Part 2 of 4 

Young children don’t understand money conversations as well as teens or younger adults, but it’s never too early to start helping them develop attributes and vocabulary they’ll need later. Studies suggest that habits take root in children as young as age nine. Here are three conversations to have with your young child.

Conversation #1: grit

According to the book Grit for Kids by Lee David Daniels, “People that have grit are extraordinarily resilient and are willing to put in the effort to get things done. The reason they are motivated to do so is that they are driven by an overriding purpose. In other words, they are a car traveling on a road and following a map with a destination. Just like on any road trip, detours and slow traffic can happen. Having grit allows people to overcome these obstacles.”

Teaching kids grit is about having conversations around—and enforcing—them to take on responsibilities. Discuss chores, allowances and family financial goals with your kids—highlighting their personal responsibilities to the household. Sticking to the plans you lay out, and enforcing consequences when responsibilities are neglected, helps children feel purposeful and learn how to persevere.

Conversation #2: commitment to family

Involve young children in family meetings—formal and informal gatherings of family members from every generation where the estate and other financial matters are discussed. Allowing even the youngest members of the family to be a part of the discussion and ask questions will help give them a sense of purpose and responsibility. Strive to answer each question; there’s no need to go into great detail, but children can feel frustrated and lose interest in the process if their questions go unanswered. Help them find their voice at the table and expand your relationship by asking them questions.

Conversation #3: philanthropy and gifting

Introduce philanthropy to young children with conversations about charitable organizations that appeal to you personally—and help identify those that are meaningful to your child.

The idea of “gifting” starts at a young age, too. When there’s a gift-giving opportunity like a holiday or birthday and kids are expected to give a gift, discuss appropriate price ranges and why that matters. Discuss how a gift for a grandparent may be a different price range than a gift for a school friend. If you child is having a birthday party, introduce the idea of choosing a charity as a benefactor. Instead of accepting gifts, ask for a small donation or a gift for a specific charity, such as the local children’s hospital.  This can have an impact not only on your child, but their friends too!