Money continues to be a taboo topic among friends and strangers, families too are sometimes hesitant in discussing money issues with their loved ones for fear of judgement or gossip. Money has become an important part of our society and it’s difficult to get by without it, unfortunately it is a topic that is rarely taught in schools or homes, especially where money is scarce. Parents should be the initial source of information when it comes to learning about money, and they should teach it at an early age.
1 – Discussing money with children gives them a better financial start in life. Regardless of whether you are rich or poor, talking about money and how it works is important. Children always reach out and want their parents to buy them sweets, toys and other things without giving a second thought as to where the money comes from, they simply assume that it’s always there. Talking about money can start at an early age, even before they start school. Parents should tell them where money comes from, how it is accumulated and how easy it is to spend and be left with little. Children should be aware that the weekly or monthly income is broken down into taxes, Medicare and retirement funds and what’s left over goes to the income earner who than has to divide the smaller sum ones again and pay the electricity and phone company, leave money in the shop for groceries, make loan repayments and try to save a little bit for a rainy day.
2 – Teaches them better money management. Receiving the first pay check is an exciting moment. It’s a large sum of money that may not have been seen before. If children have been taught about money, than they are less likely to spend the entire amount on silly things but put a portion away into a savings account and continue to do this throughout their life. They can also save for things that they want and delay gratification. When they know what having and not having money means, they are more likely to value it for what it is and know how to manage it to best suit their needs.
3 – It will help them make better decisions as consumers. Living in a consumer driven society makes it difficult to save money. There are so many things we want and think we need that spending has become the norm. It’s the parents’ responsibility to teach their kids that just because something is available for sale doesn’t mean they need to have it. By teaching children about shopping decisions, they are more likely to waste money on unnecessary items. Parents should lead by example because that is the best way children are going to learn.
Parents need to talk to their children about money from an early age. Simple things like earning and saving can be taught even before children start school. If money is discussed in the home children become aware of how money works and how it should be used.