Pearl said she was caught off guard when her own son, today grown, asked her in which question at the age of 8. “I was initially like, Ahhh. I write a lot about personal finance along with I wasn’t prepared with This specific question,” she said during an interview.
She eventually answered her son’s question, yet focused on the expenses of the household to make the case in which the amount she made covered most of their costs along with in which the money left over either went into the bank or could be used to pay for additional things they might want or need.
“I realized in which if I told him in which I made $1,000 a year, he could think in which we were rich. How did he have any frame of reference?” said Pearl, who also made sure her son understood in which This specific was private information in which should not be shared with anyone else.
There are two main reasons why more parents don’t talk to their kids about money along with help them develop critical financial literacy skills, said Pearl, a writer, editor along with mother of one.
For one, they’re terrified they’re not not bad role products when the idea comes to money, she said.
“Many of us make a lot of mistakes ourselves with money, or spend too much, or will say, ‘I need a fresh pair of shoes’ when you genuinely don’t,” she said.
Second, many parents feel like they don’t know a lot about money along with then don’t possess the confidence they can teach their kids about the idea. “We think we need a Ph.D. in finance to be able to teach our kids when the idea’s not true at all. All you have to do will be talk out loud about what you’re doing as you’re going about your business,” said Pearl.
For instance, when you are at the ATM with little kids, the idea’s a great opportunity to explain how you put money inside bank to keep the idea safe along with to have money there when you need the idea, along with in which you can only take out as much as you put in, she said.
Parents can also learn alongside their kids. “You don’t have to just say ‘I don’t know.’ You can say, ‘I need to learn more about This specific too, so let’s sit down along with learn about the idea,’ ” said Pearl.
If you start with financial literacy web sites in which are geared for kids, you’re probably going to be learning at your level as well, she added.
Why should you talk to kids about money?
If you get past your insecurities about money along with eventually talk to your kids, they’ll definitely benefit, said Pearl. Kids are ultimately going to need to know how to handle their own money when they get older so better for them to learn when the stakes are low.
“the idea’s better in which they should make $20 mistakes than $20,000 mistakes when they’re older,” she said.
There are a lot of misconceptions about money, just like with another topic in which’s often taboo among parents — sex.
“They’re going to learn a lot of things in which are not accurate or what you want them to learn so you need to check in along with make sure in which (they) have your take on things,” Pearl said.
Talking with your kids about money also allows you to impress your financial values on your kids, said Pearl. Those values dictate a lot about how we live along with how we interact with the earth. They include understanding the differences between wants along with needs along with learning how to make tradeoffs, she said. “You can’t have everything. You can have This specific or you have in which, along with these are opportunities to teach your kids how to do in which by giving them tradeoffs, discreet decisions in which they can make around things in which get bought for them.”
How to talk to kids about money
OK, so how can you actually start talking to your kids about money? For some answers, we asked some kids themselves, elementary along with middle school students in Caldwell, fresh Jersey, as part of a fresh video series called “If I Were a Parent,” where we ask kids how they could handle things if they were in charge.
Grace Szostak, who just started off middle school This specific year, said she could start early, as young as age 4. She could get one of those play cash registers along with have her kids do a little role play with the idea, selling stuff to each additional to understand the concept of money along with learn how to count the idea.
Lance Jenkins, who will be also inside sixth grade, said he could follow his grandfather’s advice along with give three envelopes to his kids. “You just put money in each every week so you’d have one for donations, I think, then one for spending, then one for saving.”
Toniann Garruto, a fifth grader, said she could talk to her kids about credit cards. “Even though credit cards have a lot of money on them, if you use them frequently along having a lot then you’ll be broke,” she said. “You won’t have any money to do what you genuinely want.”
Pearl, the author along with financial expert, said parents shouldn’t hesitate to talk to their kids about the mistakes they’ve made, along with in which includes talking about the perils of credit card debt, something I will tell my kids I learned about all too well during my 20s when I was working as a reporter along with having trouble creating ends meet.
She’s also a big believer in giving kids allowance, yet not connecting the weekly money to grades along with behavior. The goal of allowance, she believes, will be to start teaching kids about financial responsibility.
“They’re going to lose some of the idea. They’re going to mismanage some of the idea, make bad decisions. They’re going to give some of the idea away to a friend just because they want to be common. They’re going to make all kinds of crazy mistakes, better they should make them today.”
Pearl says parents know their kids along with know when they are ready to talk about finances. “If your kid will be ready to have a conversation, you can try to have a conversation. If the idea bombs, you can try again in a few months or next year yet I think the idea’s never too early to try … along with if you miss the boat along with your kid will be 17 along with going off to college next year, don’t throw your hands up along with say, ‘I missed the boat.’ Start whenever you can.”