Talking to your kids about money is not always enjoyable. They might not understand that you have to work hard to earn it, that you can’t spend all of it and that some people will always have more than you. The conversation isn’t fun, but it’s necessary. Here’s why you need to talk to your kids about money:
Kids Will Follow in Your Footsteps
Kids are like little sponges. They absorb everything around them. So, if you have any financial habits that you don’t want them to copy, you need to teach them new ones as early as you can. Otherwise, you might watch them grow up and make the same mistakes that you did.
How can you break the cycle of bad money habits? First, you can talk to them about money. Teach them about good financial habits like saving up for a goal, resisting impulse purchases and not spending everything they have. The more that they soak up these lessons, the more likely that they’ll take them to heart when they’re older.
You also have to set the example. You have to try your best to address your money problems so that they can see what a responsible adult does with their money. So, if you have a lot of debt, you shouldn’t ignore it or hide it. You can see a licensed insolvency trustee to ask if you need credit counselling, a consumer proposal or personal bankruptcy to get to a more stable place. Click here to see the difference between a consumer proposal vs bankruptcy to see which debt relief option will be more useful for you.
As the saying goes: show, don’t tell. You don’t have to tell your kids all of the details, but you should let them see that you’re acknowledging a problem and working to solve it.
Kids Learn from Doing
People don’t blow out the candles on a cake on their 18th birthday and suddenly know how to be financially independent. They need to learn how to make good decisions with their money early and then carry those lessons into adulthood. There are lots of small, simple ways that you can teach your kids financial literacy without them even realizing it.
Age 3-6:
- Use fake money during playtime.
- Let them start a piggy bank where they can save loose change.
Age 7-12:
- Give your kids allowance money every week or so
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