It is so important for your family to know the extent and nature of your finances. Although you may prefer to keep such matters private, your family will struggle in the event of your death or illness when your assets will need to be managed by someone besides you. And frank discussions about money are how children learn about financial management. For a family to function harmoniously and efficiently, and for kids to learn how to manage their own personal finances, everyone needs to be in the know. Here are some reasons to talk about your finances with those closest to you.
1. Break the Silence, Ease the Burden
Is your family struggling financially? In these economic times, the number of families in financial difficulty – if not crisis – is growing. Why discuss it with your immediate family?
Open discussion about the family’s finances eases some of the stress on the main financial provider in the family. And your spouse and children may have ideas and resources you might not have known about or considered. The family may get together and decide to have a yard sale, or the children may be willing to take on neighborhood jobs to help out. Maybe your spouse has an idea for a home-based business or other form of extra income. You don’t have to carry the family’s entire economic situation by yourself. Soliciting the support of your loved ones can take some of the pressure off.
2. Honesty Is Still the Best Policy
Your family will respect your willingness to be honest with them and trust them with financial information. Family members appreciate being included and involved in decisions that affect them, and usually have much to contribute.
3. Bridge the Generation Gap
Do you sometimes wonder what your dad is thinking when he says no to some expenditures? Do you get frustrated with your teen’s inability to understand the importance of saving and avoiding debt? Airing these frustrations and misunderstandings in frank family discussions is an excellent way to bridge the financial gap that exists between generations.
4. Make a Family Budget
Including the whole family in formulating a budget is a good way to get everyone involved and knowledgeable about the family’s financial state. On a practical note, it is essential to get a handle on the actual numbers involved in your family’s finances.
Making a budget forces everyone to work within a limited number of dollars, and can actually ignite creativity. If you can’t just buy it, why not learn to make it? Or come up with an alternative? An example of this is an entertainment budget. If your family is used to spending $100 a week on eating out and entertainment and you have to cut back to $50, let your kids come up with interesting alternatives such as a family board game night or cooking meals together.
Your children will remember what they learn when they come alongside their parents to help with the finances. After all, how your family manages its money affects every family member.
