All parents want the best for their children, and do not want them to worry about money. Even if they are struggling financially, family finances are rarely discussed.
Some parents may assume that their children would not be able to understand the family’s financial situation; or are concerned that they will tell others.
In fact, it is important for children to understand the financial situation of the family and to involve in the family finances, in order to help them develop the correct attitude and values toward money. Such conversations are also crucial for triggering money talks between parents and children.
Understanding household expenses
Rather than explaining the family’s finances in its entirety, parents can start with some basic household expenses, such as rental, utility expenses, internet fees and miscellaneous items. Parents can show them the monthly utility bills to give them a sense of the family’s monthly spending.
Recognising the family’s financial situation
A better understanding of family finances will give children a stronger sense of responsibility , leading them to treat their parents’ money as their own and spend prudently.
As children grow older, parents can get them to help with the household budgeting.
Suggested activity: Keep track of household expenses
Parents can encourage their little ones to record household expenses and prepare the budget using a simple worksheet. By updating the record together, children can have a clearer picture of what the money goes and how much is spent for various household items each month. This way, they will also be motivated to manage the spending in each area, learn to live within their means and spend rationally.
