Forget Sex, Talk to Your Kids About Money

Parents know to expect some tough questions from their children. So I wasn't caught off-guard when my daughter started badgering me about where babies come from. But some mothers and fathers may be surprised to learn that the majority of kids also want to have some tough conversations about money.

According to T. Rowe Price's second annual Parents, Kids & Money survey, 65% of children approach their parents to discuss money issues. And while 80% of moms and dads say they discuss finances as a family every few weeks, at least one-third of mothers and fathers feel they aren't doing enough to prepare their children to make good financial decisions by the time they reach age 18.

Worse still, parents believe that the lessons they do try to teach their kids fall on deaf ears. Indeed, only half of children actually use the wisdom their mothers and fathers pass onto them and 60% of youngsters simply can't remember the lessons or need a bit of reminding.

Even something as simple as allowance management is tough for kids to understand. Despite family discussions about how to spend one's allowance, the majority of children sometimes squander their money as soon as they get it and nearly 40% always or sometimes end up asking their mothers and fathers for more cash.

I can't say that I'm entirely surprised by the survey results. After all, many adults don't know how to manage their own finances so it's only natural that they'd have trouble teaching their children how to balance a checkbook or live within their means. But even those of us who do have a good handle on budgeting and investing may still have a difficult time knowing what to teach a child and at what age.

Let me just say that unless you plan to be the sort of parent that enjoys giving your adult children handouts, it's best you have some pretty sophisticated money conversations while your kids are still in high school. Not sure where to start? I recently came across a great game that could help you get the conversation going. It's called ThriveTime for Teens and was developed by Sharon Lechter, the co-author of "Rich Dad, Poor Dad".

What I like about ThriveTime is that players need to keep an income statement and update it based upon different scenarios they face throughout the game. Teenagers are forced to make realistic financial decisions about everything from whether or not they should pay off a credit card to how much they want to donate to charity.

I don't necessarily think that getting your teen to play ThriveTime will teach them everything they need to know about money. But I think it will get them used to the idea that households run on budgets and that the little decisions they make -- such as running up a cell phone bill -- have financial consequences. It may also give you the opportunity to explain how many bills you juggle each month and help illustrate why you don't buy your kids everything they want.

When all else fails and you simply can't find the right words to teach your kids about money, try asking a relative or close friend who's savvy with finances to do it for you. Not only will you ensure the right message is conveyed, but you may also discover your son or daughter is more receptive to learning. As much as I hate to admit it, we all know our children sometimes listen more attentively when they aren't getting a lesson from Mom or Dad.

Have you tried to teach your kids about money? How do you go about it?

Piggy Bank image by Carly_Jane1, CC 2.0.