A number of financial surveys have recently been conducted with results showing that approximately 50% of parents avoid discussing economics or finances with their children because they consider it to be unimportant or too complicated.
However, talking to your children about money needn´t be difficult.
If it´s true as the saying goes that 'money talks', then as parents, let´s start talking. Below are some helpful guidelines on how to start and keep the discussion going with your children:
Get off to an early start
Start educating your children in finances from a young age. Using everyday examples and situations, your child will have a better grasp of economics on a level that they can easily comprehend. In time, you'll be able to explain more complex things such as saving money for college or buying a house.
An early start is one of the most important things when it comes to helping your child understand finances, as it sets the foundation for how they will handle money in the future.
Teach your children to set goals and long-term saving plans
We all know that children always want new things, be it a new pair of sneakers, the latest video game, or whatever the cool, new buzz gadget may be. So, why not teach your child how to save their own money to purchase some of the items they want? Explaining the cost of an item and showing your child how much he or she will need to save each week is not only practical but also gives your child an appreciation of cost and money management.
Explain how a loan works
Children may not understand that your family has financial obligations, such as a loan or mortgage. Let your children know what obligations you have and how they work. If you want your child to learn what a loan is, let them borrow some money from you and show them how repayments work. For older children, you can also include interest rates and have them pay you back a little extra.
Make use of financial themed games
Using a game or activity to explain the ins and outs of finances is a helpful tool for parents who are hesitant to talk to their children about money. Every child wants to have fun, so take advantage of that and engage them with games like Monopoly or applications with monetary themes, which will help you educate your child in economics.
Your child's future is the most important investment you'll ever make, so start today.