Kids & Mortgages: Setting the Foundation for Positive Mortgage Experiences

Have you thought about what your children think about your family home? Do they realize what was involved in the purchase process? That payments have to be made to keep a roof over their heads? Chances are, unless you have explained it to them, they haven’t given it much thought.

Teaching children money management skills early sets the foundation for their future experiences as a home owner. These three tips can help you start a discussion on the basics of saving and owning a home: 

1. Offering children an allowance for doing household chores is an excellent opportunity to demonstrate the concept of “earning an income in exchange for doing work”. As children earn money for their piggy bank or bank account, they will begin to understand what saving means. And when they want to use their savings to buy things, they realize very quickly that they can only spend what they have saved. Relate this situation to your own, explaining that you work for the money you earn, and that money is divided up to pay for necessities first, followed by luxuries your family enjoys. 
2. Ask your children their thoughts about themselves owning a home one day. How do they respond? Then enhance their perceptions by setting some expectations: (a) to buy a home they need to commit to saving money for a down payment, (b) they need to plan ahead by being responsible with their money, (c) once they walk in the door of the house, the hard part is not over, they will need to make payments every month to keep the household running.
3. Avoid talking concrete numbers with your kids. Home prices, mortgage amounts and interest rates will go way over their heads. Learning solid money habits early will help them own a home one day.  

By involving your children in age appropriate discussions about finances, and providing guidance when they ask questions about money, you are nurturing a sense of financial responsibility. When it’s time for them to think about their own mortgage, they will be better prepared to begin that process!  

 

Rhonda Stark, Mortgage Agent, Level 2, Mortgage Intelligence,
(519)868-6794, www.rhondastark.ca, www.facebook.com/YourMortgageResourceConnection/