Five Things To Tell Your Child About The Cost Of Living. Hello everyone, I hope you are well. In today’s post, I will share a guest post from Brean Horne, a personal finance expert at NerdWallet, as the rising cost of living continues to stretch budgets with little signs of slowing down. It can be an extremely worrying time for many people living across Britain.
This is especially true for families and can create challenging questions for parents to answer. Brean will be sharing how parents can tackle the topic of money when talking to children. And stay realistic about any financial sacrifices that may be needed this Autumn/Winter.
Five Things To Tell Your Child About The Cost Of Living
Strike The Balance
Honesty is always the best policy. While ensuring your child is aware of the realities of the rising cost of living is essential. It is also crucial to avoid unnecessary panic or worry. It strikes the right balance between explaining the seriousness of the situation with not alarming them.
At the moment, it is not necessary for a child to be too concerned about the intricate details of budgeting and saving. It’s a good idea to make your child aware of the increase in heating, petrol, groceries, and other essential items.
Be clear with children if the current climate means you must cut back on some of their favourite brands at the supermarket. Or if you need to take them to more budget-friendly clothing stores to pick out new items. Reassure – but don’t promise – this should only be temporary and help them understand how important it is to appreciate all they still have rather than what they don’t.
In the lead-up to the Christmas period. Many children may start sharing ideas with their presents about the gifts they want to see sitting under their tree come December 25th. However, this year many may struggle to create a similar festive experience for their families whilst dealing with ongoing financial pressures.
To still create a fun and memorable Christmas for your children, it’s wise to prepare them sooner rather than later. Some Sacrifices must be made if they want specific Christmas presents or experiences. Such as swapping pricey weekend activities like cinema trips for a day exploring local walks or visiting a local free-entry museum.
This will hopefully help children realise that parents don’t have access to unlimited wealth to treat them with. It should also emphasise the magic of Christmas and how lucky they are to have a family willing to cut back, so they don’t go without.
Be Wary Of Shock Value
Children will often consume a lot of information from their peers or unsourced articles shared on social media platforms. Written to shock and generate headlines, both of these are notorious for exaggerating or expanding on the facts of a story or subject. It should not be how a child gains knowledge of the current crisis.
Depending on their age, sit your child down for a frank conversation on the issues that are most concerning to them. Try your best to reduce any panic or worry they have heard through others or online. Point them toward child-friendly websites that can outline the most pressing issues in easy-to-digest language. Reassure them that you are always available to answer or tackle any questions or concerns they have.
Teach Them About Budgeting
Parents can use the cost of living crisis as an opportunity to educate children on the importance of budgeting and saving for a rainy day. Highlighting different issues surrounding inflation, energy bills, and how interest rates affect things like mortgage repayments and credit card loans.
Even how inflation works will give them a better perspective on the crisis and is something they are unlikely to be exposed to within school settings.
This is also an opportunity for older children to help them set up their financial accounts. Such as a children’s bank card or a prepaid card. This will help them learn how to budget and manage their finances. It helps them to understand the satisfaction of saving to purchase something for themselves.
While some children are given pocket money or a weekly/monthly allowance, now is an excellent opportunity to give children age-appropriate chores to earn money.
Involve Children In Making Cost-Effective Savings Around The House
Budgeting doesn’t have to be boring. There are many practical and fun ways to involve children with household budgeting tasks.
Set children a task to plan budget-friendly meals with a certain amount of money or ingredients you have in the fridge and cupboards as a MasterChef-style challenge. Or get them involved in cooking/baking large batches to freeze for a later date. This is a great way to save money and reduces food waste.
To help them understand the energy crisis a little more, it’s also worth setting them the task of ensuring no electronic devices or switches are left unnecessarily around the house, which can be incentivised with rewards.
I hope you enjoyed that.