When financial times are stressful for parents, children feel it. Knowledge is power, particularly when the information is given age-appropriately. Children need the "money talk", in the same way they need the "sex talk". They need to understand the basics; they need age-appropriate answers to their questions and they need to be prepared to handle real-world situations that may challenge or confuse them.
What are the "money" basics?
- People pay for goods and services in stores, restaurants and at home.
- People make choices about spending money on things they need and things they want - and the two are different.
- Size and quantity are relevant to value. However, one large item may have more value than two as small items or a very small item may have more value than one large item. Experience and developmental thinking are critical.
- Mommies and daddies get paid for working. Different jobs have different financial value.
- Credit cards are not free money. ATM's and credit cards are connected to deposits in banks.
- The amount of money you have to spend is always less than the infinite choices of how to spend it.
Money-talks with children should begin in the preschool years and continue throughout high school. Watch best selling author, David Bach, describe his early experiences in this helpful video. His father gave him the change from his pockets each day for his piggy bank. Then, the money was taken out and divided between spending, charity and savings. On an ordinary visit to McDonald's, his grandmother prompted him to ask the manager if McDonald's was a publicly traded stock. And nightly dinner topics included discussions about the family business: the kids knew, in age appropriate ways, when the family business was doing well and also when it wasn't doing so well.
Knowledge is power!
For more info: Read Money Woes: What to Tell the Kids from MSN Money. And find great resources in Helping Cope Kids in Rough Times.
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