Teach kids about finances and debt

Establishing healthy attitudes about funds start when children are young.

18:33 30 January 2014

Parents know that children listen and learn very well when they are young, and we tend to take that to heart when it comes to teaching children about drugs, smoking, and abusing alcohol. It is less common to find parents who have also done teaching about finances and debt. It is true you might not be able to get into great detail with young children, but even explaining to them that it is important to send on-time payments can make a difference in their views when they become adults. Here are some ideas to help you teach your children about finances and debt. 

 

• Discussions— the first thing you need to do is communicate to your children. You no doubt have been asked what you are doing when it is time to pay the bills. You can find age-appropriate ways to explain the process and healthy financial habits. You will want to make sure not to make children feel responsible for any financial stress or woes though, so it is important to focus on general information instead of personal situations. 

 

• Action— helps children learn by creating some play money and pretending there is a store. Children will need to compare the amount of money they have to the amount which is needed to purchase items. In this manner they will gain an understanding of finances and even a little bit about compromises. 

 

• Show by example—you can talk yourself through a spending decision out loud so that your children will learn about the process you use to be a responsible saver and spender. Comparing prices for the same item is a great way to show children how to be intelligent spenders. 

 

• Be humble—if you make a financial mistake and your children are older, it is okay to explain that you made a mistake and any consequences involved.