Covid Shows the Importance of Parents Having Financial Conversation with Kids- Here’s How
These times have been tough on everyone. It can’t be understated how difficult 2020 has been on children and their parents. Record high unemployment, unprecedented daily death tolls, countless shuttered businesses and home evictions have been among the most drastic changes, not to mention a general disruption to daily life.
Though kids undoubtedly have noticed some of these changes, it’s time as parents to have tough conversations about finances and the extent of the damage 2020 may have caused going forward.
Keep it Positive
Simply keeping a positive outlook on life. This outlook and consequent conversations leads towards a change in mindset about family dynamic and finances. Ultimately this conversation will better prepare children for the future. Even if it became difficult to stick to this positive mindset, instilling it in your child/children, that even in the midst of turmoil, they need to stay mentally positive for the future, knowing the storm will eventually pass.
Speak on Financial Mistakes as Teachable Moments
Maybe you made financial mistakes in your past or during the pandemic, people aren’t perfect. Speak on it with confidence rather than regret and shine light on what you learned through it all. This is a teaching moment for your child above all.
Allow your kids to understand that mistakes in your finances, as well as life in general, will inevitably happen. It’s about learning from these mistakes in order to bounce back rather than continue bad habits. This is the foundation for your kids to learn that excellence requires learning from your mistakes and above all, not quitting.
Give Them Opportunities to Practice What They Learn
Letting kids implement what they’ve learned is the best way to improve and although they will undoubtedly make mistakes, give them the opportunity to learn from them. The expression “Practice Makes Perfect” rings true, and what better time to practice than at a young age.
Implementing this practice is as simple as giving out allowances based on chores or grades, helping them design a budget to track expenses and goals and most importantly building the savings to achieve these.
Long gone are the days of a piggy bank. Work digitally by opening children a checking account to deposit money. Take as much control over the account as needed, but kids should have the freedom to spend with permission from their parents. This is a team effort. More importantly, it creates a place to save up for the things they want to budget for and buy.
Help Shape the Life They Want to Live as Adults — Happiness and Not Just the Pursuit of Money
Talk to your kids about their dreams and don’t judge, just listen. This may be difficult at first seeing as parents often have their own dreams of their children's’ lives. Instead of shooting down an idea or making it seem unrealistic, listen to help them plan for it and instill a strong work ethic above all. A friend of mine wanted to be a stand-up comic at 7 years old. The first reaction of his mother was to shoot down the idea. Despite her unhappiness with the job prospects. She laid out that it would be a tough life, most likely requiring a second job to supplement income with no guarantee of success. More importantly, however, she made it clear that if it was his life’s passion — pursue it!
The key to having this conversation with your child is instilling the idea of happiness in life while still making sure their financial obligations are met. This requires planning that (if you’ve made it this far in this article) has already been considered and started by instilling a positive mindset, strong work ethic, discussing and learning from mistakes as well as practicing saving and budgeting from early on in life.
We all want our kids and loved ones to be successful in life. If there’s any silver lining to 2020 or this pandemic it represents an opportunity to instill success and help build future generations to be resilient, happy, successful adults.