12th June 2015

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The financial crisis of 2008 revealed a couple of things – one, we’re not that au fait with the working of the financial sector and two, when it comes to money management, we could do a lot better.

Of course, the crash and the subsequent global recession represented a wake-up call, namely a response to the two points highlighted above.

Firstly, we need to know more about the complexities of finance and secondly, we need to be better with our cash. That collective knowledge and understanding is not only empowering, it can also be liberating.

As a general rule, this is a good position to be in. However, if you’re a parent, being informed and confident in your ability to grasp at least the basics of finance and having control over your own cash is doubly important in some regards.

This is because there is a desire for one’s own children to be equally self-assured when it comes to money now and in the future, and as an expert notes, the earlier that mums and dads can enhance this quality, the better.

Writing in the Huffington Post, Shannon Schuyler, corporate responsibility leader, PricewaterhouseCoopers, said that “as parents, the first lessons we share with our children are those related to the values we expect them to live by”.

This can include virtues such as sharing, being honest, kind and unselfish and showing respect to adults. These evolve into important, lifelong characteristics that ensure that as adults, they remain grounded, supportive and caring individuals.

“What parents may not realise is that the same values they instil in their children about life’s larger lessons are the same lessons that can make them financially responsible and help ensure their economic security,” Ms Schuyler wrote.

 

“It’s not just about money, but about values and behaviours: appreciating the difference between wants and needs, and the hard lesson that waiting a little longer for what you want is worth the time invested.”

 

The financial expert adds that one of the reasons why parents are so reluctant to engage their children in matters pertaining to money is because they think it may be a little over their head.

It’s certainly a given that the world of finance can be difficult to navigate, as it has the propensity to be institutionally complex. Moreover, the vocabulary of the sector can also be difficult to decipher – there is a lot of jargon after all.

However, Ms Schuyler argues that this isn’t about getting across the nuts and bolts of something that is challenging for young people and adults alike – what is more important is explaining the value of being financially-literate: spend only what you have, save for rainy days and bigger purchases and be charitable where possible.

“Talking with children about money doesn’t need to be complicated,” she elaborates. “It’s a conversation that can evolve over time, beginning with simple concepts. The important thing is to start early and provide the context for the values and behaviours that will shape a child’s life-long approach to finances.”

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