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Talking to your child about money and your debt is a good thing, although many feel like they are corrupting their children by doing so. This short guide will give you a few ideas on how you can break the family debt spiral and stop your children repeating your financial sins.
In my experience many people who have debt problems try not to let on to their children that they are in financial trouble. The consequence of this is that their children make unfair financial demands on their parents to have the next must have item. This is not the child's fault as they are constantly bombarded with marketing from the TV to the playground. Unfortunately by giving into their demands does not only create financial problems for the parents but teaches their children bad financial behaviour which will create future problems.
We are not helping our children by shielding them from the reality of your financial situation. I am not saying you should be blunt with your children and tell them your financial predicament. But by being more honest and realistic with your children about what you can and can't afford will help your children understand you and the world a bit more. If you don't talk to your children about debt problems or help them understand finances better how else will they understand?
It is inevitable that your children's understanding of money and debt will come from you. So if you can get your own financial house in order, the better the chance that this will rub off on your children.
You don't need a lot of money to teach your children how to manage money sensibly. Parents who bring up money wise children obey six simple rules:
Parents should discuss with their children the issues surrounding earning, spending, saving and investing money, in such a way as they understand that money brings responsibility. Parents don't need to actually tell their children how much money they earn but they do need to make them aware that there are things which they cannot afford, no matter how upsetting this is to their children.
By setting your children financial boundaries you are helping them understand that there are financial limits to what you or they can afford and that they must work within these limits. An example of setting a financial limit is fixing the maximum amount of money they can spend on a desirable item eg a toy or sweets. Many parents find it difficult to say no to their children's demands but it is key to helping your child understand that there are things that they just can't get. Perhaps a softer form of No is explaining to your child that the can have a desirable item, not just now but at Christmas or at their birthday. This softer form of No should not be replaced by No as your child may be think that they can get everything they want.
A key aspect to your child's financial development is that they understand at an early age that money brings responsibility. This can be achieved by talking to your child about the household budget, savings and investments, income and debts. This will help your child better understand the reason behind your buying decisions which directly and indirectly affect them.
In today's throw-away society respect for what you own is diminishing. Smart parents will teach their children the shrewdness of owning and respecting quality things and looking after them. It is also important to teach your child that spending money on things they don't need or don't really want is a waste.
Spending is not recreational activity. Wise parents treat shopping as a chore, an activity that serves a purpose. Some people buy gifts or treats as a way of saying I love you. Top thrift tip- tell them I love you, it is much more effective, genuine and cheaper.
It's trite but it's true, the best things in life are free. The best fun I had with my parents was when we were together as a family relaxed and everyone enjoying each others company. Play with your children, dig out their unused toys and play with them. I will guarantee that they will remember you playing with them before a trip to Burger King or the cinema.
The key to bringing your child up with a healthy attitude to money is to lead by example. As with everything your children will copy and reflect your attitude to money. What I have suggested is not a major life change but to recognise the negative elements about your attitude to money and change them before they have an impact on your children's future.
If you are experiencing debt problems visit our debt forum for support and guidance from people who have "been there and written the book".
Written by TweagDebt Management Options Hope is not lost for those who have debt problems. There are several solutions to your debt problems.
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