In these very uncertain times conversations about money have been even more important. We are often at ease talking to our partners or parents about our finances, but what about our kids? Knowing how to talk to your kids about money in a way they will understand is important, especially when they pick up on so much you say.
My top three tips when talking to kids about money include:
- Kids attach emotion to money. Conversations around it in the house can be positive, negative or even heated. The curliest questions are the emotional ones which there often isn’t an easy answer to. Like it or not, your kids will grow up to be very similar to you and their other parent. So the absolute best way to teach kids to manage their money well is to manage your own money well.
- Kids understand what they know. So if you’re having trouble explaining why things are tight, use concepts they are familiar with or like. Ice cream or popcorn can be used as examples when talking about how much things cost. For the bigger picture, pointing to their friends and how ‘everyone’ is facing the same challenges will help them understand it is not just their mum and dad, but more of a universal issue.
- If being open about money is the norm, then when things get tight, it won’t be a shock to your kids. They will understand. If this isn’t the norm, my advice is to explain, explain, explain.If you can’t afford a larger purchase right now, talk about that, don’t hide it. Provide a commentary to go with what the kids are seeing. Over time, you will be struck by how well they absorb the lessons you are teaching.
