From the community

Tips on how to talk with your child about money

Posted Sept. 06, 2012, at 8:24 a.m.

As our children grow up, they start to ask many questions. You entire day becomes like an exam at school. Wherever they look, there is a new object they have a question about. Your task is to be as informative as possible. Provided information has to be correct and meet the age of your child. Wrong and incorrect answers may lead to bad consequences in future. That is why be careful and think over before replying.

Today we will speak about so-called “money questions”. You do not have to be all that honest with your kid about financial problem or maybe financial success you have. Children need to know only the major information without extra details.

The most common question you hear from your little child is: Dad (mum), how much do you earn? Tricky, don’t you think so. Your kid is too little to understand what 50 and what 500$ are. There is a big chance 500$ would sound like a fortune to him. And there you go, the next day everybody thinks that you are a millionaire according to your kid. Nobody needs this kind of popularity. So the best answer would be: “I make enough money to take care of our family needs (you can mention about healthy food, quality clothes, etc).” It’ll help to present your family values. As for telling the truth, you will understand it from your child’s maturity.

Another tricky situation you can get in is when your children can overheard a conversation about the online payday loan for example. It does not really matter if it is your debt or not. The most important is to make them feel secure. Without naming exact amount try to start your explanations from telling what debt is, how it can influence life, what things should be done about it. Very important to say that in case a person finds himself in debt, he needs to work hard to pay it off.

Most likely your child will start noticing that he has let’s say bicycle while other kid next door doesn’t and vice versa. Never compare your family with another one. Better try to explain, that your family might have different goals (such as saving money or maybe spending them things according from your family needs).

Talking about investments might be a little too early for children. It is preferable to give a definition of such terms as: saving and budgeting, then credit and debt.

And at last, there will always be financial ups and downs. Experts insist we do not share this information with our children. Just simply tell them that you will be doing a little more saving than usual and as a result you will go out less and maybe do less fun things outside. The right time for sharing the truth about losses is when your child of working age and a big chance will need to take apply for loan for his further college.

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