This article on how to talk to your kids about money was written by the Seven Dollar Millionaire, author of “Happy Ever After: Financial Freedom Isn’t A Fairytale”

I have taught at least four very different groups of people about money, from migrant workers to investment analysts, to mid-career creative workers to, most importantly, my own daughter, and each of them needed a very different approach.

Interestingly, they don’t really need different information. A lot of the concepts are exactly the same. They just need different packaging.

We can understand why by getting a little Simon Sinek about it. In his book, “Start With Why”, he talks about process leading from “Why” to “How” to “What”: if you really understand why you’re doing something, it will lead you to how you are supposed to do it, and what you have to do will become immediately obvious.

This is where so many of us get talking to our kids about money wrong. We worry too much about what we’re going to talk about. Should we talk about credit cards, or compounding? Yes and yes. Should we talk about investing, saving, tracking spending? Yes, yes and yes. All of the above are valid, but that shouldn’t be your first concern.

It shouldn’t be about what: instead, ask yourself “why am I talking to my kids about money?”

Because you want them to learn. Because you want them to be confident with their money. Because you want them to avoid mistakes you made, and take advantage of things you didn’t know existed when you were their age. Because you have learned, maybe just in time, maybe a little late, how important a healthy attitude towards money is, and you want them to have that same attitude as early as possible.

You see why this question is important?

It’s important because our “why” isn’t about us teaching. It’s about their learning. We want their brains, their emotions, their personalities, to accept this information readily. To absorb it, engage with it, run with it as though these thoughts were originally their own.

Us doing the teaching is secondary: their learning is paramount.

So we have to get ourselves out of the way and focus on one thing: how does the information “land”? It’s a word stand-up comedians use for the success of a joke. The same words, with slightly different inflection, and the joke is either hilarious or it falls flat.

The same for financial literacy. Those of us who are relatively financially literate know that most of the stuff that’s really REALLY valuable isn’t particularly complicated. In fact, a lot of it is dirt simple, and the reason most people don’t know what we know isn’t because they’re too dumb or lazy, it has just been communicated in a way that didn’t land well (if it’s communicated at all).

Now, some people will want to get in an argument here – because they do think some people are too dumb and lazy to learn personal finance – but shelve that thought as unimportant. We’re not talking about them right now. We’re talking about your kids, and we know that what matters is that they learn, not that you teach. We need to provide the information to them in a way they can accept it, and even better welcome it. That’s the how.

If they don’t learn, it’s us that’s failed in our mission, not them.

Some super-fast examples on how different this can be.

– I wrote a book for my daughter because she’s a book nerd. Seriously, she still is. But I also included sarcastic jokey fairytale references in it, because she was mid-teens, and while she was leaving her fairytale years behind, these were jokes and references she got. It was important we had fun. I also knew I wanted to go all the way from super-basic concepts “What is money?” all the way to advanced “what is financial freedom?” and that needed the kind of structure a book would provide best.

– I converted some of that book into a planner for migrant workers. They listened in class (on their one day off a week, they take classes: there’s no one lazy or dumb there!), but there’s nothing to remind them to save during the rest of the week. With a planner, the lessons were there with them when I wasn’t, and without all the words or theories they didn’t want to read. We also weren’t aiming for financial freedom, but more maximising return from their effort, so lots of the advanced concepts were unnecessary.

– When I spoke to mid-career executives about their money troubles, I knew there would be a lot of “self-blame” in the room. If that negative emotion remained it would loop forward, and perpetuate negative habits in the future. We had to break that and tell them their money problems were not their fault: even though they had spent all the money, they hadn’t known they shouldn’t. Now, they were about to learn how that same money could change their futures. Like a farmer, we had turned the land ready to accept seed.

How much more important are your kids than these audiences to you?

So, when you’re thinking about how to speak to your kids about money, the key is to think about “how” and not “what”.

1. Start with simple, practical habits. Depending on their age, it could be tracking their spending, or just putting money into a savings/investment account. Good personal finance isn’t much about theory: it’s more about practice. Piggy banks are a start, but getting that into an investment account is better.

2. Gamify this with positive reinforcements whenever possible. Play with this to see what works with your kids, which will depend on their age and interests, but make sure you reward the process, the habit, rather than a total. Get them to build streaks, and then see for themselves how positive streaks work.

3. Look for feedback all the time, and don’t take it personally. If your kids are rolling their eyes, move on to something new, or stop for a while. The information isn’t going to sneak in via a yawn. Punishment is not an option, as you only want to create positive emotions around this subject matter, and anger will tie money up with negative feelings that will cost a fortune in therapy later! If your game isn’t working, don’t keep at it: change it up. Accept that, and this becomes a fun challenge for you too.

4. Use different methods. People learn better in different ways, so try to capture this. In the book we repeat a drawing of “getting out of the woods”, where the more you know about money, the shorter the woods become. You could be in there your whole life, or you could be out in 20 years. The graphic representation of this lands much better with some people than the words of becoming a millionaire.

5. Show don’t tell. As much as possible, make sure you live the life you want them to live. “Do as I say not as I do” doesn’t work. Kids do as we do, so set them a great example. Show them your own investment account, how it’s working, where it’s working, where it’s not. Get them to give you a tip. Follow it (with a small amount of money), and don’t blame them if it goes wrong: show that getting stuff wrong is just a time to learn. It will show them how you’re in this together.

6. Give them inspirational goals. My pseudonym, the Seven Dollar Millionaire, comes from the answer to a question my daughter asked when we were talking about compounding. “So what’s the smallest amount of money I need to save every day if I want to become a millionaire.” “So, let’s say we make 7% returns, and we work until we’re 70, we would only need to save $7 a day.”

While for many of us working until 70 doesn’t sound particularly inspirational, my daughter had quietly never imagined she could earn, save or invest a million dollars, and now she knew she could. Just $7 turns into a million: the way her eyes lit up was almost magical. I still use it as my pen name as I hope one day it will inspire someone else too.

I knew at that moment my daughter would be ok. She had a short term target, we were working on regular practice, and this had given her a long-term dream that clearly inspired her. She had a path, and five years later, she’s still on it. She has finished college, got a job, and her first pay check went into an investment account. My book, and my teaching method, worked for my most important audience!

Obviously your kids are your most important audience too, and personal finance may be the most important thing you ever teach them. You’ve taught them to eat with a fork, to ride a bike, maybe even tidy their rooms, but imagine if you can teach them to invest for their own freedom. You can if you remember that “why”. The “how”, of engaging and inspiring them will follow in a way you will make unique for you and your kids, and the “what” will flow very naturally from that.

And of course, if you want to teach your daughter how “Financial Freedom Isn’t A Fairytale”, via the lessons a spoiled princess was taught by her talking pet frog… then I have a book just right for you!

To learn more about how to talk to your kids about money you can follow the Seven Dollar Millionaire on twitter @7Millionaire1 and you can purchase his book “Happy Ever After: Financial Freedom Isn’t A Fairytale” at Amazon (not a sponsored link). For more information about the book, visit the seven dollar millionaire website.

And for more about financial freedom click here.