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Kids and money – part II

by Tim St Vincent

Last month we talked about kids and money and this month we will continue that conversation. We talked about how children learn a lot of their money habits at home – not so much as a result of active instruction from the parents, but rather from passive observation.

I have a friend who learned how to handle money by not doing what his father did. His father had a job that didn’t pay very well, and he didn’t have much of an education on how to handle money. When his dad would get paid he would cash his cheque (this was back in the day when people were paid by actual cheques!) and put all the money in a big green bowl in the kitchen. When a bill would come in he would pay it from the “money bowl.” When the bowl was empty the bills stopped getting paid. Not a great system.

Even at a young age this caused my friend a lot of stress and tension around money, about how bills get paid, and being able to pay the rent. His family was very stressed about money and it became a topic that was never discussed. That was a hard lesson for him to un-learn, but as he got older he realized the only way to get better at handling his finances was to talk to others about money. He learned to budget by not following his dad’s example. His father isn’t at fault here; he probably didn’t know any better and was never taught any better.

This brings up an important point. How do you feel about money, what “money message” are you teaching your children, either actively, or by them watching how you handle money? Are you okay with how you feel about money? If you aren’t happy with your relationship with money, and what you may be teaching your children, how can you change it? Well, let’s answer that question with a few more.

Have you actually talked to your children about money, how they handle it and how they feel about it? These are all very important topics and conversations for parents to have with their children. By having these conversations with them you will get a better idea of their relationship with money – what you have taught them, and what you have not taught them. This will in turn help you clarify your relationship with money as you see it reflected through the eyes of your children.

One of the most important money lessons to learn is that we all make mistakes with money. I did. I made a lot of money mistakes. As a young 20 something I used to use credit to pay credit. I was late making payments or skipped them altogether. Student loans were used to help me go on ski trips during “reading week.” I made all the classic mistakes, but eventually I learned from them. Don’t be shy about sharing your money mistakes with your kids. They can learn from them the same as you. The really tough part here is that while you need to share your mistakes with them, to guide them and give them advice, you also need to give them room to make their own money mistakes.

As part of breaking the money taboo, it is important to share your money successes as well as your money mistakes. Let your kids see the bills. Show them how they are paid. Here comes the scary part – let them see your pay stub. Let them see how much you make, how much is taken off for taxes and other items. Let them see how much is left after deductions and how that amount flows through your budget (you do have a budget, don’t you?), how you create savings and how those savings are used to pay for holidays, cars, education and other items.

Money doesn’t have to be a big scary topic. It should never be a taboo topic. We all live with it, we all need to learn about it.

This has been a fruitful topic, so I will carry it on into one more article. Next month I will talk about how to set up an account for your child and the different types of things you can teach your children about money by their age group. Until then, spend wisely!

If you have any topics you would like me to discuss in future articles, or comments you would like to share, please contact me at tim.stvincent@nomoredebts.org.

Tim J. St Vincent is a retired CFP and is a Certified Educator in Personal Finance with the Credit Counselling Society, a Non-Profit organization. If you wish to contact the Society for further information, assistance or to attend a webinar, please call 1-888-527-8999 or visit www.nomoredebts.org or www.mymoneycoach.ca.

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