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By Brett Gersack CFP®, AIF®, Wealth Advisor

I’ve been in the personal financial services industry for over two decades. As a CERTIFIED FINANCIAL PLANNERtm professional, I’ve helped countless families navigate their way through planning, saving and investing for their futures. So, when I decided to talk to my two children, Keira (8) and Chase (11), about money, I thought it was going to be a piece of cake. I was wrong!

I know the subject of money is hard for many people to discuss and can be uncomfortable sometimes especially with your kids. That is why I wanted to write a blog post to help other parents come up with strategies for having these conversations with your children and what worked for me.

No two kids have the same attitude towards money and you will see how very different my two kids are in how they view finances. Over the last year, holidays and birthdays have started to look very different for my son. Gone are the days where we could buy him Legos or the hottest new toy and he was happy. Now he’s much more focused on getting money so he can use it to purchase things like basketball shoes and video games. Don’t even get me started on how much money you can spend on video games to buy the latest new “skin” or “battle pass!” Chase’s idea of money is if you have it, spend it!

On the other hand, you have my daughter who still loves to get presents and can spend hours in her room playing with her toys and slime – what a mess! When she receives money from grandparents or relatives, she saves it in the little wallet I got her a few years ago and stashes it in her drawer. Keira is my little saver and does not like to spend her money.

Incentives matter

Since things were changing quickly, I thought it would be a good idea to talk to each of them about money.

I set up a time after dinner one night to start the discussion about money and finances. First, they were not happy we had to set up a family meeting to discuss money … boring! Second, this was interrupting their free time, so they wanted it to end quickly. I must admit, the first 15 minutes of the conversation was brutal. They were not paying attention and did not understand why we had to talk about money.

I told you this was going to be hard.

However, things turned around when I started talking to them about a weekly allowance if they did certain chores around the house. On top of that, I built in extra incentives that would allow them to get more money. This piqued their interest and they were ready to listen.

Our three buckets

I knew I needed to take a different approach to try to make talking about money “fun.” I let them know that they would receive every week the same dollar amount as their age ($8 for Keira and $11 for Chase) if they completed their chores. However, the next thing I said got them fully engaged in the process. I let them know that every week, when they get their allowance, they were to split it into three different buckets.

  • The first bucket was money they could spend right away with no stipulations (my son liked that!).
  • The second bucket was money they would save for at least a year. Any money that they set aside for this goal, I would match 50% (put in $5 and I will give you $2.50). As you probably guessed, my daughter really liked this option.
  • The third bucket of money was for giving. My wife and I have made it a point to talk to our kids about helping organizations that make the world a better place. They understand that these types of organizations need our help either through time or money. I let them know that any money that they set aside for charitable giving would be matched dollar for dollar – 100%.

At this point, they were all in. They were excited to start completing their chores and especially receiving their allowance every Friday.

Great outcomes

My intent in these discussions with my kids was to teach them about money and how it can be a powerful tool not only today but in the future. I believe this discussion helped them to start thinking about money and finances differently. They liked the fact that they could spend some of the money on things they wanted today.

In addition, by setting aside some of the funds for the long term and for charitable giving, they could grow this money for their futures – and for causes they care about. Also, by doing this exercise, I get to talk to my kids every week about their decisions on where they want their money to go. It was important for me to let them make their own decisions on how much would go into each bucket every week. This helps them think about the importance of money and the goals behind each bucket. This also gives us some precious one-on-one time every week, which is getting harder to come by these days.

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