The 5 Money Conversations to Have with Your Kids at Every Age and Stage

The 5 Money Conversations to Have with Your Kids at Every Age and Stage

by Scott Palmer, Bethany Palmer

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Raise your hand if your parents had "the talk" with you. No, not that talk. We mean the money talk.
Money affects you and your kids every day. Now there's a way to talk about money in a way that actually brings your family closer.
With two kids of our own, we suspect our parenting goals are likely the same as yours—no spoiled brats, no crippling debt, and kids who know a dollar actually takes work. That's why we wrote this book.
The 5 Money Conversations to Have with Your Kids at Every Age and Stage offers practical advice for dealing with three age groups (5–12, 13–17, and 18 and beyond). It is the parenting "how to" book you don't want to live without.
  • Conquer the 5 toughest money conversations to have with your kids
  • Discover your kids' Money Personalities by taking the age-based Money Personalities Assessment (access code included inside)
  • Learn their Money Languages so you can be heard
We give you relationship secrets, share our experiences, and make it fun. Whether your kids are 5 or 25, this book will change the course of your family forever!

Product Details

ISBN-13: 9780718011222
Publisher: Nelson, Thomas, Inc.
Publication date: 01/06/2015
Sold by: HarperCollins Publishing
Format: NOOK Book
Pages: 262
File size: 909 KB

About the Author

Scott and Bethany Palmer, The Money Couple, have dedicated their lives to helping others strengthen their relationships with the 5 Money Personalities. With forty-three years of combined financial planning experience, they launched “The Money Couple” and are regulars on national TV and radio and speak internationally about love and money. Scott and Bethany enjoy an active lifestyle with their two young sons, Cole and Cade.

Read an Excerpt

The 5 Money Conversations to Have with Your Kids at Every Age and Stage

By Scott Palmer, Bethany Palmer

Thomas Nelson

Copyright © 2014 Scott and Bethany Palmer
All rights reserved.
ISBN: 978-0-8499-6479-4


Money and Relationships

Raise your hand if your parents had "the talk" with you. No, not that talk. We mean the talk about how to balance a checkbook and manage your savings and plan for the future. Our guess is that there aren't many hands in the air.

Those of us who grew up in the 1970s and 80s were as likely to have money conversations with our parents as we were conversations about the birds and the bees. For our parents, the idea that you would intentionally teach your kids about money wasn't really on the radar. Their parents—our Depression-era grandparents—didn't talk about money, so ours didn't either.

Add to that, most of us came of age in a time when the economic future looked pretty bright. Until recently, every generation has experienced more prosperity than the generation before it. But that's changing. There are conflicting predictions about what the future might be like for our kids, but one thing is for sure—our kids are going to need some money smarts to navigate their futures.

We meet with thousands of couples every year to help them sort out their finances. And in the past ten years, we've discovered that the skills people need to figure out their money issues have almost nothing to do with crunching numbers or understanding global markets. Instead, we've found that what couples really need to manage their money is strong communication, the ability to understand each other, and a commitment to putting their relationship above their budget.

The same is true when it comes to helping your kids learn about money. We hear from parents all the time:

"My son is so irresponsible with money."

"My child spends her allowance on the most useless stuff."

"I'm sick of my kids begging for toys every time we go to the store."

"Our kids expect us to spend a fortune on them at Christmas."

"Our son needs to start saving money to help pay for college, but he can't seem to do it."

Parents talk to us about these issues because they want their kids to avoid the money conflicts and anxieties and mistakes they've dealt with. They worry that if they don't give their kids money management skills now, their kids will bounce checks and run up credit card debt and never have a dime in a savings account. And for the most part, they're right.

Our kids need us to teach them about money. The skills we need to manage our finances don't come naturally for most of us. So it's essential that of the many life skills we pass on to our kids, money management is close to the top of the list. But there's another set of money-related skills that most parents never think about, because most of us don't have those skills ourselves.

Every money problem, every money fight, every money conversation has two layers. The first layer involves the financial details—your budget, your savings account, your debt and retirement and college funds and phone bills and parking tickets, and so on. Those are your finances, and that's all important stuff.

But it's the second, more foundational layer that we want to uncover in this book. We think of it as your Money Relationship—the how and why underneath those financial details. It's those deep-seated assumptions and beliefs you bring to the decisions you make that involve money. And every decision you make as a family involves money.

Really. Think about it for a minute. The kind of house you live in? A money decision. The kind of jobs you have? A money decision. The cars you drive, the shoes you wear, the coffee you drink, the TV shows you get? All money decisions.

And when kids are involved, the money component of those daily decisions becomes even clearer. Hospital birth or home birth? Work or stay home? Cloth or disposable? Homemade baby food or store bought? Public school or private school? New clothes or hand-me-downs? Allowances, birthday presents, checkout-line goodies, another field trip fee, more new shoes, summer camp, piano lessons, broken backpacks, this winter's growth spurt, and on and on it goes.

Every year the US Department of Agriculture puts together a report, "Expenditures on Children by Families." The 2013 report, which includes everything from housing and food to health care and school expenses, puts the average yearly cost of raising a child around $13,000 to $15,000. Per child. Per year. Good grief!

All those money decisions mean that families are thinking about and dealing with money at least once a day if not more. And not just the details of these decisions but the emotions and expectations behind them. Your preschooler wants a quarter for a gumball at the coffee shop. Your teenager needs a check for $80 to pay her booster fee for the tennis team. Your sixth grader wants to use his allowance to buy a new game for his DS. None of these decisions will break your budget, but all of them have implications for your relationship with your child.

When your preschooler asks for a gumball, you're not thinking about the quarter. You're thinking about how many times your child asks for something and whether you'll create a greedy little monster if you always say yes. The check for the tennis team isn't just a booster fee. It's also a sign that you support your child's interests, or it's a moment to hand over some financial responsibility to her, or it may be a time to talk about just how packed her schedule may become. And that DS game isn't just a game. It's a chance to show your child that you trust his judgment, or a time to put the kibosh on a habit that has gotten out of hand, or an opportunity to teach some great lessons about delayed gratification.

Every one of these seemingly straightforward money decisions is the tip of the Money Relationship iceberg. If you know how to navigate your way through the relationship side of these decisions, you'll find that you not only help your kids make smart money decisions but also strengthen your mutual emotional bonds. Misread the signs and you risk a breach in the keel that keeps a family close and connected.

When Bethany was a teenager, she was a nationally ranked competitive swimmer. Her coach wanted her to attend a big-deal training camp with an Olympic training team. It was a huge opportunity for Bethany, and she was honored to be invited to the camp. As Bethany was preparing for the trip, her coach called to let Bethany's mom know they had to buy a special team swimsuit for the camp. Bethany's mom, who hates to spend money, thought that was ridiculous. In her mind, Bethany had enough swimsuits already and certainly didn't need another one that would cost $35. Bethany heard her mom's conversation with the coach and her mom's refusal to buy the suit. And she was crushed.

For Bethany's mom, this was a financial decision. But for Bethany, her mom's unwillingness to buy the suit felt like a lack of support for her dreams. In Bethany's mind, this camp was a once-in-a-lifetime opportunity, and now her mom couldn't spend $35 on it? Wasn't she worth that much?

The sting of that decision hurt and created real emotional distance between Bethany and her mom. Obviously Bethany's mom didn't mean to hurt her daughter. And now as an adult, Bethany understands the way her mom thinks about money.

When we get parents talking about their own childhood experiences with earning an allowance or going on vacation or getting their first jobs, they always have a story like Bethany's, a time when a financial decision became a point of contention between them and their parents.

Henry told us how he planned on saving his paper route money so he could buy a new bike, only to find out that his parents expected him to use his income to buy his own clothes and school supplies.

Peter remembered having a huge blowup with his father when he bought his first car. His dad insisted that he buy something economical and safe, while Peter was determined to buy a cool set of wheels he could customize.

Rachelle's mom was as thrifty as they get, and she rarely bought new clothes and toys for her children. Even when Rachelle begged her parents for a new toy at Christmas, every Christmas morning brought the same kind of secondhand dolls and used clothes she had come to expect. "If we had been really poor, I would have understood," said Rachelle, "but we had money. My mom just didn't like to spend money on things that she knew we'd outgrow or break. I suppose she was trying to be smart with her spending, but I just saw it as her caring more about saving money than giving her kids something special."

You probably have a few stories like this too. Most of us can think of a time when we butted heads with our parents over a money decision. And if you still remember it, it's because you had an emotional response to that conflict, a response that created tension between you and your parents. You can butt heads at age seven or seventy; the reality is ... it will happen.

That's the Money Relationship at work.

Your Money Relationship has nothing to do with how much you spend on your kids. It has nothing to do with how much you've saved for college or how much allowance you give. It has nothing to do with how much debt you have or how much you've invested. Those are your financial arrangements, and we're not going to spend much time discussing those here.

Instead, we're going to dig into what really makes or breaks a family—your relationships. You can have a great budget, a healthy college fund, and a great system for doling out allowances, but if you are constantly bickering with your kids about their spending, missing out on making memories now in order to fund their futures, or putting all your energies into making sure every child is earning every cent of his or her allowance, well, you've hit the wrong target. You might have a solid financial future, but you'll have a family that can barely be in a room together without fighting.

That's why we're going to focus on the Money Relationship between you and your kids. All the chore charts and savings plans in the world aren't worth a thing if you have broken relationships. As we focus on your Money Relationship, you'll notice that we refer to your parenting partner instead of your spouse. We've been intentional about that language as a way of acknowledging that a family isn't always two married people and their children. We want to make sure single parents and blended families with moms, dads, and stepparents feel encouraged to take on these conversations as well. It's essential that all of the primary adults in your children's lives are working together to help build these money skills.

We're going to use the next two chapters to lay the foundation for building a strong, healthy Money Relationship with your kids. Then we'll kick into high gear and work through the biggest challenges parents face when helping their kids learn how to think about and manage money and relationships. This mix of theory and practical advice is the springboard for making sure that money is not a point of conflict in your family and might actually become an area that helps your family connection become even stronger.


Discovering Your Money Personalities

When we talk to others about their Money Relationships, we're more interested in the "relationship" part than the "money" part. Money is a tool, a means to an end. And that end is always the relationship.

You spend money on your spouse to demonstrate your love for him or her. You save money for your children's educations to help launch them into adulthood. You set aside money for your retirement because you want to relax and enjoy time with your friends and family. You invest to make sure your future is well funded.

Even when you argue about money, you're really fighting about the relationship. One of you feels disrespected by the other. Or you are afraid that your spouse is going to ignore your financial plans and leave you without a nest egg. You argue because you feel misunderstood or ignored. When you get mad at your partner for buying $100 shoes after agreeing that you could only afford to spend $50, it's not the extra $50 that bugs you. It's that this person you love and trust violated your agreement.

This idea that your relationship matters more than your money is central to what we're talking about in this book. You have a Money Relationship with your partner, but you also have a Money Relationship with each of your children. And we know that you want to make that relationship as strong and healthy as possible, not because you hope your kids will save 30 percent of their allowance or know how to calculate interest, but because you treasure your connection with your kids.

But so often, we meet families who are struggling to keep that connection strong because of money. Mom and Dad disagree about how much allowance little Zack ought to get and what he should do to get it. Now that she has her first job, Candace can't keep a buck in her pocket, and her seeming irresponsibility drives her parents crazy. Ben is a sophomore in college and can't get his credit card debt under control, no matter how much his parents harp on him about it. In all of these cases, the Money Relationships between parents and their kids is starting to crack. And no one is happy about it.

That's why it's essential that parents not only have the practical tools to talk about the nitty-gritty details of money management but also have the kind of relationship tools that help keep them close and connected with their kids.

And the best tool of all is understanding something we call your Money Personalities.

We all know people who have very different ideas about money than we do. It doesn't take long to rattle off a list—your buddy who can't wait to show you his latest purchase, the friend who clips coupons and outfits her kids with thrift store finds, the coworker who's always playing the stock market and the one who gets nervous every time the market takes a dip. And then there are those people we know who don't seem to care about money at all. Spend it, don't spend it—they don't give it a second thought.

What we've come to see in our years of working as financial advisors is that everyone has his or her own unique way of thinking about and dealing with money. And those particular ideas are what make up a person's two Money Personalities.

We (Scott and Bethany) happen to have lots of similar ideas about money. We both love to spend, spend, spend. Our family vacations are a blast! We don't even care if we spend a lot of money. When we were first married and working hard to get our financial footing as a couple, we would still find ways to scratch that spending itch. It could be a stop for ice cream on the way home from work or a weekend getaway or finding just the right gift for a friend or even donating a good chunk of money to a cause we were passionate about. It has never been about the stuff for us, but about the enjoyment we get from spending.

So when we meet people who love to save money, those people who would rather wear a ten-year-old suit than splurge on something new or who will shop for day-old bread just to save a dollar or two, well, we don't get it. And those people who don't think about money at all? What planet did they fall off of?

You have two Money Personalities, your parenting partner has two Money Personalities, and each of your kids has two Money Personalities. While you might have some shared ideas about money, it's highly likely that you also have many differences in your Money Personalities. It's those differences that create tension in your Money Relationship.

Remember, almost every decision you make has a money component to it, so the way you think about and deal with money has a huge impact on your daily life and your interactions with other people. That's why it's so crucial to know your Money Personalities and to figure out your children's Money Personalities.

So let's get to it!

There are five basic Money Personalities:


The Saver loves to save money and gets a huge thrill out of getting a good deal. Whether he has loads of money or barely a penny to his name, the Saver is always looking for ways to spend less. Savers love to save money and also get pure enjoyment out of helping others save money too.


It's no surprise that the Spender is all about the enjoyment that comes from spending money. It doesn't matter if she's spending on herself or giving to others. It doesn't have to be a lot—the thrill of buying a new car isn't all that different from the thrill of buying a pack of gum. Okay, maybe it's a little different, but for a Spender, buying is buying, and it's awesome.

Risk Taker

These are the entrepreneurs, the visionaries, the ones willing to put every dime they have into a high-risk venture. They are as likely to end up billionaires as they are to end up bankrupt. But it's their love of adventure, a new deal, or the unknown—not their bank accounts—that drives them.

Security Seeker

Security Seekers are always looking ahead and thinking about the plan for the future. The strong sense of planning gives them the secure feeling they need.


Excerpted from The 5 Money Conversations to Have with Your Kids at Every Age and Stage by Scott Palmer, Bethany Palmer. Copyright © 2014 Scott and Bethany Palmer. Excerpted by permission of Thomas Nelson.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Acknowledgments ix

Section 1 Your Money Relationship

Chapter 1 Money and Relationships 3

Chapter 2 Discovering Your Money Personalities 11

Chapter 3 Kids and Money Personalities 18

Section 2 Ages 5-12

Chapter 4 Inside the Mind of Your Child 39

Chapter 5 Allowance 47

Chapter 6 The Gimmes 62

Chapter 7 Sports and Extracurricular Activities 73

Chapter 8 Holidays and Birthdays 85

Chapter 9 Dealing with Relatives 96

Chapter 10 Money Personality Goals for Ages 5-12 109

Section 3 Ages 13-17

Chapter 11 Inside the Mind of Your Teenager 117

Chapter 12 Discretionary Income 126

Chapter 13 Technology: The Teenage Gimmes 138

Chapter 14 Social Life 147

Chapter 15 Extracurriculars 157

Chapter 16 Planning for the Future 166

Chapter 17 Money Personality Goals for Ages 13-17 177

Section 4 Ages 18 and Beyond

Chapter 18 Inside the Mind of Your Young Adult 183

Chapter 19 Financial Independence 192

Chapter 20 Firsts 204

Chapter 21 Debt 216

Chapter 22 Lending Money 226

Chapter 23 Moving Home 238

Chapter 24 Money Personality Goals for Ages IS and Beyond 250

Chapter 25 Making It Happen! 255

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