How do we teach our children about money? How do we go about teaching our kids how to handle debt and credit?
One of the most frustrating questions a parent has to put up with is: “Why can’t you buy me this…?” I once answered naively that we couldn’t afford the toy, to which my bright child said: “Just go to the ATM and get money.”
Adults have trouble managing money and understanding Economics 101, so imagine a 9-year old trying to master the subject of family finances. Of course we, the parents, make things more difficult by being evasive or lying shamelessly.
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Be Frank About Your Money
The rivalry among children and teens makes things more complicated due to the sometimes great disparity in incomes. If Johnny just got an expensive cell phone, what do you say to your daughter when she asks for one too? If you keep saying that you can’t afford it and that same week you buy yourself an expensive leather coat, your child will know that you lied. It pays to be frank and honest with the kids whenever you refuse to buy them something. “I decided not to buy you a new cell phone because the old one works very well” makes perfect sense even though your daughter will be disappointed. At least, she knows you did not lie.
Answering Your Children’s Money Questions
Should your children ask more specific questions about your salary or the cost of the car, your best bet is to be quite open about it. “How much do you make at work, Daddy?” may cause some jitters in some people. If you evade the answer, they will think that there is something wrong.
Your best approach is to adjust the answer to their age, while giving the basics in such a way as to initiate their financial education. If they tell you the next day that Johnny’s father makes twice as much as you, don’t take it the wrong way, i.e. feeling attacked or developing an inferiority complex. Look upon it this way: it would be great for our kids to reach an understanding of our national economy and the role each person plays in the distribution of wealth.
Kids and Money: Dealing With Money Issues
The famous topic of insufficient allowance nags at the heels of all parents, whether wealthy or simply middle-class. And yet earning money and spending it is at the core of learning how to handle our personal finances. It’s an opportunity to teach our children responsible behavior, even though some of us have maxed our credit cards.
How many middle-aged parents see their kids returning from college and staying at home? This happens more often these days, due to the enormous difficulties our children may be experiencing with finding jobs. But who is going to pay for the student loan? And who is going to finance Johnny while he stays with his parents, getting up at 11 o’clock and going to parties all night? How do you convince your 23-year old that it’s time to become independent?
How To Talk To Your Kids About Finance
Talk to them, but don’t lecture them. Young adults hate to listen to a sermon; they feel (wrongly so of course, but they don’t know better) that they can make their own decisions. Listen carefully to their arguments (excuses?) as to why they’re unable to find jobs, and offer advice on the topic. Explain that you can’t afford to pay for their expenses for much longer. Surely it’s painful for both of you (especially for Mom), but the end result is worth the effort: their autonomy.