What do you think? Should you discuss finances with your children?
Photo by: goat_girl_photos
One of the frequent topics of discussion between my wife and I is whether we should discuss our finances with our children and if so, how much should we discuss. We’ve been having this discussion off and on since our oldest son starting understanding what money was. We both agree that we should discuss our finances with our children but we differ on how much we should disclose. What’s even more interesting is that we both seem to waffle back and forth on the topic.
My wife and I both grew up in households where our parents talked about their money situation and taught us the basics of finance, but didn’t disclose any information about how much they made, their savings, their debt, or their overall expenses. I fully understand the reasoning for this, as sometimes letting your children know how much you make can result in responses like “Why can’t you buy me the new Xbox 360, you make $70,000 a year!“. It can even result in your whole neighborhood knowing how much you make and how much debt you have.
On the other side of the fence are those that believe you should disclose everything to your children, in particular your older ones. They should be fully involved in the family finances, knowing how much comes in, how it gets allocated, saved, etc. The benefit here of course is that you child knows the details and can understand why, even though you make $70,000 a year, you can’t afford that Xbox 360. I’ve even read of others that allow their children to have input into the budgeting process.
We both waffle back and forth on these two perspectives and right now we’ve settled somewhere in between. Our children know we have debt, but don’t know the amount. They know I make pretty decent money, but don’t know how much. Our older boys pretty much know the details of our monthly expenses, such as the cable bill, phone bill, utility bills, etc. We’ve shared this with them to help them appreciate things a little more.
This whole issue is a huge struggle for us, as we want to teach our children about money and help them to grow up knowing how much things cost and understanding that just because you make $70,000 a year you don’t have $70,000 to just go blow on whatever you want. On the other hand though, I don’t want them to worry about our finances. I want them to be able to be kids, after all they have their whole adult life to deal with money issues.
What really got me thinking about this is, yesterday my 13 year old was researching being a pilot in the Air Force on the internet for a school project. He loves planes, and right now that is what he wants to be when he grows up. He was very excited when he learned how much pilots can make. He came running into the room and said something like “Dad, pilots make around $75,000 a year. Man, that’s a lot of money, way more than you make huh?” I wanted to answer him honestly, but at this point he has no clue how much I make. I wanted to tell him. I wanted to help him understand. I ended up somehow dodging the question. But I’ve been thinking about his question and on what I should do frequently.
Where do you stand on this issue? Do you have kids? If so, how much do you share? If you don’t have kids, but may someday how will you handle it? Do you have a really great or really bad childhood experience as a result of your parents sharing or not?
I’d love to hear your thoughts and perspective as I’m sure it would help my wife and I further consider how we need to handle money with our 6 kids. Your perspective will also help me figure out whether I should follow back up with my son or not.