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Why now is a great time to talk to your kids about money

Many parents are using the pandemic and its stress on family finances to talk about the value of money and the importance of budgeting.

TAMPA, Fla. — The pandemic has been tough for a lot of people, especially when it comes to money. Many families have been struggling to make ends meet or finding money a bit tighter than they used to.

It turns out, families facing some financial hardships have been using this opportunity to teach their kids about the importance of budgeting and spending. 

According to a new Parents, Kids and Money survey, 43 percent of families say they increased the number of conversations about money with their kids.

Financial planner Celine Pastore says conversations about money should happen not only when money is good, but when it's tight too, "That's even more of a reason to have a conversation if you're in a family struggling financially that's a great opportunity for children."

Pastore says early conversations about the value of money and how to spend and save it increases the chances of financial success later on in life. She says you can start teaching kids about money as young as four or five years old when they can count and grasp the concept of spending. 

Start by teaching them about cash and coins and how they're used. Later on, if your family uses debit cards or credit cards to spend at the stores, explain to them how the cards factor into your bank account balances and show them store receipts.

An easy way to help your kids understand the importance of a budget and how it works is to include them in your grocery shopping. 

"Take them to the grocery store, say this is how much money we have to spend, this is how long our food has to last and say help me determine what we can do and how we best spend this money," said Pastore.

Another way to help kids understand the value of money is to create opportunities for them to earn money through chores or small jobs like babysitting or cutting the grass. Don't only focus on spending, teach them how to save as well. Around the age of 12 or 13 is a great time to start teaching your kids about saving for retirement and explaining 401k plans and IRAs.

"The people with the most success in retirement are the ones that started when they were younger," said Pastore.

Another important tip in having these conversations about money is identifying your family's values. If giving and charity is important to your family, work that into your conversations about spending.

Most importantly, model good behavior when it comes to finances. For example, don't tell your children you're spending too much money on something like takeout but continue to splurge and spend on takeout. Doing so sends mixed messages, so try and model responsible habits for your children.