We want what’s best for our children, but when it comes to finances, how can we help them? Some say you should give them an allowance, but others say not always. How much financial information should you share with them? Should you tell them how much you make?
These questions and more are answered by expert Susan Goldberg at Advisor.ca in her article which you can read here. The biggest point Sarah hammers home is that children are always watching. Every time you swipe your credit card or every time you donate money, your children are always observing and learning about how to manage money. Talk about money with your children! Less than a third of parents actually talk to their children about money, and this forces children to form their own opinions without the full picture. Don’t just talk to them, but involve them as well. If you are donating money, help your children choose a charity. If you are buying something new for the family, let them help you find the best deal.
In our world today, it is hard for children to understand the concept of money when they never see it coming in and only see their parents paying with a plastic credit card. Reader’s Digest suggests that you take the time to go to the bank with your children to show them that you must put money in at the bank and not just take money out. Among other suggestions in this article, one of the other most important things you can do is to use the right words when talking about money. Eliminate the phrase, “We can’t afford that” from your vocabulary. It implies a lack of choice, whereas the phrase, “I choose not to buy that so that we can save for a new television next month”, helps teach children the importance of prioritizing our purchases and saving for the future.
While there are many things you can teach your children about finances, the most lasting lessons will be taught by your example. Incorporate these four practices into your life and your children will be prepared for their financial future.
1) Keep to Your Values – Ensure that the things you are purchasing while your children are watching are in line with your values.
2) Talk – Take the time to talk to your children about their finances as well as yours, when appropriate.
3) Visit Banks – Show your children that you put money into banks, not just take it out.
4) Make Choices – Use words that suggest you are choosing not to purchase something rather than saying you cannot afford something.
You’re probably already doing some of these key things, but with increased awareness they can become more powerful teaching tools for you as a parent. There are many things to consider when raising children in our busy, hectic world, but by being a good example of responsible finances, your children will be more prepared for their futures.
Lifeplan Financial is a locally owned Managing General Agency (MGA) in Victoria and we work hard to give advisors the tools they need to succeed across all of British Columbia. We give our advisors the independence they need with the support they deserve. “Because Your Success… is Our Success.”