Talking Finances: How To Discuss Money With Your Kids
When Duke Eatmon wanted to teach his 16-year-old daughter about money, he put her to work.
Eatmon along with hip-hop legend Chuck D and collaborator Ron Maskell developed the world’s first hip-hop almanac, This Day In Hip Hop and Rap History, a couple of years ago. Because of the fast-flowing nature of hip hop, the almanac has to be updated almost daily. Eatmon and Maskell also produce a weekly radio show “…And You Don’t Stop” on WBAI99.5 FM in New York City.
“This is where my daughter Jessica comes in. For starters, I now record my vocal parts for “…And You Don’t Stop” and email my vocals to [the producer] based in Boston,” explains Montreal, Canada-based Eatmon. “It’s up to my daughter to download my work and send it in.” Eatmon’s daughter earns a weekly allowance for this task. “She’s done a pretty good job thus far. But at times she has mislabeled certain recordings or has forgotten to download certain recordings, which is typical of a 16-year-old girl who probably has her mind more on Justin Bieber and Bow Wow then at the task at hand,” explains Eatmon, who docks his daughter for errors.
“I’ve explained to her that it sometimes works like this in the business world when we make errors that may cost a company or cause a problem for a paying client,” he says.
There are many ways to teach kids about money, Neale Godfrey, author of Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children, there are key money conversations to have with your children. Forbes took a look at them.
1. People Earn Money at Their Jobs: “It’s about raising kids who understand money doesn’t grow on trees,” she tells Forbes. “Once your kid recognizes that you’re using money to make purchases, usually around 3 years old, it’s time to teach her where that money comes from,” adds Godfrey. Have a discussion about your job and what you do to earn money. Have your child tell you what career they’re interested in and let her earn extra money by doing things related to that career. “For example, if she wants to be a veterinarian, put her in charge of walking, bathing and feeding the dog, and pay her slightly extra for the tasks,” writes the magazine.
2. You Need to Budget if You Want to Buy Things: Talk to your child about budgeting and show her how. This is what Eatmon did. “I decided to teach her about money because as a typical North American teenager, she’s always asking for a lot of it,” laughs Eatmon. “As she is going to college next year and will be starting a part-time job, I figured it might be better for her to get some home training from me before she falls into a state of shock by some mean, rigid boss who may not be so lenient and compassionate to her occasional mess-ups.” Divide your kid´s allowance into jars — 10 percent for charity, 30 percent for quick cash, 30 percent for savings to be used in the next couple of years, and 30 percent for long-term savings, recommends Godfrey.
3. Giving Back Is Just as Important as Saving for Yourself: Talk to your child about the importance of giving back some what what they have earned to charity. Have her pick a charity and make a donation.