Explaining Difficult Financial Times To Your Child
By Patty Moore, blogger @WorkMomLife on Twitter!
As a parent, you want to protect your children, so you hide the bad from them. When you find yourself in a bad or stressful situation financial, you may end up lying to them about your finances as well.
Look, everyone faces financial difficulties, and it is also important to protect your child from certain evils in the world. However, failing to properly explain certain issues such as financial woes to your kid could actually hurt their growth. In fact, they could grow up ignorant of personal finance basics.
Instead of keeping them in the dark, you could fill them in on your decisions, obligations, and plans of action when you are working on bills or thinking about your finances. You don’t want to just crush them with a ton of knowledge, but if you do it right, you can make it a decent learning experience.
Below, we will delve a bit deeper into how you can talk to your children and what you should or should not tell them.
What You Need to Say
You may be confused about what to tell your children. Just know that you should be honest with your children, but do not tell them any more than what they need to know. If you tell your child too much, then he or she may worry about money, causing stress and anxiety.
Of course, telling your children about the situation is up to you, but if you decide to tell them, stick to a simple and brief explanation about the situation and how it is going to be handled. For example, you may want to tell your child that you need to save money for the next few months and to do so, communicating this effectively is a big step in the financial learning process
It can be hard to stay calm, especially in a situation where you know that you are already stressed out. If your child starts to ask a lot of questions, do not yell or become upset. They genuinely are taking an interest in what you are saying, but they may not fully understand. Additionally, calmly explaining a situation to them is a great way to teach them more than just finance; they learn through observation of your demeanor
Help Your Child Understand
Once you have explained to your child what to expect, it is time to help them truly understand it. There are many ways that you can do this, but it often works best if you show them as opposed to just telling them.
What this means is for example, if you only have $50 to spend on groceries at the store, take your child with you. If they are old enough, allow them to do the math when you are picking out groceries. Then, let them see how quickly the money runs out. Of course, do not actually let them just buy anything. You should guide them in a constructional manner. However, let them make the decisions, and once they realize how hard it is, show them how you plan to stretch that $50. Sounds like a fun lesson!
Get Them Involved
You can turn learning about personal finance into an activity, and there are a number of different ways to do this depending on how old they are.
One way is to bring your kid along for the ride when you’re paying bills. This doesn’t sound fun at all, but you could try making it fun for them if they are at an early age. This could help them with their math, and it could serve as bonding time when you are covering the utilities. In fact, if they’re excitable, you could make it feel like they’re responsible for the hot water in the house, just something to get them interested.
If they are a bit older, then you could ramp it up a notch with a more ambitious lesson. If your kid is a teenager, then open up a credit card in his or her name. This may sound risky, but if you do it right, then they won’t be able to spend above a certain limit. Give them some responsibility with the card, and you can see if they fulfill their end of the deal. This would be a great learning exercise for someone heading off to college.
You’re in Control
Remember, you’re in control of the situation, and you can make it work. Talk to your children and do not hide anything from them. You can show them what debt looks like and explain to them how credit cards are not a lifesaver. You want your children to learn the basics of finance now so they do not grow up and overspend or throw themselves into debt within the first few years of life.
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