Don't avoid talking to your children about money

Talking about money is avoided in many households despite other taboos around sex and religion being more openly discussed. However, discussing money with children helps them learn.

Money talk is one of the few remaining taboos as more than half of Australian parents avoid discussing their financial situation with their children, new research has found.

A Suncorp study discovered that while age of children was the biggest barrier for money discussions among younger mums and dads, parents aged over 55 were not talking either — 24 per cent of them said they didn’t want to make their children feel uncomfortable, 24 per cent said the children were not interested, and 24 per cent said they were not interested.

Just one in 10 parents said they would disclose household salaries to their children.

Suncorp behavioural economist Phil Slade said keeping quiet about money was a cultural issue — “it’s just not something that we do” — although people were more willing to discuss other taboos such as sex and religion.

Suncorp behavioural economist Phil Slade says money talk is a cultural issue.

“There’s a social norm that says you don’t talk about your finances to other people. It doesn’t make any sense but that’s what we do, and that norm is a strong driver of behaviour,” he said.

“There’s a high level of judgment that we put on how much we earn.”

MBA Financial Strategists director Darren James said most families and friends were not comfortable talking about personal finances, and some young children could not comprehend the large sums involved with wages and house prices.

“Some parents have a concern about if their kids see them as having money around, what that leads to. Money changes people,” he said.

Discussions about money should not just be “a flag waving session”, but it was a good idea for children to understand their family’s financial situation, Mr James said.

MBA Financial Strategist Darren James says some parents worry how money may change their kids.

“The more you can keep things open, the better off you will be, but only do it if there’s a benefit.

“There’s a lot of focus through school education on getting the right career, but the only advice they learn about how to manage money is from their parents. Generally if parents aren’t good at managing money, you tend to see that flow through.”

Suncorp’s research, linked to the release of a new Suncorp money management and insurance app, highlighted financial overconfidence among some parents, with just 3 per cent not feeling they don’t know enough, and 2 per cent not thinking they are a good role model.

Mr Slade said children did not think of their parents in terms of how much money they earned.

“By not sharing it with your kids you are limiting a lot of learnings,” he said.

“Because we didn’t have parents talking to us we often don’t know how to talk about it with our kids.”

How to talk money with children

• Be transparent — it breeds better decision making.

• Start with stories about good, bad or funny financial decisions.

• Express yourself and ask the children how they feel about money talk.

• Make money conversations about being better rather than trying to beat yourself up.

• Focus on the family’s long-term wealth and stability rather than individuals.

  
  Source: Suncorp

Originally published as Why money talk is taboo at home