Why it Pays to be Open with your Kids about Finances

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Let’s face it, finances and revenue are a big deal. When it comes down to the welfare and care that is needed for your family, finances are important. From the family’s educational needs to wardrobe desires and nutritional demands, everything is taken care of by you, the parents. As an earning parent, being open with your kids about finances helps greatly in the long run. Many factors are considered so that the right message is laid out as children really need to be introduced to responsible financial habits to help with expenditures and the overall well being of the entire family.

Creating a Family Friendly Budget

The hierarchy of a family often leads to the one that is earning and, for that person(s), following a smart financial plan may sometimes be difficult.  However, it is sacred. The amount earned is distributed equally after the bare essentials are considered. Teaching your children about finances is a great way to make the plan effective. Before acquiring the amount distributed, a scheme, or better yet a budget, is drawn up and everyone is considered. Mandatory payments are taken care of first such as mortgage, tuition, utilities, etc. After that, the remainder goes into two categories, i.e. savings and spending. We recommend to save at least 15-22% percent of the whole. After that, you have the remainder to benefit everyone.

Get Your Family Involved

We have to face the fact that what is derived from the above will be a significantly reduced amount of the original and everything has to be planned. By letting the family and kids be involved with finances and budgeting, all needs are met and the welfare of the family is not comprised. By enrolling their attention to the most sensitive matters of lifestyles, expenses, and finances, you are educating them about their significance and providing a model to use on their own. Whatever the method, it has to be engaging of everyone.

Proactive involvement leads to less stress on your part. When everyone has an idea of the budget and the plan to carry it forward, it creates an understanding within your family. This understanding leads to the realization of the responsibilities of an adult. Teaching kids about finances who look up to their parents enables them to be successful while learning effective habits to create their own economic plans. It helps them understand the value of finances in the years they are growing, making a long-lasting impact on their lives.

Who better to teach these valuable tricks to ensure their own future prosperity and financial bliss than you? Undoubtedly, being open about your financial limitations can be hard to endure. But, by exposing your limitations, your family will understand how hard you work in order to put amenities on the table for them. By knowing the situation and teaching kids about finances, it allows them to realize the value that hard work has for a secure and prosperous uprising and growth.

Young children have the hardest time understanding the concept of money and how all of their desires are to be met. Children around the age of eight should be learning how their welfare is being managed and what the parent does for a living. This enables them to gain a great picture of reality. To mentor kids about finances, it’s almost imperative that there is a functional image of a parent in the eyes of a child who loves them unconditionally and would go to great lengths to take care of them and fulfill their desires and wishes. Being responsible for their decisions is the main focus of planning and budgeting.

Adolescent years are difficult without the support from parents. School peers are a meaningful part of their lives and will help them learn about the world. Social events like concerts and parties will bear certain costs and a good deal can be done beforehand to prepare and teach your young adults about money. Teaching kids about finances allows them to acquire the skill of being prepared. Things such as allowances and Christmas money are inevitably used more effectively when they have an understanding of the value of a dollar. As set above, savings will help them prepare for any kind of social gathering of friends. Thus, setting more reasons for them to finance and budget. Your example makes an impact, so use it wisely.

Conclusion

Being open doesn’t mean appearing weak, it means facing reality. By living within the means of what is financially provided and saving from that will not only help your family logistically but also physically and mentally. It also helps avoid domestic arguments and protects from spousal distress.  As they say, if the wife is unhappy, no one is happy! Apprising your spouse and children about finances is an honest, open, worthy and trust building exercise that will be highly appreciated and, above all, draws respect for you as the leader.

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