How often does the topic of money come up around your dinner table?
Less than half (49%) of European couples find household finance meetings exciting, according to ING. That’s okay, not everyone is interested in dissecting their income and outgoings.
However, 34% find financial talk boring, which may be contributing to less co-ordinated household spending and miscommunications around financial planning.
Why hold financial discussions?
Productive financial discussions:
- Make sure everyone is on the right page
- Acknowledge individual and family wants, needs and goals
- Instil financial responsibility into younger generations
- Encourage healthy financial habits
- Streamline the household budget
- Discover any underlying financial difficulties
Holding regular financial discussions gives everyone the opportunity to discuss how your family manages money and offer solutions to any issues you may be facing.
In addition, ensuring that every member of the family is involved in making financial decisions is a great way to get younger generations thinking about money and developing positive budgeting habits. Especially as the financial education given in schools is limited.
A recent study from Prudential shows that children as young as five are allowed to use their parents’ contactless cards, and 18% even know the PIN.
The research suggests that this cashless-ness may be affecting the way children learn to handle their finances. With everything being paid for with a tap of plastic, 78% of teachers and 37% of parents say that children are lacking an understanding of money and its value, with parents worrying that:
- Children think money is instantly accessible (37%)
- Children think there is always money available (37%)
- Children aren’t learning how to use cash (24%)
- Contactless encourages children to spend more money (28%)
- Cards don’t help kids exercise their mental mathematics as cash does (28%)
Seven tips for an engaging and practical family finance meeting
1. Make it regular
Having a financial meeting and opportunity to discuss how the household budget is run is a great idea, but to be successful, it needs to be an ongoing process. Try to make these meetings regular and keep track of how well any ideas have worked.
2. Involve everyone
Even though children are not renowned for their ability to pay bills and make savings deposits, it is worth encouraging people of all ages and abilities to engage in the conversation. The best way for less responsible family members to learn is to involve them in decisions and let them start practicing their skills early.
3. Set goals together
A point of reference saves time worrying about where to start each meeting. Start the first one by reviewing what comes in and what needs to go out, then set goals together which can be reviewed at the start of the next meeting.
4. Invite a new perspective
How does a three-year-old think that you should save for a holiday? They probably won’t suggest a Cash ISA, but what they do say might surprise you! Make budgeting fun for everybody and try not to dismiss an idea just because it comes from a toddler. How you act now could affect the way they engage with finances in the future, so make sure it’s a positive experience.
5. Invite questions
Anybody attending the meeting who doesn’t work or pay bills may be confused about certain aspects of adult life. So, be ready to answer lots of questions about taxes, interest and why you can’t just buy sweets instead of paying bills!
6. Be open and honest
Household budgeting won’t work if one of you has secret debts or issues that you haven’t discussed. When budgeting as a group, everyone needs to put their cards on the table and say what they are working on as an individual, so that a plan can be put together which meets everyone’s needs and obligations.
7. Keep it fun!
Grab a cuppa, put some snacks out and try to make these financial meetings something that everyone can look forward to. There shouldn’t be any reason for stress or arguments, but if either do start to become an issue, take a break and regroup once you’ve all calmed down.
Time to involve a professional?
Not all financial issues can be solved with a cup of tea and a family chat, as nice as that would be.
If you’ve got bigger decisions to make, or if you just need a bit of guidance to boost your self-confidence, it’s time to see an independent financial planner.
So, get in touch, we’re ready when you are.