If you immediately answered yes to the question in our headline, think again. Are you sure you would be fine discussing your family income, why your family expenses cut out certain things, and how your family budget works with your preteens and younger children?
If you’re wavering a bit, don’t feel guilty. According to the third annual Parents, Kids and Money Survey from T. Rowe Price, 86% of parents feel they have the primary responsibility to teach their kids the basics of personal finance, yet those same parents only give themselves a B- on serving that role.
In fact, the survey found that parents are more comfortable talking to their kids about drugs and alcohol more so than the family budget!
It ‘s not that parents are lazy or ignoring their duty; the survey also showed parents only graded themselves with a B as to being capable of articulating family finances accurately. Just 28% of parents say they are very prepared to discuss basic financial principles such as
- setting goals
- the importance of saving
- smart spending
- inflation
- diversification
How can we change our fear of financial discussions into a time with our family that will encourage everyone to watch their expenses a bit more? Here are five tips on how and when to discuss your finances in the least painful and awkward ways.
- Take advantage of everyday teachable moments like grocery shopping, planning a family vacation, etc.
- Help kids set specific savings goals when you give them their allowance, set up a savings account, or get their first paychecks.
- Emphasize prioritization when kids ask for something when shopping, or when they decide what percentage of their income to put into savings.
- Offer an open door policy about family financial decisions and be careful how you react to money issues.
- Make the conversations you have about finances fun, or at least try to engage the kids in the conversation so they don’t think of the financial talk as another “how-to” from mom and dad that goes in one ear and out the other.
