How can parents talk to kids about money?
About this video
Sal compares his childhood, when he saw cash and change at his family's convenience store, with his children's experience of a 'magic plastic' card. Because money is less visible today, he thinks parents should explain what happens when they use credit and debit cards. He shares his pride when his six-year-old asked 'Can we afford this?' and encourages parents to let kids feel a little financial constraint.
You'll be able to
- explain why cards make money less visible to children than cash.
- explain why the speaker wants kids to ask 'Can we afford this?'.
- describe how parents could talk to children about money.
Key words
- Credit card
- A card that lets you borrow money to pay now and pay the bank back later.
- Debit card
- A card that takes money straight from your bank account when you pay.
- Making change
- Working out and giving back the extra money when someone pays more than the price.
- Scarcity
- Not having enough to get everything you want, so you have to choose.
Transcript
- When I was a kid we saw physical money all the time and I would see, you know, my Mom or my uncles, you know, go to a store and, you know, give a 10 dollar bill and then get a five dollars and then a little bit of change. And actually, you know, my family, my uncles ran a convenience store and then my Mom kind of worked as a manager at a convenience store.
So I actually saw a lot of, you know, I was very familiar with the notion of a cash register and how to make change. And actually I thought that was an incredible experience for me even when I was, when I was very, very, very young. And what I see in my own children is now if we go to a store or we go to a restaurant I just hand them this piece of plastic.
Then the, you know, it kind of disappears for a few minutes. It shows up again and I just sign it and my kids just think that there's this magic plastic thing (laughing) that somehow allows us to eat places or whatever. Or they probably don't even appreciate that not everyone might be able to go to a restaurant or be able to buy a certain type of thing.
So I find it especially important because it's not as obvious for this generation. To talk to my children about what's happening when I give a credit card, when I use a debit card. You know, some parents I think take a lot of satisfaction in being able, in fact, all parents take a lot of satisfaction in being able to provide for their children and they don't want, they want to protect their children from thinking "Oh maybe there's some scarcity," "maybe we can't have everything."
But, you know, one of my proudest moments was a few weeks ago when my son said, "Hey Dad, can we afford this?" And, you know, it was something very simple. It was like a pencil sharpener. (laughing) We could afford it. But I just love the fact that, you know, there was this like two dollar thing and my six year old son was asking that question.
Can we afford this? And so, I would encourage all parents. You know, even if, even frankly, even if you're doing okay. Even if you don't have, you know, any financial stress. Try to make your kids feel like you have a little bit.
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