Family Finances – In the light of parenting
Parenting is certainly no easy feat. Throughout the journey of raising your children, you will hear extraordinary questions—from extremely silly to surprisingly technical —which you may not have answers to. Or perhaps, you will feel reluctant to answer them. When it comes to children, there is no definite playbook instruction manual that can teach you the precise way to handle challenging situations. Even the parenting manuals written by the most innovative people in the world can never guarantee you 100% positive results. Two of the most challenging conversations that give parents cold sweats are telling your kids about family finances and telling your kids about the birds and the bees.
Undoubtedly, both discussions have repercussions as kids do not have the brainpower to completely understand them. Being a parent, you must learn wise answers to spontaneous questions to tackle difficult situations. It is a tough job, no doubt. However, as a parent, we must establish ourselves as steady and honest mentors in our children’s lives. Plus, building a strong and effective communication platform with a conclusive dialogue is critically important. Your kids deserve to know the truth, but sometimes the truth needs to be watered down a bit for their minds to wrap around it. As a parent myself, I know how hard this can be.
Managing the Resources at Disposal
Not every family is privileged enough to have an exorbitant number of finances, which means they must stay within a budget defined each month. Along with money constraints comes natural worry and concern. And that worry mainly revolves around managing your family and kids. Moreover, young children are not always capable of understanding the clear picture of the family finances. Those who understand are either older, incredibly smart or have a brilliant sense of evaluating things independently. However, it is important to let kids be kids. While it is okay to teach them that money does not grow on trees, they should not take on the heavy burden of worrying about money each month.
Kids are strongly influenced by their social environment and peers. These influences often lead them to ask dicey questions that they may feel uncomfortable answering at times. For example, ‘Dad, why do we have an old car, whereas my friend John’s Dad has a Mercedes?’, ‘Mom, why do we live in an old house?’, etc.… Such questions are hard to answer as your kids are not yet exposed to the realities of life. Perhaps they are too young to understand financial matters or money-related issues. It is essential always to keep the lines of communication open between you and your children. You never want them to be afraid to ask you questions, even the tough ones. When these arise, change their perspective. Instead of comparing the differences between them and their friends’ families, encourage them to find the similarities or think about what they are grateful for in your family. Even from an early age, children can be taught that things are just things and are not an accurate representation of what family means.
Family Finances – What and How They Should Be Told?
Most kids below the age of 5 are understandably clueless about money. A change in approach, attitude and belief has encouraged parents to let their kids know about money matters in a family. However, different parents and even child experts bear different perspectives regarding this matter. Some argue that children should never be told about how much you earn, which parent earns more, who owes money, how much you spend on different occasional activities, etc. To the extreme, some parents also believe that children should never be told about family finances or family earnings and spending. Ultimately, it is up to you how you handle the money talk.
There are times when families may find themselves stuck amid financial crises, which may disrupt their regular monthly budget. In certain situations, it is better to share hardships with your kids to understand why things may look a little different from time to time.
The Younger Ones
Younger children between the ages of 2-4 do not have the brainpower to understand things well. To them, money talks may sound like Chinese. Therefore, attempting to share any financial information with them would yield no significant impact no matter how hard you may try. Child psychologists from around the globe recommend not sharing family finances or anything relating to money with children of such a young age because it is unhealthy for their brains.
The Older Ones
When kids get older, they understand things more thoroughly. This means that you can breathe a sigh of relief and share money-related issues with your family, especially the older kids. Older kids have the brain capacity to evaluate and understand things which means they will better understand whether they can afford to buy something. As a parent, you need to teach your kids how to make optimal use of scarce resources to know the significance of money and savings. Sharing may be called caring, but it should be shared with kids when the age is right—not before that when it comes to family finances!
Parents often keep family finances private because they do not want their children to feel certain money-related pressures from an early age. However, as soon as kids grow older, they need to be told about finances to begin to understand the value and worth of hard-earned money.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.