We have all struggled with our finances at one time or another, and I worry how my children’s financial lives will proceed. I want to spare them the trials and tribulations of my experience, but I wonder is that really the right thing to do?
I want my children to be financially savvy, so I think one of the best things I can do is share my financial knowledge with them, even if we have to learn together at times. By helping them attain financial aptitude and the urge to learn more, it may well help them make smarter decisions when they are adults.
My parents played a big part in my financial education in many ways. It’s thanks to them that by the time I took personal finance in high school, it was mostly review.
Get your child involved: I remember sitting with my father on weekend mornings for many years, watching how he balanced the checkbook. Finally, when I was a teenager, he let me balance the checkbook under his guidance. When I had questions about any check or charge that appeared in the account he answered, despite some reservations, I’m sure, of whether a teenager could handle the information.
Mom and Dad always took their kids to the bank when they applied for loans or talked to the tellers. It was a different time then and barely anything was automatic or electronic, so the process was long and excruciating for kids. I now realize that thanks to the childhood exposure, I am less nervous should I need to talk to the banker for a loan or other financial expert face-to-face.
Shop with them and explain what you’re doing: When Mom headed back to college, finances were even tighter than usual, of course. Our family shopped at all the canned food warehouse stores – especially the ones where the shopper had to mark the price on the can with a grease pen.
Thanks to all that shopping, Mom and Dad were able to talk to us about why they bought one product over the other. In fact, one of the greatest things my parents introduced me to was unit pricing. That magic number on the tag below the product showed the true value of what you were getting as compared to a similar product. I find that unit pricing is especially important now that producers are shrinking their packages to save money.
Crisis? Be honest with your kids: Age-appropriate honesty is the key. When Mom was in college, we had many talks about why we couldn’t afford something. Times were tight, and it finally sunk in, thanks to their patient responses. I find myself now saying similar things to my kids, “No, we can’t afford that gigantic Lego set today. That set is really more appropriate for a birthday or Christmas.” It will sink in someday for my kids too, I’m sure. I know these questions are helping them learn the value of money and the products it can buy.
Be a sounding board when they’re older: One of my friends relies on her mother as a financial sounding board. Since they run their family business together, they need to discuss finances anyway. However, her mother is always giving good advice about where to invest money and whether she should buy another rental to add to their little empire.
My father, too, is a great sounding board. He advised us to continue sending our children to preschool even though we were going through a financial tight spot. He advised, “This is the time when their educational experiences will be formed. You want to make sure it is consistent and meaningful.” He certainly was right, and that advice has gotten our kids off on the right foot for their schooling.
Teach them to be curious: Even though these sound like small ideas to share with our kids, my parents’ openness with their finances has made a world of difference to mine. I developed a curiosity about financial matters and saving money that I might not have otherwise. I hope I can do the same for my children.