(StatePoint) Speaking with your kids about money is not the easiest thing to do, but it can help prevent many problems for them down the line.
Now more than ever it’s clear that kids need a good foundation of financial knowledge — with student loan debt passing the $1.5 trillion mark in 2019, according to Forbes, and an average debt of $22,000 for the 18-24-year-old age group in the U.S., according to CNBC.
Ensuring your kids have fundamental knowledge about credit cards, saving, budgeting, and interest, can help set them up for a secure financial future, benefitting them throughout their life. And with a record 15 percent of 25-35-year-olds living in their parent(s) home, according to PEW research, when better to start than in childhood?
“The key to talking to your kids about money is just that — to start talking,” says Sarabeth O’Neil-McAuliffe, author and chief marketing officer at Family Credit Management, a non-profit credit-counseling agency.
Here are some tips to get started:
• Start Slow: It is okay not to disclose the amount of debt you have or how much is in your savings account, but simply discussing the value of a dollar can go a long way. While grocery shopping or running errands, talk to your kids about how much the items they use every day cost, or tell them how many hours you need to work to afford a particular purchase.
• Talk About Savings: Have your kids help plan a day trip to somewhere fun. Tell them that once they have saved up a certain amount of money to contribute to the trip, you will go. When they want to buy a toy or treat with their money, ask them if they would rather have that toy or treat or if they want the money to go towards the trip.
• Use Technology: Once it is age-appropriate, help them use a free budgeting app that will allow them to visualize income and expenses. Being able to see where money is going and how much is left can be a big help in making sense of budgeting.
To help set children up for a strong financial future, O’Neil-McAuliffe authored “Kathryn & Elizabeth Go Shopping,” a children’s book exploring basic money management and the value of money, which tells the tale of two sisters with different opinions of how to handle their weekly allowance. To save or to shop? That is the question! In line with Family Credit Management’s commitment to providing financial education and thanks to a generous grant from Capital One, 1,000 free copies are available by using promo code “SAVING” at kathrynandelizabethgoshopping.com until Aug. 1, 2019. There is a limit of three free copies per household.
A strong financial future starts with financial literacy. Give your children the gift of knowledge and help set them up for success.