With the novel coronavirus pandemic effectively turning our working and shopping habits upside down, many Americans are finding themselves shifting their habits. The New York Times recently published an infographic that shows the radical changes Americans have made in the way they spend their money. In the past month, the U.S. has seen unprecedented numbers of people filing for unemployment. In times of crisis, wealth and privilege disparity is exacerbated and becomes more apparent to a lot of people. 

This barrage of news led me to the idea of using this opportunity as a teachable moment for kids and teenagers. I understand that some may find this another daunting thing to add to the to-do list, and for others still saving money is a privilege that not all in this country have—many live paycheck to paycheck and/or are in debt. But if you’re in the position to do so, creating a financial safety net sets a good example for kids. Situations like these that arise abruptly really highlight the importance of an emergency fund. It also tends to cast a bright light on needs vs. wants. 

For a lot of folks, money is considered a sticky subject and often avoided, like politics or religion. Talking to your kids about money beginning at an early age, however, can be the building blocks to a positive relationship with personal finance and these beneficial skills will be carried into their young adulthood and beyond. I recently read the book The Year of Less by finance writer/blogger Cait Flanders. The memoir largely follows her journey through a self-imposed shopping ban, which she conducted just before the Marie Kondo minimalist movement took North America by storm. While recounting childhood memories, she shares an anecdote of her father printing out article clippings about interest rates, retirement savings plans, real estate markets, and economic forecasts and leaving them on her bed for her to read. She writes, “as boring a topic as it seemed at the time, I now realize how lucky I was to grow up in a family that talked about money”. 

TIPS

Tailor your approach to their age group. This may seem obvious, but framing the situation in a way that they understand will go a long way in their comprehension. If you have the time/resources to do so, try a game or activity for younger children. Kids are often more receptive to hands-on learning and a lesson taught this way becomes more memorable. For example, think of the Girl Scouts cookie program which fosters goal setting, money management, and business ethics skills, or even the classic board game Monopoly! Teenagers can take on some responsibility by learning how to manage their own money with a no-fee checking account. Dan Scholey, COO of money management app Moneyhub urges parents “not to underestimate a child’s ability to understand and engage with finances, arguing that stereotypes of young people wasting money can get in the way of teaching them positive messages”.

Even when you think they may not be listening, they usually are. As a parent, you may often feel like the things you tell your children go in one ear and out the other. Don’t feel discouraged. Kids may take some time to absorb new information, and just because you don’t get your desired response right away that is not a guaranteed indication that the info you’re trying to communicate hasn’t been received at some level. Make sure you keep open lines of communication; you can always revisit a topic at a later date and you might even be surprised by a child asking questions seemingly out of the blue. As evidenced in the Cait Flanders example above, the words and actions of parents really do have an effect on young ears.

It’s not really about having the perfect approach. Everyone’s financial situations are different and there’s no one size fits all list of talking points. The goal is to introduce concepts that can be explored and expanded on. Don’t beat yourself up by not having all the answers at your fingertips. Explain that this is a new situation for you too, and you will navigate it together. 

Be transparent with your kids (to the extent that you feel comfortable). Financial guru Rachel Cruze says “there’s this balance of sharing but not scaring [them]”. One of my friend’s siblings shared that she and her husband looked at their budget after their income had been drastically reduced. They decided to print it out and show their four kids what everything costs. “We did this in the spirit of being empowered about money instead of being afraid of it.” They assured their kids that although things like music and art lessons had to be put on the back burner for now, they were going to manage and have all their basic necessities. The level of detail you choose to go into can vary depending on kids’ maturity levels or simply what you’d like to keep private. Most experts agree that sharing a basic overview of your situation works just fine; at this time, kids are largely seeking honesty and reassurance. 

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