Why is it important to talk about money with our children? As a society, we’ve come to understand that staying silent on the topics of sex and drugs can often lead to negative or unwanted consequences. The same is true for money.
Starting the money conversation early, and having it often, in an age-appropriate way helps prepare our children for managing their own money wisely.
Stay silent about it and you risk leaving your children open to the pitches of TV adverts and peer pressure. Much better for you to take conscious control over what they are learning rather than the bombardment of advertising or negative portrayal in films and the media.
Theresa Harezlak, a financial adviser with Savant Capital Management and a mother of two, says the biggest money mistake that parents make is silence.
“Every time my kids go outside I tell them to be careful crossing the roads and do not talk to strangers, but we never talk about money. In reality”, she says, “the chances of her kids being abducted are very low, but the chances of her children using money are certain”.
Theresa Harezlak
Staying silent about money and you risk leaving your children open to the pitches of TV, adverts and peer pressure. Much better for you to take conscious control over what they are learning rather than the bombardment of advertising or negative portrayal in films and the media.
For example think of how many films or TV shows have the arch villain as some kind of reclusive billionaire. In fact how many positive examples of rich people can you call to mind?
In my view, too many parents don’t talk about money with their kids at all. Others skirt topics they don’t know much about, like investing and debt. Parents are the main source of money information for children, but 74% of parents are reluctant to discuss family finances with their kids, according to the 2014 T. Rowe Price Parents, Kids, and Money Survey. That’s a big shame, because ignorance about money can set up your kids to make bad decisions — and eventually pass those bad habits on to your grandchildren.
The solution: Make financial literacy a family value
In her book, Do I Look Like an ATM?: A Parent’s Guide to Raising Financially Responsible African American Children, Sabrina Lamb details “the business of your family household.” Lamb, says all families should work together on five financial topics: learning, earning, saving, investing, and donating time or funds to causes you value. She recommends a daily diet of business news, occasional meetings between the kids, your bank, or other financial advisors, and support of your older kids’ entrepreneurial goals. This might be a bit idealistic for many but using the news or an online article as a stimulus for a conversation about money could be a good start.
Even if money is tight, don’t
stress about it in silence.
When parents are worried about money but are not communicating their financial situation, children pick up on the anxiety and associate it broadly with finances. Rather than learning money lessons from their parent’s mistakes or particular situation, children instead learn that money is ‘stressful’ and ‘bad’.
A 2013 Study by Cambridge University for the Money Advice Service revealed that our money values and habits are formed in childhood often before the age of 7. If a child is growing up with the programming that money is stressful and bad what are the chances that they will ever make any as an adult?
This is why the primary goal behind The Financial Fairy Tales books is to help spread positive, empowering messages about money to children and counteract the negative bias they may be exposed to elsewhere.
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