4 things we need to stop saying to kids about money (and what to say instead)

With many families struggling with the cost of living crisis over the last 12 months, it’s no wonder that we’re thinking more and more about how to talk to our kids about money to help them grow into financially literate and money-confident adults. And it can be difficult to gauge how much your children understand about money, so it’s worth asking them a few questions in an informal setting to get a sense of their comprehension - try these money questions that we put to some kids, and see how your child’s answers compare.

While there are some key lessons that all parents should teach their kids about money, sometimes it’s worth also being really mindful about phrases we might use when talking about money and the impact these can have on our children. 

Personal finance expert and author of children's book Get to Know Money, Kalpana Fitzpatrick, says: “Research shows children start forming money habits from as young as age seven and they will most likely pick these habits from their parents."

1. Avoid saying “We can’t afford that.”

Saying you can’t afford something, even if it’s true, can have negative connotations that even young kids will pick up on. If it’s something that friends or family members have, it can amplify feelings of inadequacy and even breed jealousy and resentment.

What to say instead

“We’ve not budgeted for that this month, but let’s add it to our wishlist."

This shows a responsible attitude to spending. By relating potential purchases back to your family’s budget, you can demonstrate to your child that you can have control over your family's money. It shows that you make sensible decisions about what your money should be used for and that all purchases are planned for and considered in advance. 

This can also be useful when highlighting the difference between needs and wants with your child. Needs come first, wants can be added to a wishlist. 

2.  Avoid saying “Money doesn’t grow on trees” 

This phrase can make children worry about there being a real scarcity of money in the world and lead to panicked feelings about not having enough. Longer term, this panic can lead to knee-jerk decisions that can prove risky to financial stability. 

What to say instead

“There is lots of money in the world and this is what you can do to earn as much as you need.” 

This positive language highlights opportunities for your child to have control over their financial future and help cultivate a healthy financial mindset. This can lead to conversations around what people can do to earn money and why it can be a sensible idea to save money when you can. 

Parenting brand Big Life Journal, that aims to help parents raise resilient, confident and independent children, agreed, saying in an Instagram post: “To raise financially savvy kids, it's important to have a positive attitude about money from the start. Your own upbringing has a significant impact on how you perceive money and teach your child about it.

"Using negative phrases like 'we can't afford it' and 'money doesn't grow on trees' can create a mindset of scarcity and fear in children. This can limit their ability to see opportunities and believe that they can create abundance in their lives."

3.  Avoid saying “Money doesn’t buy happiness” 

While this money cliche is true at its core - in that things like family, friends and health are in many ways more important than money, it ignores the fact that money is often the gateway to comfortable and healthy living and experiences, like travel or days out with those we love. 

What to say instead

“Money is good to have - here’s why.”

By phrasing it this way, you aren’t ignoring the impact that money can have opportunities and experiences in life, but you’re also cultivating a healthy attitude towards it. You can highlight why money is important to have, but that you don’t need to have all the money in the world in order to have a happy and fulfilling life.

4. Avoid saying nothing at all 

Even if you try to shield your child from any specific worries you might have about your own financial situation, they often pick up on more than you realise, whether they overhear conversations at home, see things on the news or hear friends talking at school. So it can be really beneficial to have some informal conversations about money to demonstrate that it’s not a taboo subject. 

You might have already had conversations with your child about the cost of living crisis to explain why you are being more careful with money, or why you might be making some changes to family life to help manage your budget. 

Speaking to the BBC, Paul Mehta from City Pay It Forward says: “A lot of kids will hear their parents or carers talking about the cost of living. It’s hard to grab some of these concepts when you’re an adult let alone a child, so it’s about reassuring your children that although there’ll inevitably be changes in their lives they don’t need to worry – lots of professional people are looking to make sure things work in everyone’s favour and that we all have a stable life.”

It can be a good idea to have regular open conversations about saving and budgeting, and encourage your child to ask questions, to help destigmatise money talk. It’s important to make sure you explain things in an age appropriate way, and provide them with reassurance.