SHARING VALUES AND ENCOURAGING CHILDREN TO FORMULATE THEIR OWN

Having a conversation with children about money early on helps them to build financial confidence and learn foundational principles that will be useful for years to come. It also allows parents to share their financial values and wishes. We look at some practical ways this can be done at different stages of childhood.

Some parents dread talking to their children about money. Others simply struggle to know how or at what age to begin. This is understandable: money is both a complex and emotive topic. But beginning the conversation early on helps children to form the foundations for a healthy relationship with money and enables them to learn important financial principles that will help them to successfully steward future wealth.

CREATING OPPORTUNITIES FOR FINANCIAL DISCUSSIONS

Having open conversations from a child’s early years allows parents to share their values and encourages children to formulate their own. It’s not all about numbers. A common misconception is that talking to children about money involves disclosing amounts or elements of the family’s financial life and position that may not be appropriate to share with children or young adults. Instead, the conversation should centre around communicating values and principles for managing money effectively.

The goal is to share with them what’s important to you about money and to equip them with the skills and confidence to manage their own wealth effectively. Identify any pitfalls that you wish for your child to avoid. This could be anything from entitlement to lack of confidence. Think carefully about this and find ways to discuss your views with your child.

PROMOTING FINANCIAL CONFIDENCE THROUGH PRACTICAL ACTIVITIES

To reinforce the concepts discussed, consider incorporating practical activities into your routine. For example, you could start with simple budgeting exercises, setting savings goals for specific items, or even discussing the basics of investing in a child-friendly manner. These hands- on experiences can make abstract concepts more tangible and relatable for children.

Remember, the aim is for your child to feel comfortable and knowledgeable about financial matters. By encouraging an open dialogue, you are setting a foundation for their future financial well-being. Creating an environment where money can be discussed openly ensures that children feel confident seeking advice and making informed decisions about their finances.

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THE VALUE OF YOUR INVESTMENTS CAN GO DOWN AS WELL AS UP, AND YOU MAY GET BACK LESS THAN YOU INVESTED.

THE TAX TREATMENT IS DEPENDENT ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN FUTURE.