Vanessa Stoykov: 4 ways to potentially make better money choices as a family
Written and accurate as at: Jun 09, 2022 Current Stats & Facts
By: Vanessa Stoykov
More often than not, financial decisions for the family are made strictly by the parents, but to help your entire family get better at making good money choices, having everyone involved in the process can be key.
Finance isn’t a topic that comes naturally for everyone, and unfortunately, it’s something that is still somewhat lacking in traditional education.
So unless you get your kids involved in making smart decisions at home, they may be missing out on a skillset that can greatly benefit them for the rest of their lives. Plus, it may take some of the pressure off the parents to solely make all the decisions and turn financial decisions into more of a democratic process (to a degree of course!).
So, here are some ways to potentially start making better financial choices as a family.
1. Get rid of the enforcer and make money choices a family effort
In some households there is one parent who handles the finances, and that person makes the decisions (sometimes together with the other parent) about what the family needs to budget, what the family spends, and what they are saving for. But by making it a more collaborative process where the children have a say can not only teach them about making smart choices, but also take some of the pressure off that sole person.
Now, I’m not saying children should be the ones to decide between saving for a house or spending that money on a 5-star trip to Disneyland, but having an open discussion around why the parents make certain major financial decisions can help kids feel like they are involved. Then, for the decisions that parents are happy with either outcome, consider letting your children vote or have a say.
2. Start having regular family meetings
It might sound simple, but gathering the troops (anyone five years or older), sitting around a table, and having open discussions about money and family goals every month or two can be one of the most important steps to take. At your first meeting, decide on a family goal (for example going on a holiday, getting a pet, moving to a private school) and then a budget can be created to achieve this goal.
3. Set targets per person
Holding everyone accountable can be important, but you need to be realistic. For example, my eldest son helps me with computer tasks for pocket money as he’s knowledgeable in that space, but one of my other sons likes maths so he is tasked with coming up with ideas for how to cut costs in the household. Last week, I suggested ordering pizza for dinner, and he said that we could cook it cheaper at home and put the money we would have spent on the meal into our ‘goal’ account—so we did. Holding everyone accountable can keep everyone on track and motivated.
4. Paint an end goal, and make it enticing
It’s like when you want to lose weight and look at the clothes you’d like to fit into. People of every age want to be able to see the sacrifices they are making will lead to something good in the future. With children involved, consider perhaps shorter time scales to track progress (three months, six months, a year) so they don’t lose focus.
Helping teach your children to make smart money choices early can help them hugely later in life, and it’s surprising how much parents can learn through this process, too.