How to talk about finances with your kids
PARENTS should make money conversations at home as normal as any other family discussion, financial specialists say.
As technology gives children chances to spend more than ever, pressure is growing on parents to talk openly about finances, just as they do with school, sports and other extracurricular activities.
Smart Financial Solutions director Fatima Dib said normalising financial conversations “removes uncertainty and fear around money” and should be done as situations arose – such as grocery shopping – to maximise the learning impact.
“It is extremely important that parents turn their focus to teaching their children how to navigate the online world when it comes to money,” Ms Dib said. “The challenge is teaching your children the connection between what they see on the screen and real money.”
This could be done by showing their pocket money moving into online accounts, or moving out.
Ms Dib said there were also “some amazing apps now available” to help children manage money.
While raising her four daughters, Ms Dib explained things as she did them, “like ‘can you help me take out my money so I can pay for our ice cream’ or ‘let’s go collect the letters from the mailbox – there might be a letter in there telling me how much money I need to pay for the water we have used’”.
Rise High Financial Solutions managing director Marissa Schulze said children should be involved in family financial discussions much younger than most parents thought, so they could understand what pushed household bills higher or lower.
“Sit down and talk about where they want a family holiday this year – talk about the options and what they cost, and if it’s a big goal what can the family do to save money,” she said.
“Make it part of the everyday chat. It will be normal for them that managing money is something they have to do, like learning to fold clothes.”
Ms Schulze said children today could make purchases online without realising they were spending money, while cashless canteen systems in many schools also made it difficult to realise how much they spent.
Having phones before they hit high school is another issue that is both a potential problem and a great learning tool.
Ms Schulze said parents needed to boost their own financial confidence to pass good habits to their children.
“I think people in general are scared to talk about money – many people aren’t even talking to their spouses about it,” she said.