Talking about money can sometimes be difficult.
There are often a range of emotions attached to personal finances which might make us shy away from talking opening about how we manage our own money. Maybe, your own parents didn’t talk to you about money but now, as a parent yourself, you want to try to pass on some wisdom about personal finances to your children.
Often, we might find it challenging to fully understand the jargon that surrounds financial topics ourselves, so we are more reluctant to tackle terms like credit score, interest rates and debt management, or avoid wading in on a conversation to educate our children and teenagers entirely.
However, the more we know – the more confident we will feel, and the better equipped we are to make informed choices about finances. The words we use, the words we read, the words we hear - they all count and can affect our wellbeing, whatever our age or stage of life.
Whether you are a parent trying to educate your child about personal finances or you are the teenager trying to engage in a conversation about money management with your parents or peers, it is important we have a chance to grasp the lingo and unpack the terminology which will all help to build financial resilience.
Here are our tips for starting a conversation about personal finances and money management:
Lingo bingo
Financial terms can have us all stumped from time to time. It’s overwhelming enough to have to work out how to pay bills and keep on top of money coming in and (seemingly endless) money going out, without having to decipher the lingo that accompanies the task. We have demystified some of the key financial terms and phrases in a range of glossaries.
- Take a look and test your knowledge with our Lingo Bingo quiz. You could go head-to-head with your teenager!
- Find a useful glossary of terms more specific associated with managing money and saving to help you and your teenager start a conversation.
- Discover words relating to credit cards and borrowing money.
Make a budget
It’s important to build good habits early on so that thinks like saving, budgeting and tracking the money being spent feels like second nature. Children will inevitably start small with pocket money, but a consistent habit will help build confidence so that once the amounts of money they are dealing with becomes bigger, they won’t feel overwhelmed.
- Make it fun and creative too – depending on the age of your child you could make saving jars or different envelopes with labels from saving to spending and even, giving. This way your child can decide how to distribute their money between each jar or envelope.
- Older children and teenagers might benefit from a simple spreadsheet model or working with you to keep track of spending on an app.
You can find more on these ideas, as well as plenty more, on GoHenry.com.
What’s your money mindset?
Budgeting, saving, planning and tracking finances are all great habits and practices to get into but it’s important to teach your children and teenagers about having a healthy money mindset.
- Help your teen to base their financial choices on logic rather than become driven by emotion.
- Perhaps you could encourage your young person to think about how they feel when they are splashing the cash: what is motivating them? Is it an impulse or a considered choice?
Be willing to be open
Above all, be open to having regular conversations around personal finances with your children and teens. Think about the time of day and environment so that you all feel comfortable and can concentrate – but also have fun with it! Your own experiences of spending, saving and even wasting money will be the best teaching for your child or teenager, and create space for them to ask for guidance and tackle any potential pitfalls together.
Barclays has a wealth of guides for parents to help you teach your child about money.
