A recent story in Time Moneyland analyzed a study that found parents are terrible financial role models. The study reveals only half of the 1,008 parents surveyed regularly set aside money to save. That’s definitely not behavior kids should be imitating! Parents also said it’s easier to talk to their children about drugs, smoking, and bullying than money. I share tips below to help you talk to kids about money.
1. Use teachable moments – Though I’m not a parent I have a younger sister who I look after and try to instill good money habits. The trips to the mall, grocery store, and ATMs are always a good conversation starter. Try to talk to your kids about money decisions without sitting them down to have a talk.
2. Be an example (even if it’s not a good one) – One of the main reason parents don’t talk to kids is because they feel they’re not qualified to hand out financial advise, the study found. I’ve muttered the saying do as I say and not as I do a few times. Even when I’ve messed up like charging my coffee on my credit card, my bad example has helped my sister realize there are consequences. Sometimes they’re costly and sometimes it means you just can’t afford a new pair of jeans. I casually mentioned – er – complained about paying interests. This got the conversation rolling and she now knows credit cards are not free money.
3. Don’t lie about money – Older kids know when they’re being lied to and this brings up issues. They may think you don’t trust them or worst that you don’t think they can handle the truth. Keeping kids in the loop about your family’s finances will make it easier on you when they start asking for expensive items. Note: You don’t want younger kids to worry about money so reveal as much as they can understand for their age.
4. Set goals as a family – Get your kids involved in planning and saving for family trips and college educations. This will help them understand how much goes into organizing a fun activity and preparing for college.
5. Let them get a job – My first job taught me a lot about money and what I wanted to do in the future. Allowing your child to get a part time job when they are old enough can help you teach them about managing their money. If you’re able to give your kids an allowance the same is true.
Finally, if you don’t feel confident about your financial literacy don’t shy away from seeking help. Ladies, this is particularly important as kids turn to mom first to talk about money, according to the study. Who does your child turn to when it’s time to talk about money? How do you teach your kids about money?
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