Talking to kids about money and my unexpected lesson from Dick Van Dyke

Talking about money is hard. I grew up in the “don’t ask, don’t tell” generation and that applied to more than just the military. Money was one of those subjects that was barely taught in school, let alone more complicated subjects such as actually managing your money or making it grow. Sure, it’s important to know that four quarters equal a dollar. But now that cash plays an increasingly smaller role in our day-to-day financial experiences, why isn’t our kids’ early childhood education around money keeping up with the times?

You’re probably well aware that the student loan crisis is creating a generation of adults saddled with debt before they even begin their careers. At the same time, data from Sallie Mae shows that credit card debt among college students is also on the rise. How can we expect young adults to make sound financial decisions if they don’t have the basic building blocks to understand long-term implications? The lack of conversation and education around basic financial concepts such as investing at an early age means years of missed growth opportunities.

I was inspired to finally write about this after watching Mary Poppins Returns with my kids (ages 6 and 8). At the very end of the movie (spoiler alert!), Mr. Dawes, Jr., played by the legendary Dick Van Dyke, comes to the rescue of Michael Banks who is all grown up but facing immense financial stress. In a moment of luck and happenstance, Mr. Dawes, Jr. informs Michael that the tuppance (twopence coin) that he let his father deposit in the bank 3 decades prior had grown to such an immense value that it was worth enough to pay off his loan and save the family’s house. Wow!

After the movie ended and my kids were already begging for another, I had to ask, “did you know money can grow like that?” Not surprisingly, the answer was “no” plus a couple of eye rolls, so I left it at that. But it got me thinking about how amazing it would have been if I had invested when I was only 10. What would that look like today?

The analyst in me had to do the math (by which I mean, find a compound interest calculator online). If I had taken two cents and invested it in the S&P 500 back in 1991, assuming an average return of 6%, I would have a whopping 12 cents today. That doesn’t sound like enough to buy a house in London. However, if I had invested those two cents and also contributed $5 every month for 30 years, I would have more than $5,000 today. Still not enough to buy a house, but enough to blow the mind of an 8 year old.

Talking to kids about money can be daunting. But if we break it down into bite-sized takeaways for them, we can gradually nudge them toward a more financially confident future, and that’s worth more than a house in London to me.

If you are interested in hearing more of my thoughts around talking to kids about money, send me your questions or tell me about any  money conversations you’ve had with your own kids!