Setting an example with good money habits, along with open communication, is the best way to start your children on the path to learning about money. This lesson will start the communication process and get the whole family thinking about the financial decision-making in your household.
Money problems can put a
huge strain on a couple's relationship and can often lead to the divorce courts. Good communication about money from an early age can help your child in his or her adult life to be open about money and talk about the issues and challenges that they face.
It is important that you discuss with your child the many financial challenges that are out there in the wide world. The ability to be open with your child about your money situation may be a challenge, but in the long run it will give them a better understanding of your financial situation. It will help make them aware of what you learned growing up or perhaps what you wished you had learned when you were younger.
The idea of discussing your financial situation is so that together you can see how money is a tool and a seed and to learn how it can grow (or die) depending on how you treat it.
As you discuss your financial situation with your child, it is important to caution him about sharing your information with others. He may find himself among other children who have different financial circumstance (either better or worse) and divulging your information may cause embarrassment.
Answer the following questions and talk to your child about them:
* Who taught you about managing money?
* How do you track where your money goes?
* What does financial freedom or financial wellness mean to you?
* What have you done about providing for your retirement?
* What was the worst investment you made?
* What was the best investment you made?
* What would you do differently if you could start again financially?
* What else can you tell me about how you manage your money?
Sylvia Bowden is the author of How To Stop Your Kids Going Broke, available from www.silbo.co.nz She has also written the New Zealand Household Budget Kit, available through bookshops and her website.
