Talking to Your Kids About the Economy

My daughter is at that age where she is becoming aware of what's going on in the household and in the country. She hears about all the things that are happening with the economy from the news and asks me about it. I try to explain everything in such a way that she understands it but not make her worry. I think that times like these are teachable moments. I told her that some people lose their house just like people all over the country for many reasons, some either borrowed too much money that they cannot afford the monthly payments or some lost their job and don't have any money to pay the bank. So one lesson here is not to live beyond your means. Even if banks will let you borrow money to purchase some expensive Wilmington NC real estate , if you can barely afford the monthly mortgage, do not take the money. She used to always ask for us to buy her this and that but now she knows that if she wants something, she has to save for it first. We told her that we'll pay for half and she in turn will have to fork out the rest. Yes, we can afford to give it to her but I don't want to raise a brat who expects everything to be handed to her. Children need to learn that money doesn't grow on trees. I've already started talking to her about mortgage, taxes, bills and other expenses. By doing this, hopefully, she'll be responsible about her finances.


3 shared thoughts:

Elizabeth said...

I also do that with my kids. They're very young but I just use simple terms. I want them to know about it at an early age so they will understand why we have to cut on this, or why we can't buy a certain toy, etc. :)

Joy0z said...

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Lanie, said...

We did talk to our son as well even his not old enough to understand everything, but is it a good start for them to learn.

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