It is not easy to be a parent. A lot of parents feel that they fight a battle between instilling the values that they have for their children and not trying to alienate those children from them at the same time. It is not an easy place to be for a lot of parents. It is best to start early with them when they are less likely to rebel against what you have to say. When you start working with them early, you can in fact find ways to encourage them to make the kind of decisions that you would make yourself. One area to focus on in particular is finances.
Discussing Money Matters
Younger children may not be all that interested in learning about good money skills. They might have some resistance to being taught about these things because the topic is likely pretty boring to children. In fact, there are a lot of adults out there who find it rather mind-numbing as well. You have to remember to put things in terms that children will understand. You also need to try to find a way to give it some flair.
Children like when they can relate what you are saying to them to their own world. Remember that the world of your children is likely very different from your own world. Thus, you must do what you can to make your lessons as universal as you can.
Borrowing And Lending
At some point in the conversation the topics of borrowing and lending need to come up. These are essential as they are a critical part of everything that we do in the modern financial world. Most people have experience with doing both activities. It is highly unlikely that your child will be that much different. They are going to have to figure out what it means to borrow money for a vehicle for example or even what it means to borrow money for their education.
A good parent will show their child how interest rates impact them. They will help educate them on only borrowing for the expenses that they really need in life. A good education is an example of good reasons to borrow money. Purchasing unnecessary gifts for yourself is not a good reason to borrow. These key differences are things that parents sometimes have to explain to children to help them understand when they are still learning.
When discussing borrowing to fund their education for example, parents need to explain how interest rates affect how much money you pay over time and whether or not you can refinance the loan to lower those payments if you need to.
Many parents neglect financial topics altogether when educating their children. They may feel that the children do not want to learn or that they personally do not know enough to speak intelligently on these topics. Either or both of these things may be true, but that should not stop a parent from acting responsibly and educating their children on the importance of money in their lives. It is very likely to cause a lifelong impact on the fortunes of that child. Make sure you consider these longer term factors before making a decision one way or the other about your educate your child on any particular topic.
This is a collaborative post
If you want to start talking to your children about money
Here are some excellent articles to read and links to helpful resources