March 5, 2021
Discussing family finances isn't always easy, but it's essential to avoid any unexpected surprises. We look at ways to involve everyone, including children, in these discussions.
Too often, when families talk about finances, it means dealing with some tense moments. “How much did you spend on that?” Conversations can be more like unplanned outbursts that do more damage than good. Talking about finances with your loved ones is hard. We understand that.
That’s why it’s important for families to discuss money. Those that do are often able to steer clear of these kinds of situations. To achieve financial harmony, communication is key.
By engaging in early and frequent conversations about money, you can build financial literacy within the family. Having regular discussions about money also helps demystify financial topics, making them less intimidating and more approachable.
It also means there’s less chance of conflict or surprise expenses. Talking about money allows families to address financial challenges proactively and work together towards shared financial goals.
Talking about concepts such as saving, spending, and giving to charity helps determine your family’s financial values as well.
Explaining the importance of setting both short and long-term financial goals, such as saving for a trip, post-secondary education or retirement helps everyone stay on the same page.
Incorporating children into financial discussions can have significant long-term benefits for their financial literacy. Start by involving them in age-appropriate discussions about household finances, such as budgeting for groceries, you can use online flyers to compare prices at different stores with them.
You can also ask for their opinions when planning for family outings. Encourage open dialogue and ask for their input. Present them with options and explain that you may be able to do some things more often than others because of the price. This will help them understand the value of money.
As children grow older, involve them in more complex financial conversations, such as saving for college or planning for major purchases. Teach them about budgeting, saving, and investing, and encourage them to set financial goals of their own.
Creating a thorough budget is essential for managing family finances effectively. Start by identifying all sources of income, including wages, bonuses, and any additional income streams. Then, list all monthly expenses, such as rent or mortgage payments, utilities, groceries, transportation, and healthcare costs. Don't forget to factor in irregular expenses like car maintenance or annual subscriptions.
You can use our budget planner to help you.
If you live with adult children or elderly parents, open communication is key. Have an honest discussion about combined incomes and expenses to ensure everyone is on the same page.
In cases where an adult child faces unexpected unemployment, discuss how the family can collectively support them financially or help with household tasks to alleviate financial strain. Establishing clear roles and responsibilities within the budgeting process can foster transparency and cooperation, leading to better financial management for the entire family.
We know talking with your partner about debt isn’t easy in fact a BDO Affordability Index from 2023 found that financial issues were the number one hardest topic to discuss for Canadians.
While it’s likely you both have debt, some of it may be your own, some of it theirs, and some of it may be joint debt on a mortgage or car.
It's important to approach the topic with empathy and understanding. Remember, you're in this together, and tackling debt as a team can bring you closer to your financial goals.
To start, gather all the necessary information about your debts. Make a comprehensive list that includes the type of debt, the interest rate, the minimum monthly payment, and the outstanding balance. This will give you a clear picture of your financial obligations and help you prioritize which debts to focus on first.
Everyone wants to save more and cut their spending, especially now with high inflation. The best way to do this, of course, is to cut back on unnecessary spending. Discuss with family members how they can help in ways big and small.
That might mean carpooling or using public transit to get to work or school to save money on gas. Taking shorter showers to save on water. Even turning off lights when not in use and unplugging electronics can make a difference as well.
Of course, everyone is also looking for ways to save on food these days. One of the biggest ways to save is to reduce food waste. Seriously, it can save you hundreds of dollars a year. Discuss with children the value of eating leftovers and properly storing food.
Managing family finances can sometimes feel like walking a tightrope, particularly when it comes to striking a balance between wants and needs.
One of the first steps towards achieving balance is ensuring that everyone understands the difference between the two. Engage your children in discussions about essentials like food and clothing. emphasizing their importance.
You can encourage them to think critically by asking questions like, "Is this a want or a need?"
Establishing financial goals together as a family can provide a framework for making decisions about wants and needs. Whether it’s a family vacation, saving for college, or an emergency fund, involve everyone in the discussion. This will foster a sense of ownership and shared responsibility.
March 5, 2021
Discussing family finances isn't always easy, but it's essential to avoid any unexpected surprises. We look at ways to involve everyone, including children, in these discussions.
