The current cost of living crisis is impacting us all to differing degrees. And it’s important that we develop a true perspective on how our fellow Australians are faring throughout this.
For some, on the wealthier end of the spectrum, inflation is merely re-shaping our investment decisions.
For the middle class, it is having significant pressures on day-to-day costs, meaning that luxury items must be struck from the budget.
For those worst off in Australian society, the cost of housing and essentials is creating a true knife’s edge scenario.
How do we educate our children on the impacts on their peers?
Whilst the spending habits of your family may not have been visibly slashed, those of your children’s school colleagues and social media contacts may’ve been. Accordingly, financial empathy becomes a “soft skill” that is increasingly important.
Our children are growing up in a digital bubble. Social media incessantly promotes the latest trends, inadvertently pressuring them and skewing their perception of financial realities. The unique challenge for parents: how to cultivate an environment of understanding and empathy towards differing financial situations.
Discussions with our children about financial empathy aren’t just about teaching them the value of money — they also gain a deeper understanding of people’s varied economic backgrounds. This education is crucial in navigating social pressures with grace and understanding, rather than ego or envy.
Such discussions lay the groundwork for more compassionate perspectives toward peers who might not have access to the latest iPhone or Gucci handbag.
Many years beyond this cost-of-living crisis, this may provide broader life lessons on empathy for inequity in all its forms.
What are practical steps you can take to drive this?
The practice of financial empathy extends beyond mere conversation. Encouraging children to contribute to household budgeting and to participate in charitable activities like donating clothes are practical steps towards developing their empathy and financial literacy.
These hands-on experiences not only teach them about the value of money but also about the importance of giving back and understanding the diverse economic landscape of their community.
And of course, we all have room to lead our children by example, in our own attachment to consumer goods, brands and our vocalisations of how fashionable we see those around us to be.
