How to Talk to Kids About Money (Even if You Have None) Rich people probably spend more time thinking about their money than the rest of us. But even they struggle to discuss financial issues with their kids. It's a difficult subject that crosses income levels. I recently came across a paper prepared by Glenn Kurlander, a Morgan Stanley wealth adviser with a well-heeled client base. He offered a set of rules for talking to kids about money, and even though he was preaching to the affluent his rules have broad application. Here's my take on his excellent advice: Money is like sex. Not really, but it's true that kids know more than we think they know. They are observant little creatures. They see you pay with plastic. They hear you argue about spending with your spouse. They read the stress on your face while paying bills. And yes, if "they're always on your private jet ... I think they've figured it out" that you are worth a boatload. Good or bad, they learn from all of it. Think before you talk. You have got to come to grips with your own values about wealth before you can have that talk with your kids. You can't buy a new Porsche every year and then try to explain that material things won't make you happy. You can't tell kids to give something to charity and not do it yourself. "If there is significant discrepancy between what we say and what we do, they'll be quick to see it," Kurlander notes. They'll be inclined to ignore what we say and see us as hypocrites. Talk, talk, talk. Money is the last taboo - the subject families still don't talk about. We've become comfortable discussing drugs, sex and politics - but not money. Kids don't learn about money in school. They must get their information from parents before they wind up with debts they can't pay and in time to start saving for retirement. In Kurlander's world, the discussion should include "What are the responsibilities, obligations and challenges that come with wealth? Why do we value it? How did we accumulate it, and what did we learn from the effort of accumulation? How, if at all, would we be different if we lost it? Valid questions too for those blessed with such a problem. Talk with them, not to them. This is pretty obvious but worth the reminder. Don't lecture; elicit a conversation. A subject as difficult as money won't hold kids" attention unless they are engaged. As Kurlander writes, "The single most effective way to engage children is to ask them questions that challenge their assumptions and force them to search for their own answers." Be careful how you say it. What you mean and what you say sometimes don't follow. Maybe your daughter has a friend whose family is suffering through a job loss. Your daughter has a new iPhone and wants to show it to her friend, but you suggest she not go to her friend's house. Your thought: it's not right to flaunt an expensive toy while the family is down. But the message received might be: Hey, they don't have any money. Give kids an allowance. There is a lot of disagreement on how to do this. But the only way kids will ever learn to budget, make smart money decisions and understand delayed gratification is through hands-on practice with their own cash. Kurlander suggests starting very early by offering a child some cash to spend at a baseball game with the explanation that when it is gone there is no more. By age 6 or 7, move to a weekly allowance with a similar explanation. "If we've chosen the amount well, there will be times when kids will run out of money in the middle of the week," he writes. When that happens, we can't bail them out; if we do, we're undermining the purpose of the exercise. Make an investment in them. We want our kids to have the best we can afford to give them. But simply giving them what they want won't lead to a life of achievement. If your son wants a new bike, offer to pay half and let him earn the other half. Kurlander's clients worry that the wealth they leave their kids will make them lazy and unproductive; they struggle with how to leave their kids wealthy but also with a healthy work ethic. Most of us just want our kids to be able to earn their way through life because they'll have to - and you do that by investing in them early on. It ain't over "til it's over. Talking to kids about money is not something you do once; it must be done repeatedly for as long as you live. Your kids will never catch up to you in terms of experience and context. You'll always have something to offer - if they are willing to listen. As Kurlander writes: "We don't stop being parents in any other sphere until we stop being. And if we've done our jobs well, perhaps our kids hear our voice in their heads, helping them find the way, even after death has silenced us. If we continue being parents in all else, why would we think we stop when it comes to money? MORE: The Great Debate: Do Millennials Really Want Cars, or Not?