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Little Green Lies: How to Talk to Your Kids About Money

Aug. 2, 2012
Managing Money
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Money doesn’t grow on trees—or does it? When little Suzie first starts to learn about money, it’s only natural that she’ll have a lot of questions. “Why are rich people rich?” she might ask. “Why are poor people poor? Why did Timmy’s parents take him to Hawaii while we spent Thanksgiving at Grandma’s in Poughkeepsie? Why does this unlicensed Dora the Explorer backpack smell like mercury?” To answer her, you’ve got a few options: The truth; Go ask your father; or, in the grand tradition of baby-bearing storks and angels bowling, a lie. Let’s be honest, that last one is almost always the easiest—and it’s certainly the most fun.

Wealthy people like to tell their kids that they have more because they work harder. But kids should know that’s not true, since they get rewarded all the time for doing nothing. Just look at the Tooth Fairy! Kindergarteners are racking up some serious dough for losing a gross tooth they didn’t even need. And doesn’t it seem like Timmy’s parents must be getting some of that magic cash, too, with all those flashy Facebook pictures from their two weeks in Oahu? Instead of explaining how a balloon mortgage works, you might just want to tell Suzie that Timmy’s mommy has a lot of teeth.

And what about Mary at school, who never has any lunch money? While that’s a great opportunity to teach Suzie about sharing (make sure to pack an extra pudding!), she might not be ready for a discussion about the current unemployment rate. Not to mention that telling her a fire-shooting robot replaced Mary’s dad at the auto plant might give her nightmares for a month. But with a little harmless lying, you can still make it a teachable moment. Just tell Suzie that Mary’s parents left their money out and leprechauns stole it for their pot at the end of the rainbow. It’s never too early to learn the value of putting your hard-earned money in the bank.

What about at Christmas time, when little Suzie gets greedy? She’s crying because she wrote Santa every day for a year and he still didn’t bring her an iPhone. Instead of telling her that Santa doesn’t think a fragile, expensive piece of technology is necessary for a six year old to watch the Wiggles on, did you think about that, Suzie?, you’ll have to get creative. Maybe he had to give all the phones to his elves—it must have been awfully hard to hit every house before the Google Maps app was invented! Plus, Mrs. Claus is just about to level up in Angry Birds.

Because kids are so curious and receptive, you know how important it is to model responsible spending habits in order to teach them the value of a dollar. And as a loving parent you’re providing them with a cozy bed, organic chicken fingers, and all of those action figures that just wind up down the toilet anyways. So when Suzie asks a question you can’t or don’t want to answer, don’t be afraid to make a little something up. Don’t worry—when they’re making all the money and changing your dirty diapers, they’ll make sure to get you back.