Friday, February 6, 2015

Sharing the wealth with your children

I try very hard not to think about other people's money. I don't like to speculate on how much my coworkers earn or how much my extended family earns. I grew up believing that it was rude to ask people how much money they made, and that it was none of my business.

But there's a new theory that encourages parents to share their income with their children that I really like. The theory is that money (like sex) can be a taboo subject when you are growing up. That sense of secrecy around parents' financial situation can become a source of stress for children. If the subject isn't addressed, you may be raising someone who is unable to handle budgeting or financial decisions as they become an adult.

I already have age-appropriate conversations with my son around sex. It's time for me to start those age-appropriate conversations with him around our family's expenses. Clearly, I can't tell my almost five-year-old what my yearly salary is (five-year-olds are not known for their discretion skills), but I can start him off slow. Here are some of the ideas I am trying out:
  • Use cash at stores. This is a bit of extra work for me, since I usually use my debit card, but worth it for now. My son knows that money has different values, but because I use my debit card, he doesn't see money in action. With cash, he can see the money being spent.
  • Make value equations for him. The value of his weekly school tuition might not make sense to him, but if I show him how many toys we could buy with his weekly tuition (and then remind him that education is more important than toys), I think he would start to understand.
  • Ask him questions back. If my son has a question about money, the best thing I can do is ask him, "Why do you ask?" His answer will give me the time I need to frame my response and let him know that his curiosity is OK.
How do you talk to your children about money? Share your tips with me in the comments.

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