Research has shown children learn the most about money from their parents. They watch parents spend or save money every day (observation). They also hear their parents talk about money either directly or indirectly (talking it over). And children learn about money by using it themselves (learning by doing).?
Observation - Watching their parents and other adults, help children understand how their parents feel about money. In turn, this influences how children feel about money. Do parents spend all their money before it’s earned? If so, this may make it hard to teach children about limited resources, planning for spending, and the value of saving. Or do parents save every cent they earn? This attitude may make it hard for children to see that money is a tool, not a goal in and of itself, and can make it difficult for children to spend even for necessities.?
Talking It Over - It is important to discuss the family’s financial situation with children at a level appropriate for their age. Encourage children to participate in family financial discussions. Communicate about money one-on-one as the opportunity comes up. Remember kids live in the present. Be reassuring when talking to children about money. If they discover the house they live in is not completely paid for, they may worry. Assure them the family is able to make the monthly payments and they will not be out in the street by morning. ?