A couple of years ago, if anyone had asked me how I’d start the “money conversation” with my kids, I’d have gone slightly pale and mumbled something like, “I don’t know – where should you start?”

Answering Your Kids' Money Questions

Well, now that I’m a few years wiser as a parent, I know where to start – with my kids' inevitable questions:

”Why can’t I have that [comic] Mom?”

“Why is he giving you money [change] Mom?”

“Why didn’t you pick the cheapest [whatever], Mom?”

Nowadays, I recognise that “money conversations” don’t take place in a formal setting.

They're organic, spur-of-the-moment opportunities to have quick chats that will hopefully build on each other over time.

I drop comments about money into conversations with my kids every day. When they’re helping me with groceries, we chat about “value for money”:

“Yes, those eggs are the cheapest, Danny, but they’re not laid by happy chickens so I don’t mind paying a little more for my eggs.”

Using Financial Education in Daily Life

If they’re nagging me for a new toy in the store, it’s a great opportunity to teach them about responsibility for their own money: “Sure you can get it, but the money comes out of your allowance, so it’ll take you longer to save for those Heelys.”

If we’re at the self-serve checkout (and there isn’t a big queue behind us), I let them check out our groceries – reading the screen, scanning everything, paying, and collecting their change. It’s a great opportunity to learn and opens up lots of money questions. How much change will you get? Why does it show different options to pay? And so on.

And believe me, these conversations are starting to pay off! The other night, I heard my 7-year-old negotiating with his sister (5) for 15 minutes of playtime with her guitar. The conversation went like this:

Danny: O.K. I’ll give you 25 cents.

Ruby: No – the rent is $1.

Danny: 50 cents?

Ruby: Ok… but you only get it for 10 minutes!

Hearing this made me giggle – and made me realise that our money conversations are paying off!

My husband and I are developing a team of negotiators, which is great. Especially in light of the news from Salary.com that 55 percent of Americans won’t negotiate their salary due to fear or lack of confidence!

I hope my kids will continue to negotiate their way through life.

If you’re wondering what money knowledge your child should know by now, check out Money As You Grow. It’s a great site, with very clear guidance on what your child should know about money, whatever their age.