New Year...New Money Talk!

Happy New Year! It’s that time of year to make your annual resolutions.  Here’s one to add to your list:

I will talk to my children about money.

It might sound like a simple resolution but it turns out that parents don’t talk enough with their children about money. It doesn’t have to be stressful. The idea is to use every day events to open the discussion about money.

For example, if your 5-year-old tells you to “just go to that machine and get some money,” it’s a great time to explain the basics of banking. “Mom and Dad work for money. We take our money to the bank for them to keep our money safe. We go to the bank when we need to get our money to pay our bills or buy things at the store.“

And, if your teen asks why “everyone else goes on a ski vacation over winter break except us,” it’s a great time to discuss the family budget. “Mom and Dad work for money, and we have to plan how the family will spend our limited funds. First we have to pay for the house, food, car, clothing, education, as well as save for later, such as retirement, before we can plan our vacation budget.”

By talking about money using every day activities, you will be creating an open dialogue with your kids and teens so they are comfortable asking you questions about money - and maybe more! This gives you the opportunity to “teach” them good money habits that they can use to grow into a financially independent adult.

Now that’s a great New Year’s Resolution! Happy & Healthy 2012!