How often do you talk to you children about money or your personal finances?
It’s likely not surprising that the subject is one of the least discussed issues between parents and their children.
But, according to an expert from Envision Financial, a division of First West Credit Union, it may be one of the most important life lessons parents can share with their kids.
While the topic of finances may seem daunting, Natasha Reid, assistant branch manager at Envision Financial in Cloverdale, shares that it may not be as complicated as it seems, and that it may just be a matter of getting into a habit of starting those conversations.
“We visit a lot of elementary and high schools as part of our outreach and we’re seeing this gap in our youth in really understanding what it means to manage their personal finances,” said Reid. “I know from personal experience that money was not talked about in my home when I was younger. In fact, I ended up teaching my family on how to run our finances after I got into the industry. Often times, it’s not because people don’t want to talk about it, but rather, they lack the confidence or are afraid to admit they just don’t know at a certain age.”
Getting involved is key
“Kids are as much a part of the family as the parents” said Reid. “So it’s important to get them involved in day-to-day tasks like budgeting. Don’t be afraid to talk to your kids about how much things like groceries, gas or bills are costing each month. It’s important to explain to them how much something costs and how that equates to how much work it will take to buy or pay for it.”
Reid added that taking children shopping and talking to them about how you are making the purchase is also important.
“If you’re buying something with cash, count it out with them so they understand how it all adds up. Or, if you’re paying by debit or credit cards, explain to them how it works so they don’t think it’s just a ‘magic card’. Since no cash is transferred, it can be difficult for kids to grasp the concept.”
Support their financial dreams
“People can often be a little pessimistic when talking about their financial situations,” said Reid.
“We say things like ‘Oh, with the economy going the way it is, my kids will never be able to afford their own home.’ But quite often this negative outlook isn’t helpful or productive. We may all be in different places financially, but that doesn’t mean our kids can’t save enough to buy something they really want in the future. We want to encourage them to work towards something and a big part of that is to support their dreams along the way.”
Be transparent and honest
Reid said one of the best ways to overcome this is to be open and honest about this lack of knowledge and to go into your financial institution as a family to learn about your finances.
“We certainly encourage our members to come into the branch with their children so that they can be a part of the process and start to understand it for themselves,” she noted. “We find that the younger kids are when they are exposed to this, the more interested they are in learning more about it, and the faster they get into the habit of savings, which we know can have far-reaching benefits in life.”
Learn more at envisionfinancial.ca.