With rising costs of living and a tighter budget, how can I teach my child the cost and worth of things?
Last week, my daughter started asking questions about her upcoming eighth birthday party. I had planned on something small but special since she’d celebrated her last two birthdays in lockdown, but a quick glance online to gather ideas for “little girl parties” sent me into a panic.
On my socials, custom backdrops, tiered cakes, and favours that probably cost more than the last pair of pants I bought ($49.95, Sportsgirl) felt like the rule and not the exception, and I found myself dreading the day that my child would ask for something her friends had, that I couldn’t provide.
I am not the only one. While we’re all currently dealing with higher interest rates, soaring fuel prices and a rising cost of living, (plus whatever effects the pandemic or floods had on our lives), those with children might find their financial woes compounded by their children’s wants – unsure how to tell them that the super-pricey gadget their mate just bought just won’t cut it in the family’s current budget.
So how do you have this awkward conversation with your children, particularly if they socialise with children whose parents aren’t stretched as thinly as you are?
Start with “basic commerce lessons around needs, wants, basics and discretionary spending in a way that is appropriate for the young person’s developmental level,” says Jocelyn Brewer, a psychologist who started her career as a commerce teacher.
She says that we can help children to better understand money by making them aware of the value of different items using everyday things such as supermarket produce.
“Noticing things like the cost of fruit and veggies, especially when things are in and out of season, [helps] them understand basic economic principles like supply and demand, and helps them have a sense of fluctuations and buying choices,” she says, citing highly priced rapid antigen testing kits or the fluctuations in the price of strawberries as an example.
Brewer says that fitting in is really important to many children, but understands that explaining why we can’t keep up with others who might be better off is easier said than done in the “era of hi-tech devices and new-release gadgets”. She believes that discussing what’s in line with the family’s values helps.
“We can talk to kids about trends and how quickly they pass, the impact of fast fashion on the environment and importance of purchasing quality goods,” she says. “Often social media is just one huge advertisement so having not only financial but digital literacy to spot this – and inflated prices – are helpful skills.”
David*, 36, says that the rising cost of living has made him feel guilty about what he can say yes to, even with government incentives like New South Wales’s Dine and Discover vouchers.
“We have school holidays coming up and the children have asked to see two different films,” he says. “We have to factor in a total of 10 tickets over the two movies 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 that there’s no one-size-fits-all approach to these conversations. Providing relevant examples tailored to your child’s interest, she says, can help drive your point home, provided you do so without “too much salience around money” that could cause children to worry. 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” for something bigger.
“We need to be wary of creating any sense of guilt or burden young people might feel around the cost of their lives,” she says. “We don’t want people to feel unworthy or unvalued, but simply focus on the maths equation side of things and make an adventure out of doing low or no-cost activities.”
Brewer says that explaining that we should forgo some things or buy cheaper versions of everyday things in order to save up for bigger items – be it a shiny new gadget or a family holiday – is also a way to teach your children self-control, delayed gratification, and goal-setting.
David says he will mitigate the pressure he feels by scheduling an at-home cinema night with his children as soon as one of those two movies becomes available on a streaming service, with homemade popcorn and a build-your-own ice-cream sundae station to make it a little more special.
“No parent wants to say no to their kids,” he says. “I’m dreading the stage where my eldest child starts asking for iPhones and limited-edition sneakers, but if we build that awareness around cost and worth from now, then hopefully when they are older, they will understand that sometimes getting something big in 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, but about learning to live within your means.
“Some people having more than others is a fact of life,” he says. “Adapting to situations that might be out of your control is important, but I have more than my parents did, so I’ll also remind them that things don’t stay the same forever and could get easier with time.”