With the cost of living rising and a tighter budget, how can I teach my child about the cost and value of things?
Last week my daughter started asking questions about her upcoming eighth birthday party. I had something small but special planned as she’d been celebrating her last two birthdays in lockdown, but a quick swipe on the internet for ‘little girl party’ ideas sent me panicking.
On my socials, custom backdrops, tiered cakes, and favors that probably cost more than the last pair of pants I bought ($49.95, Sportsgirl) felt like the norm rather than the exception, and I dreaded that Day my kid would ask for something her friends had that I couldn’t provide.
I’m not the only one. While we’re all grappling with higher interest rates, rising fuel prices, and rising costs of living right now (and whatever impact the pandemic or flooding has had on our lives), those with children might find their financial woes compounded by their children’s desires – don’t know how to tell them that the super expensive device their friend just bought doesn’t fit the family’s current budget.
So how do you have that awkward conversation with your kids, especially when you’re dealing with kids whose parents aren’t as busy as you are?
Begin with “basic trading instruction in terms of needs, desires, fundamentals, and voluntary spending in a manner appropriate to the young person’s developmental level,” says Jocelyn Brewer, a psychologist who began her career as a trading teacher.
She says that we can help children understand money better by making them aware of the value of different things using everyday things like supermarket products.
“Noticing things like the cost of fruit and veg, especially when things are in and out of season, [helps] They understand basic economic principles such as supply and demand and help them to get a feel for fluctuations and purchasing decisions,” she says, citing high-priced rapid antigen test kits or the fluctuations in the price of strawberries as examples.
Brewer says that adapting is very important for many kids, but understands that in the “era of high-tech devices and re-imagined gadgets,” it’s easier said than done to explain why we’re not moving with others can hold, who are perhaps better off. . She believes it is helpful to talk about what is compatible with family values.
“We can talk to kids about trends and their ephemerality, the impact of fast fashion on the environment, and the importance of buying quality goods,” she says. “Often social media is just one giant advertisement, so not only financial but also digital knowledge is helpful in recognizing this – and inflated prices.”
David*, 36, says the rising cost of living has made him feel guilty, which he can say yes to, even with government incentives like New South Wales’ Dine and Discover vouchers.
“We’re going to have school holidays soon and the kids have asked to see two different films,” he says. “We have to factor in a total of 10 tickets to the two films for the family, a visit to the candy bar and the cost of other school holiday activities with friends. It all adds up.”
Brewer says there is no one-size-fits-all approach to these talks. Providing relevant examples tailored to your child’s interests, she says, can help get your point across, provided you do so without “overemphasis about money,” which might worry children. For Brewer’s five-year-old daughter, this lesson means giving up the Kinder surprise eggs she’s obsessed with and using a reward chart to “save up” for something bigger.
“We must be careful not to create any guilt or burden that young people might feel about the cost of their lives,” she says. “We don’t want people to feel unworthy or worthless, we just focus on the side of the math equations and make an adventure out of low-cost or free activities.”
Brewer says declaring that we should give up some things or buy cheaper versions of everyday things in order to save up for larger items — whether it’s a shiny new gadget or a family vacation — is also a way to teach your kids self-control is delayed satisfaction and goal setting.
David says he’ll ease the pressure he’s feeling by planning a home movie night with his kids once either of these two films are available on a streaming service, complete with homemade popcorn and a build-it-yourself sundae station to make it a little more special .
“No parent wants to say no to their children,” he says. “I’m dreading the stage where my oldest child starts asking for limited edition iPhones and sneakers, but if we build that awareness of cost and value from now on, then hopefully they’ll understand that sometimes it’s a big thing, when it is older. Life is about making small sacrifices along the way.”
Being honest and transparent, he adds, helps them understand that it’s not about saying no because you want them to be unhappy, it’s about learning to live within your means.
“Some people have more than others, it’s a fact of life,” he says. “It’s important to adapt to situations that might be out of your control, but I have more than my parents, so I’ll also remind them that things don’t stay the same forever and might get easier with time.”