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As the father of three wonderful kids I think that father’s day is the most important day of the year, at least, that’s what I tell my kids so they take it seriously. Waking up on Sunday morning with breaky in bed is wonderful, but this year will be a little different. Lockdown and restrictions across the country will mean that many of us will not be able to partake in the usual visits to relatives or lunches and dinners out at restaurants. My father’s day, in Melbourne, will be spent at home except for the 1 hour of exercise we will do together.
So, we have a little more time on our hands, what will we do with it? Why not take some time to teach your kids about money. Helping your kids grow and learn about money now, will help them avoid making big mistakes in the future and it can build your relationship with them at the same time.
Here’s three things that dads can do this father’s day to teach their kids about money.
1: Be open and honest.
Teach your kids about the family finances. The amount of information you give them will vary depending on their age, but you can start young. Tell the 5-year-old that you aren't buying the toy they want because you need the money for food or to save for a beach holiday rather than just saying ‘We can’t afford it’. As they get older, let them know how much you earn, teach them that it is private and you are trusting them with the information. Explain to them mistakes you have made, the huge credit card or personal loan for example. The more open and honest you are with your kids about the family finances, the more they will learn from you that money isn't free and needs to be managed. This can all start this father’s day with a quick conversation about how your family manages money. Start by asking your kids how they think it works and go from there.
2: Teach them how to use credit
This is especially important through the teenage years. Although you can begin much earlier. Tell your kids that if you buy a $200 item on credit it could actually cost upwards of $400 by the time you pay it back, ask them 'does that makes sense'?
Too many young people get their first job and first credit card or loan to go with it. Remember that by paying the minimum payments on a $5000 credit card debt it will take around 33 years to pay back.
Show them how to use credit by setting an example. Don't rely on a credit card as your emergency fund. Show them how to save instead. They will learn by watching you.
3: Teach them to be grateful.
Just by winning the lottery of being born in Australia you and your kids are amongst the richest people in the world. People that manage money well, do so with the knowledge that they are lucky to have what they do.
We live in a world of instant gratification and seem to be losing the feeling of gratefulness that comes from saving for an important purchase. Teach kids to be grateful for what they have, not to always be wanting more.
Showing your kids that part of managing money the right way means using your money to help others will teach them valuable lessons that will last a lifetime. Involve them in charity donations, even donating their old stuff to an op shop so that other kids will get the chance to enjoy it teaches a great lesson. Be thankful for what you have and help those who have less.
By being a positive role model for your children, they will learn to manage and respect money. It will help to set them up for a secure future. You probably won’t get through all this on father’s day, but it’s a great place to start. Happy father’s day to all the dads out there and enjoy building a positive relationship with your kids and money.
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Ben Graham-Nellor is an advisor, coach, blogger and speaker who has worked in the financial services industry for over 15 years. He believes that by educating and advising people today, they can improve their tomorrow.
Ben Graham-Nellor is a Sub Authorised Representative (291391) of BGN Financial Management PTY LTD (ABN 45 672 104 196) which is a corporate authorised representative (468796) of Professional Investment Services Pty Ltd (ABN 11 074 608 558) which is the holder of Australian Financial Services License No.234951. Website |www.centrepointalliance.com.au/PIS
smart.happy.money is a trading name of BGN Financial Management PTY LTD
This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.
ben@smarthappymoney.com.au