Money, it's a family Affair!

How to Make Money Management a Family Affair

Money is not often a subject spoken about around the dinner table in most families. Whether you grew up being shielded from discussions about money, or were faced with the woes of family debt, it is important now to show your children a healthy relationship with money. You can set them up for success by educating them on financial structures, being honest about your current status when it comes to money, and teaching them how to save for the future.

First of all, you’ll want to educate your children on the infrastructure and value of money. Don’t be afraid to let them in on your personal budgeting or bring them to the bank with you when you are signing up for a loan, or mortgage, or investment. Explain how jobs and salaries work, how often you get paid, and what it means to earn income based on skills and type of work. Talk them about times when you’ve had to make a choice between A or B, what your final decision was, and why. Showing them how you relate money to personal values will provide a good foundation for their own relationship with it in the future.

Secondly, be honest with your children about what you can and can’t afford when it comes to yearly school clothes shopping, birthday parties, and family vacations. Be supportive and empathetic when they feel frustrated that Sally or Billy has something they don’t have, and don’t compare your family to others. This sets up a want/can’t have tug-of-war that is hard to satiate as kids get older, and wants get bigger. Instead, help them see the value in what they already own and have experienced. You can also let your children help make the decisions on what to purchase or where to spend time, let them see the benefit of being able to make choices, and ultimately live with the consequences of those choices.

Lastly, besides popping the occasional coin into your child’s piggy bank, make a plan to save together as a family. Start a ‘family pot’ in a central area that anyone can contribute to and designate it for the special things in a child’s world like the next outing to the movies or family stay-cation to a local hotel or pool. You could set this up on a quarterly basis, letting each family member have a turn to decide what happens with that quarter’s savings. Share in their excitement and anticipation as the savings begin to grow while teaching them that sometimes the best things in life take a little sacrifice and planning.

Guest post by submitted by Carole Alves Cornell www.equippednonprofit.ca