Welcome to #TweenTalks, a weekly franchise by Grazia’s parenting community, The Juggle (@TheJuggleUK on Instagram) where we speak to experts about tackling touchy subjects with your tween-age kids. This week, global business strategist Lisa Johnson (whose company, That Strategy Co helps people creative passive income) explains how to talk to your tweens about money, from understanding poverty to making smart financial choices.
We all have our own, very specific, money mindset, and this stems from everything we learn, consciously and subconsciously when we are children. I grew up with very little, and I was encouraged to think that people with money were ‘flashy show offs’, and generally not nice people.
That is why the way we educate our own children on financial matters has a huge impact on the adults they will become. We need to play our part in forming and structuring our children’s understanding and approach to money because, frighteningly, they will one day be running the world!
We know that the UK school system is structured in a way that focuses on the traditional learning elements, and often rewards the kids with the best memories - but how are our children expected to understand the implications of money management, from the basic stuff like setting up a bank account and being responsible with money, to how different families navigate difficult financial situations?
With the cost-of-living crisis crippling so many, it’s never been more important that our children are taught about money through a clear and empathetic lens. Having these conversations now is important, because it forms a basic understanding that you can then build on once they’re teenagers and you suddenly have to help them understand mortgages, loans, taxes and all the other horrible adult money things they’ll be expected to manage when they hit adulthood.
When to start talking about money with kids
I have always been very clear about the value of money and also the transient nature of it. My boys have known a life with very little, and they now have a more privileged life.
As tweens (twins, aged 12), the understand most of what I share with them about what goes on behind the scenes when it comes to running my business. I'm very happy to discuss my earnings and how to invest a percentage of what I earn.
They have bank accounts which we set up together, for their day-to-day spending and an ISA for the future, which I have talked through with them. I’d suggest gaging how much you think your child will understand the basics of money management and saving, then having these conversations once your child is at an age that you think they need a bank account - usually, they have to be at least 11 years old to open one, but some banks offer them as young as seven!
How to help them build a healthy mindset around money
A healthy money mindset is a learnt skill, as my background proves. My twins are as genetically alike as you can get, and yet their thoughts and beliefs around money are very different.
One of them is already in the process of setting up a business with one of his friends for kids who want to be entrepreneurs, the other has absolutely no interest in this, preferring to think his future wellbeing will be down to his brother supporting him!
The key here is to educate kids to understand that there are countless ways to be successful financially. Even when starting your own business, the sky's the limit. For a more engaging learning approach, get them to look at the skills they already have, and consider how these can be monetised.
This helps them understand that money and wealth aren’t these huge, confusing concepts that feel out of reach for them to navigate – by breaking down the basics of how we make money and how their skills can be utilised, it takes away the confusion and fear on a subject that many adults even find difficult to discuss with confidence! You don’t need to be a financial whizzkid or have a super business brain to be successful, that’s ultimately what they need to learn.
How to make money relevant to them
I find it works really well to use everyday opportunities to bring money management to life. When I drag them shopping with me I talk about prices and discounts, and the importance of making thoughtful purchasing decisions.
It’s good for them to understand that expensive doesn’t always mean good quality, and at how paying more, especially for services, is worth it for the expertise and experience it provides.
I show them the household budgeting, and explain how I manage bills and expenses, explaining how I plan for monthly expenses, and how the list of monthly outgoings relates to them
We all want our kids to do the things they want to do, the things that inspire them. If that means going to university, then great, but if that means they want to make their own way in life, and potentially become entrepreneurs in their own right, it’s important that they understand the responsibilities and the ramifications of taking this path.
When to give them responsibility and introduce financial rewards
This is one of the easiest, and usually beginning, ways that children learn how finances work. I introduced a list of chores around the house that my boys need to complete to get paid, but what I didn’t tell them was that I was watching what they did with regard to helping out with tasks that weren’t on the list. When they do something that is really helpful but isn’t on the list, I always make a point of thanking them and giving them a little ‘bonus’.
This way they are learning the self-starter mindset, and they are rewarded for using their initiative. I don’t want them to see money as the only motivator, and hopefully this will encourage them to help out with and do things that we may not have even realised needed doing, which will most certainly stand them in good stead when they enter the workplace.
How to help them understand families in different or worse off financial circumstances
Generally, kids don’t tend notice the difference between the rich and the poor until they’re a lot older. But if your kid is starting to ask questions that reflect they are noticing, reinforce the understanding that money and financial wellbeing have absolutely no impact on the kind of people you can or want to be friends with.
Make sure they know not make comparisons around what they have compared to their friends and be aware that certain activities may not be doable for some of their friends. My boys have a friend who doesn’t have a mobile phone for financial reasons, so they make a point of having an in-person meet up at school a couple of times a day to shore up plans and make arrangements, so no one feels left out of the group chat.
About the expert
Lisa Johnson, 47, is a global business strategist running That Strategy Co, helping ambitious people to create passive and semi-passive income streams. She’s a Sunday Times-bestselling author and mother-of-12-year-old twins - Finnian and Albert - and she went from being £35,000 in debt to earning £16m over just six years.