A study at the University of Cambridge concluded that children begin developing an understanding and habits surrounding finances by the age of 7. The cost of waiting to talk to your children about money can be long-lasting, so let’s take a look at how those conversations can look for your family.
Be Aware of How You Talk Around Children
As children develop, they listen to everything the adults around them are saying. Their brains are sponges picking up every piece of information they have access to. This means parents of young children need to be cognizant of how conversations around money may impact their financial impressions and habits.
Explore Your Child’s Financial Curiosity
New York City is one of the most diverse cities on the planet. That diversity isn’t just about ethnicity or background – it’s also about finances. You can go down a block in Manhattan and see a wide variety of income levels. There will be people in expensive clothing while you also pass by a homeless person fighting to get by. There will be a high-rise packed with million-dollar condos across the street from affordable housing.
Our kids see this. They may become curious regardless of what end of the financial spectrum your family stands on. Children might ask “are we rich?” or “why does my classmate have more (or less) than me?” Explore this curiosity and ask them why they’re asking these questions to get a better understanding of their thinking.
Children pick up on the concept of security early on and these questions may be based on the desire to feel secure at home. You can feed this curiosity in simple terms by helping them understand how being “rich” can mean many different things.
Incorporate Financial Planning Into Daily Life
You don’t have to schedule a time to sit down and have “the talk” with your children. Our children are evolving and learning each and every day, so a single long conversation about financial planning may not be the most effective way to help them understand healthy financial habits.
Instead, blend these conversations and tips into your daily life. You can explain to your children the choices you’re making. This can be as simple as telling them why you opted for a more affordable item at the grocery store over another, more expensive option. Using cash when you shop is also a great way to make money a more physical experience – kids are hands-on learners so just swiping your credit card won’t help them understand the money coming and going as you shop.
At The Village Law Firm, we are always looking for ways to help New Yorkers and their families navigate financial challenges. Helping our kids understand money early on can set them up for success. Part of this also means making sound decisions as a family such as effective estate planning. Contact The Village Law Firm and make sure your plan allows for the whole family to thrive.We have a video with more detailed information and tips on how to talk to your children on The Village Law Firm YouTube page.
