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kids + money

kids + money

For some parents, money is a topic that is openly discussed with their kids at the dinner table. For others, its something that is never brought up for fear that kids are 'to young' to learn the basics. Or parents just don't bother because its such a sensitive subject or they wait until their headed for college.

Personally, I think a lot of that is just BS. Let me explain why.

Simply put, the money habits children develop when they're young can shape their financial future. That's why it's important to set them on the right path early on. Of course, you want to be practical about what age you think this should happen and what they should be learning. If your child starts asking for certain things that cost a lot of money or if they're old enough to do small chores and help out around the household, earning a small allowance, then they should know some basic fundamentals about how money works.

In my humble opinion, kids are never too young to learn about the basics of money (within reason, of course) and its up to parents discretion as to what they want to teach their children and how much to share, at a certain age. Some parents are ok sharing confidential information like much their bills cost or how much they make. Others would rather be more discrete (my parents were). Whatever your comfort level is, kids will appreciate your honesty and the fact that you're trusting them with this information.

I WISH I knew even a little bit more about money as a child, having gone through what I did as an adult (hence, why the Smart Cookies were born). I'm living proof that a kid can grow up with delusions about money - what things cost and what one can afford - and having been fairly spoiled, I ended up knee-deep in debt with collection agencies chasing after me (there was a time when I was seriously considering changing my phone number!). Shit happens and boy did I live through it.

Let's not beat around the bush: children can get used to how they live comfortably, and if the topic of money is never broached or if parents never discuss with their kids on what it really costs to live the life they have become accustomed to, there is no baseline for them. Children watch how their parents spend, save, invest and give money and therefore assume they can do the same. That anything is affordable and therefore, turning them into the you-can-buy-me-what-I-want-when-I-want-it mentality. If their friends have it, then they must have it too. It's never a need, always a want.

For example, teaching kids about credit scores in junior high or high school may seem early but it isn't and is needed now more than ever. That 3-digit, golden number affects whether or not they can even get a phone plan in their own name, a car loan and one day, a mortgage for their first house. But how do we expect them to know this if they aren't given the skills at an early age? A 2012 study by ING Direct found that an astounding 87% of teenagers say they don't know much about personal finance. They want to learn, but they don't necessarily have the tools.

So, why not give them the tools to empower them and to know better? As Oprah says, when you know better, you do better. 

As a first time parent, my spouse and I not only talk about our finances all the time (why wouldn't we? We're both contributing to the household and we're very aware that money is one of the reasons some people divorce), but we're 100% on the same page as to how our baby boy will be informed and educated on money. If there is one wish we could have for him, it would be for him to understand money and get off on the right foot in life when it comes to his financial health. I see so many parents these day buying expensive technology, $200 jeans and even cars for their kids and in most cases (not all), the kids or parents don't even bat an eye. The cost is irrelevant and if their willing to buy it for them, then why would their child even bother asking if its something they can afford. Heaven forbid we upset our child because mom and dad can't always buy the latest and greatest gadget.

Having the money conversation doesn't always guarantee that your child is going to grow up with stellar money spending skills. Some kids just need to go through some financial turmoil to really understand and appreciate what money is and how to treat it (case in point: ME fifteen years ago!), but if you can get them off on the right foot, make them curious to want to know more, get them asking questions, than it's worth its weight in gold.

 

 

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