Financial literacy begins at home. Our schools rarely teach us about money. Our companies rarely teach us about money. Our churches rarely teach us about money (and it’s usually it’s too warn us about it). So it is up to us to teach our family about money. And that means you need to know more about it first.
Sadly, we hardly talk about money. If we do, it’s usually to fight over it. If you want to you and your family members to have a healthy relationship when it comes to finances, you need to have these four money conversations at home:
- Money Conversations With Your Spouse: Your Issues and Progress
The foundation for financial literacy at home is your relationship as husband and wife. If the two of you are not getting along with your finances, you will not get along with other family members when it comes to money issues.
Start with your financial background. How did money figure in your growing up years? Were you spoiled or deprived? Did your family had a lot or barely enough? Was money a taboo topic or was it something you always talked about? Share what your financial priorities are you’re and your money personality is. Is education more important than retirement? Are you a spender and not a saver? Talk about all your financial issues and find areas for compromise.
Set financial goals together for your family. And remember to discuss important things like who’s responsible for budgeting, investing, paying the bills, etc.? Finally, meet every month or every quarter to discuss your progress and brainstorm ways to improve your finances.
- Money Conversations With Your Children: Your Rules and Lessons
Start them young. You can teach kids as young as pre-schoolers about the importance of money – where it comes from, what it is for, and how it helps them. For older children, guide them with budgeting their allowance and allocating money to saving, spending, and giving. Help them set small money goals they can save up for, like a toy they’ve always wanted.
For teenagers, you can already teach them about investing in the stock market. In fact, make them start investing on their own. It’s also important to warn them about the dangers of debt, especially credit card debt (which they will soon have access to), as well as its proper use, like for a mortgage. You can even involve them in your financial planning so they themselves can work with you on how to cut back on expenses and save for your family’s future.
- Money Conversations With Your Parents: Your Capability and Responsibilities
As a parent yourself, you may find yourself with two sets of dependents: your children and your own parents (and parents-in-law). That is what belong to the Sandwich Generation. You need to honest with your parents about your financial situation. If they need financial support, be upfront about how much you can afford to give. Remember that even as you do not neglect your parents, your priority now is your own family (your spouse and kids). You should not give what you do not have. But, of course, if you are in a good position financially, be generous with your support.
If the situation is reversed and your parents are well-off while you are struggling, don’t be too proud to ask for help if you really need it, like in a financial emergency. But never abuse their generosity. You should be accountable for your money choices and grow up. If you need to lower your cost of living and adjust your lifestyle downwards, then do it, until you can get back on your feet.
- Money Conversations With Your Relatives: Your Priorities and Obligations
It is possible at some point in time your siblings, nephews or nieces, uncles and aunts, cousins, cousins thrice removed, and in-laws will ask you for money, whether you have a lot of it or not. If you have the financial capability and it won’t affect your own family’s finances, feel free to give, especially if it’s a real need. Don’t even bother charging interest – just assume you won’t get paid back.
Otherwise, you tell them your family has financial goals you need to prioritize. Help them in some other way, like use your connections to find them a job or teach them how to budget. Under no circumstance should you co-sign or co-borrow your relative’s loan.
On the other hand, if you are the one in need and end up need to borrow from a relative, take your obligation seriously. Draft a loan agreement with a reasonable interest rate and stick to your repayment schedule. If you miss a payment, don’t hide and do what you need to do to pay off your obligation – sell some stuff, do extra work, cut back on expenses.
If you want to have healthy relationships with family members, have a healthy relationship with money. And the key to nurturing healthy relationships is by having honest and open conversations.
Photo by Joshua Ness on Unsplash
