show her candy, she smells it, but you can't have it cause of the sugar," he said.
"I would tell her the grams of sugar, and that it's not good for her. After two or three months, even though she's 1, she would then start to ask about the grams of sugar. I'm teaching her how to count, and about too much or too little of something," he explains.
"If she doesn't understand basic numbers, money isn't going to be any different. What I would tell people is to start assigning values to numbers, why is 10 more valuable as 1. It's about assigning value to everything at the earliest age," Cardone explains.
Keeping it uncomplicated when it comes to money is an underlying belief that parents should especially heed. No one is suggesting that they initiate an "Accounting 101" college level class per say, but why not at least broach the subject with simplicity in mind?
"The best advice I'd give parents is encouragement that your child is a clean slate. You can teach and talk to kids but don't make it complicated," Cruze said. "Saving and spending, they'll understand. Keep it simple, use every day items."
One of the older practices when it comes to kids is the allowance, which has transformed from a work produces money endeavor into a mutated form of simply handing over money to kids with no real explanation or emphasis on actually earning it.
"People give things without exchange too much; I think parents need to put an exchange on everything," Cardone said. "In life, I have to take a breath to get oxygen. I'm not entitled. And, we take it (money) for granted. If parents would simply let the kids earn, everything would be different."
Cruze takes a unique approach to allowance, giving it an overhaul that makes it a little more modern but still stays true to the roots of the principle.
"Teach kids that money comes from work; put kids on a commission. Associate work with money," she said. "As they get older, chores increase. Split that allowance in jars, one for spending and saving. It's a form of teaching budgeting."
Cruze adds "It's amazing how spending is fun and saving is hard. That doesn't change based on age."
And yet, parents rush to defend their lack of communication when it comes to money and kids by using age as a glorified scapegoat to masque their ineptness.
Instead, parents seem content in covering up their shortcomings and leaving the money speech on the proverbial back burner, and instead opt to talk about drugs, sex or anything else that is deemed pertinent and more paramount than dollars and cents.
Part of why parents can talk to kids about drugs more freely is the amount of rhetoric and marketing that is delivered through various ad campaigns and initiatives that deal directly in kids and drug use. In essence, the kids are inundated with not only teachers, principles and national spokespeople telling them how bad drugs are but also get that same message from mom and dad.
And money often carries with it a stigma, too.
"I think people have a strong opinion about drugs than money. There are so many myths and shame about accumulation of money. You can' go out and say 'I'm rich;' that's frowned upon more than my kid is a drug addict. I think there is shame around accumulation of money," Cardone said.
The same type of awareness centering on drugs is sorely lacking when it comes to money as it relates to kids. Unfortunately, no one is worrying about children picking up bad spending or investment habits and thus transforming from ignorant children that no little or nothing about money into adults that become equally devoid of financial smarts.
Perhaps rightfully, political figures, presidents, actors and anyone else that has a voice want to correctly warn children about drugs because that problem feels more immediate and dangerous than money and how it relates to kids fully embodying how to use it.
That point is hard to argue, but that doesn't mean this has to be a case of choosing one over the other. This isn't an either or or a competition when it comes to ranking topics that take precedent. It's about not completely ignoring money, budgeting or financial acumen and not giving it the attention it deserves.
Especially when you consider the huge void of teaching money within the school system; changing that could easily serve as a much needed bridge that could assist parents in making money more of a priority.
"The schools aren't teaching about money, and some college kids don't know how to balance a checkbook," Cardone said. "I think colleges and business schools are strongly looking at what data can we give to give kids as options."
Granted, money won't supersede drug use as the speech of choice for kids, nor should it. And there probably won't be a visually stunning, impactful commercial or message that resonates with the masses and makes money and how kids are introduced to it as poignant.
But, at the very least, it belongs on the itinerary of parents and within the curriculum of schools.
And that begs the question: Why isn't it?

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