We found it much more effective to talk in front of our kids than “to” our kids. It is much less threatening to them if they can listen without being forced to have an opinion on stuff they know basically nothing about. It is amazing what all they soak up. The lesson to teach needs to be age-appropriate. Don’t talk your 7 year old about the benefits of a Roth IRA.
When they are young, our goal was just to highlight that there are options. Husband: “Did you see the Jones got a new BMW?” Wife: “Yes, it is pretty”. Husband: “We could get one. Want to?”. Wife: “No way. Our Prius is $15k less and gets way better gas milage. I would rather take the $15k we save and take a trip to Europe.” Then when you do take the kids to Europe, reinforce. “I’m so glad we did this trip instead of buying the BMW. These memories will last a lifetime. The BMW will be gone in a few years”. As the kids get older, we found the best way to reinforce was to let them make as many choices as possible. Instead of paying for things for them, give them the money and make them buy them. It is funny how their opinion about what they “need” changes when it is their money. They can buy the $100 pair of shoes, or the $50 pair of shoes and then have $50 to buy that sweater they want. Their call. We found that grocery shopping provides a pretty good backdrop for talking about the value trade offs (sales, coupons, etc)
As they enter high school, we turned the conversations to college. Wife: “Did you hear that the Jones girl is going to college to study basket weaving?”. Husband: “Yeah, she is an idiot and I can’t believe her parents didn’t teach her better. You can’t get a job with that degree. She is going to be working at McDonalds and living in a trailer park”. Wife: “Yeah, she certainly won’t be taking any trips to Europe”.
Kids are now 26 and 24 (ICU nurse and 4th year med school). We are fire’d and we really didn’t start talking to our kids about saving, retiring early, investing, etc until the past few years. They didn’t need the info yet and now they are old enough to know that (1) FIRE isn’t normal, and (2) They want some of that.