Reasons to Not Avoid Talking About Money with Your Children
Discussing money is avoided in many households despite other taboos around sex and religion being more openly discussed. However, discussing money with children helps them learn.
New research has found, money talk is one of the few remaining taboos as more than half of Australian parents avoid discussing their financial situation with their children.
Talking about money with young Children
A Suncorp study discovered that while the age of children was the biggest barrier for money discussions it was the attitude of parents that also interferes. 24 per cent of parents said they didn’t want to make their children feel uncomfortable, 24 per cent said the children were not interested, and 24 per cent said they as parents were not interested. Just one in 10 parents said they would disclose household salaries to their children.
Reasons to talk to your kids about money
Having discussions about money with your children can impress your financial values onto your kids. Those values dictate how they will live and interact with the world. These values include understanding the differences between needs and wants and learning how to make trade-offs in a world where we cannot have everything.
Discussions about money is also a good idea for children to give them an understanding of their family’s financial situation. MBA Financial Strategist Darren James says some parents worry how money may change their kids. However, the more you can keep things open, the better off you will be, but only do it if there’s a benefit.
How to talk to kids about money
CNN Financial Journalist Kelly Wallace interviewed school children to ask how they would go about things if they were in charge. This is what they came up with.
Grace Szostak, who just started high school this year, said she would start early, as young as age 4. She would get one of those play cash registers and have her kids do a little role play with it, selling stuff to each other to understand the concept of money and learn how to count it.
Lance Jenkins, who is in the sixth class, said he would follow his grandfather's advice and give three envelopes to his kids. "You just put money in each every week so you'd have one for donations, I think, then one for spending, then one for saving."
Toniann Garruto, a primary school student, said she would talk to her kids about credit cards. "Even though credit cards have a lot of money on them if you use them frequently and a lot then you'll be broke," she said. "You won't have any money to do what you really want."
Some Take away points
Be transparent — it breeds better decision making.
Start with stories about good, bad or funny financial decisions.
Express yourself and ask the children how they feel about money talk.
Make money conversations about being better rather than trying to beat yourself up.
Focus on the family’s long-term wealth and stability rather than individuals.
At Evolution, we welcome children into our office at times when their parents are meeting with our Advisers. Learning the importance of how to make the most of your financial situation is an important part of teaching your children independence and how to appreciate the work you as parents do to shelter and take care of them through financial stability and security.
Source: Suncorp & CNN Health