When you buy a new car, did you involve your children in the selection? And talked to them about dealers and prices? Probably not. Because children would rather opt for a chic sports car than for the practical multi-van. Choosing the right car may not be exciting for children. But when it comes to vacation planning, the young can get involved, says Thomas Henske, a financial planner from New York. “Talk to your children about whether you want to drive or fly, about what a flight costs. And how expensive it is to eat on vacation,” he says to “CNBCSuch conversations could take a few days, but children would develop their own ideas. And understand: What costs how much – and what can we afford?
Parents need to talk to children about money
Henske criticizes the fact that parents are too hesitant to talk to children about money. Children would very well ask questions like the killer question: “Are we rich?” The expert recommends answering with a counter question: “What do you mean rich me?” Because children in particular would interpret prosperity very differently. At dinner he was asked by his children what he was earning – and used the moment to talk to them about money. Incidentally, he did not give them a specific answer, but first asked his children.
The author of the book “Mind over money“and co-founder of the Financial Psychology Institute, Brad Klontz, advises studying the financial history of one’s own family – because even as adults we would live what we learned early on. The financial crisis has created a generation of hesitant savers who can Suspicion of the banking system, and that would be passed on.
The experts have developed a guide for “CNBC” to help raise children in terms of money and finances.