Parents don’t want to unduly confuse or worry their kids with financial concerns. We instinctively want to protect our children from the tough and complicated aspects of adult life. However, if you don't talk to your kids about money, they will pick up cues elsewhere. Perhaps their friend’s parents have a different income or spending habits to yours, or they may pick up unrealsitic notions of the value of money from television. It is important to impart your values to your children and keep their expectations realistic.
Here are our top tips to talking to your kids about money
- Parents are the most influential teacher in a child's life. Start teaching them about money the when they are very young, about the same age that you teach them to say please and thank you, how to brush their teeth, etc. Young children understand the notion that putting coins in a piggy bank is saving for later. This will teach them the notion of ‘delayed gratification’. Studies have shown that kids with self-discipline are happier and tend to grow up to be more satisfied and productive adults.
- When the children reach about 8 or 9, let them see you paying the bills. Take them with you to the bank, let them see you actively saving and explain what you are saving for; a holiday, your retirement fund, etc. This will not only show them the realities of the family finances, but will also show them good money habits.
- Buying your child whatever he or she wants will not make them thrive. By teaching your children how to help earn money and to save to help pay for what they need is a priceless life skill.
- Giving you child pocket money will teach them manage their money, and learn what it feels like to only have so much cash, and that when it's gone, it's gone. Stand firm when they come begging for more money. This will quickly teach them the notion of budgeting.
- Don’t hide money mistakes you have made. Confessing that you have made a poor financial decision allows the parent the opportunity to teach their child how to fix that mistake.
- Chat about money at the dinner table. Allow children feel secure that they know what is going on in the home and the wider economy.
- Always shop with a list, and try to stick to it. Get your children involved in writing the list whether it is groceries or other necessities. Allow the child to control the list on the shopping trip.
- Don't say things are OK when they are not. Your children will probably be aware of tension in the house, or will perhaps have overheard an adult discussion about financial difficulties. Take the time to explain to your children in a calm voice using simple language what the status is in the home.
