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Family Finances
How Much Should Your Kids Know?
By Gina Roberts-Grey, LCSW
Discussing your family's finances in the grocery store or when a friend is over creates an uncomfortable and awkward situation for everyone. Saying, "I'm not comfortable talking about this in the store. Let's wait until we're in the car (or at home, etc.)" rebuffs your child's insistence to purchase items "not on the list" without making his ideas or input seem insignificant. Avoid discussing money and finances when you're feeling stressed or taxed to reduce the chance of everyone becoming overwhelmed.
Establishing an allowance or chore reward system offers a clear plan for children to follow and develops an accurate perspective of money. A chart posted on the fridge or in a high traffic area lets kids know their job description as well as monitor their performance review. A child can see that performing tasks efficiently and to the best of his ability can earn a bonus. Remember, allowances do not have to incorporate a monetary payment. You can offer a movie rental, one "chore free day" for every two weeks of work, the chance to plan the family's weekend menu or a variety of other creative options.
Creating an "account" for your child to drop slips of paper or tickets into for each successfully completed task further helps him understand saving. For example, when he's ready to "purchase" a chore-free day, his monetary allowance or a video rental, he'll understand the consequence and correlation of earning, saving and spending.
Preserve a Clear Perspective of Money"It is important that children grow up with the understanding that money and material items do not necessarily equate to happiness, social status or worthiness as a person," says Vaughan Langille, a certified financial planner and vice president and investment advisor of CIBC Wood Gundy in Ontarioville, Canada. "Children should know that money provides the option to purchase items and objects without becoming fixated with tinking that it represents who they are inside."