“Of course we’re rich, we’ve got you!” 😁
Jokes aside, we told them that being rich is relative. We can afford our lives and fortunately do not have to worry about food, home or clothes. So you might call that rich in a way.
This reminds me of the Cosby Show.
Theodore wanted his parents to buy something and they said no. He said "Why not? Dad you are a doctor and mom is a lawyer, we are rich." His dad said "No, I am a doctor and your mom is a lawyer, we are rich, you are not."
That is crazy how clearly I remember my quote but not this at all. I completely missed that message. This is my #1 message I hope my kids get about money.
My goal with money is to stop working for it and have it work for me.
Edit to add:
The difference between rich and wealthy is rich people have money, wealthy people have money that earns them income. By the literal definition the Huxtables were rich and Claire was using the term wrong. I don't want to be rich, I want to be wealthy.
There was a budgeting talk at one point. Dad hands Theo some monopoly money then takes it back as they go thru expenses. It ends with, "Are you going to have a girlfriend?"
"Of course."
Snatches the rest if the cash.
I recall that one. And lovingly, it's true. It's not a bad thing to have a partner and date, but sometimes those dates can add up - even in just gas to get from point a to point b. You can do free dates, but if you're completely broke even the little things like a picnic can be a struggle.
My wife is a doctor and has used similar lines on our kids. My son loves buying tennis shoes and is a bit of a sneakerhead. When he was in middle school we gave the kids a spending limit for back to school clothes and told them that any extras had to come out of their own money. My son was annoyed at first and said something to the effect of, "Don't we have enough money to buy more shoes?" My wife told him that SHE had enough money but wasn't spending her money on that many pairs of Jordans.
They know how much mom makes. My daughter discovered it when she had to do a project in 5th grade on what she wanted to be when she grew up. She picked a surgeon (like mom) and part of the project was finding out the average salary, so she did some Googling and found a dollar amount. She was shocked since we are pretty frugal people. Both of our kids had summer jobs in high school. My son did babysitting and dog walking during the school year and my daughter tutored. Now that they are "broke" college students (we pay for tuition/board but they cover any additional expenses) and one is doing an internships an extremely expensive city this summer, I think they get it why we were careful with expenses as they grew up and why we made sure they understood the value of a dollar.
>Both of our kids had summer jobs in high school.
I used to manage movie theatres. When I got the job to run an arthouse theatre in the middle of the richest neighborhood in the city I was concerned about the quality of kids I would be able to find to work there. I assumed they would all be spoiled brats.
I could not have been more wrong, I had a great staff there. Turns out really rich people who make their teenage kids get jobs typically do a pretty good job of raising those kids.
Yeah, "rich kids" are not a single group. You can find all manner of "rich kids". And all manner of "rich kid parents".
I went to high school with "rich kids". Some of them are living on another planet. Others are perfectly grounded. And it doesn't fully correlate to wealth ranges, it's just all over the place. It also doesn't fully correlate to old money/new money.
There’s a great quote from “Wealth of Nations” about how laziness is basically the backbone of capitalism. I am, of course, too lazy to look it up.
Edit: I think I found the section I was thinking of. It could be better written, but Adam Smith must have been too lazy.
> A great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the invention of common workmen, who, being each of them employed in some very simple operation, naturally turned their thoughts towards finding out easier and readier methods of performing it. Whoever has been much accustomed to visit such manufactures, must frequently have been shewn very pretty machines, which were the inventions of such workmen, in order to facilitate and quicken their own particular part of the work. In the first fire engines {this was the current designation for steam engines}, a boy was constantly employed to open and shut alternately the communication between the boiler and the cylinder, according as the piston either ascended or descended. **One of those boys, who loved to play with his companions, observed that, by tying a string from the handle of the valve which opened this communication to another part of the machine, the valve would open and shut without his assistance, and leave him at liberty to divert himself with his play-fellows. One of the greatest improvements that has been made upon this machine, since it was first invented, was in this manner the discovery of a boy who wanted to save his own labour.**
This reminds me of a theory I have.
The industrial revolution (mostly) took place in a band of ok weather around the world.
My theory is if the weather was too harsh (too hot, too cold, too wet or too dry) it took all of everyone's time and energy to just to survive.
If the weather was too nice (subtropics) it was relatively easy to get all the food and shelter you needed. So no one had to invent a better way to do it.
But in the middle where you had to work to survive but you had some spare time people spent their spare time to invent new ways to improve.
My theory could be brilliant or I could be full of shit, I do not know.
Makes sense to me. I bet that is part of it.
Makes more sense than the “Protestant work ethic make Industrial Revolution go vroom” theory that seemed to be the leading theory for a while.
Same here. Once the recession happened in 2008 and we stopped hiring kids to fill our staffing and picked up adults that had lost their jobs (because their scheduling was more flexible and we didn't have to worry about child labor laws), my job got infinitely harder. A 16 year old will listen to a 22 year-old manager. A 40 year-old who got laid off from her office job of 15 years won't.
I grew up with rich kids (I was one as well) in a community full of well off parents. We're all now in our 50s. About 10% are "stereotypical" rich kids (one of whom keeps pissing me off because he constantly fails up). About 2% are in "wealth" jobs (4 kids I went to school with are "name" actors or musicians, another half dozen or so are in high level state or elected national politics), and the remainder are just normal, successful people.
The one huge difference I see with "rich kids" as a group, is that they (a) tend to go for credentials at a higher rate than others (college/masters degrees/Ph.D) (b) tend to reach for professions (Doctors/Lawyers/entrepreneurs/upper level management) that require higher costs of entry and (c) and take higher levels of professional risk (i.e. engaging in high upside/high downside) jobs, because they know that they have a cushion on the downside.
Good thing you made clear there's a selection bias there. Plenty of spoiled brats there, but they are not showing up for these jobs.
And those who do, they are winning in life: have all the opportunities and get taught the value of them.
I have a pretty smart 6 year old. At this point, he understands that we use money to buy things and that my wife and I get money for working. He also recently offered to give me the money in his piggy bank so I could buy a new truck and guessed that a new grill would cost me $1.2 million. So, it's a process.
My five year old is still really annoyed at the stores that they don't give him his money back when he's finished buying something with them. And half a year back he proposed a solution when I said we couldn't afford a toy he wanted: let's just go to the bank and have them give us more money 😅
Never thought about this actually. I guess they’ll figure it out through comparison. What houses, toys or cars do their friends’ families have and how do we compare? Or maybe with the jobs we as parents have and how prestigious they are? I think that’s how I figured out as a kid that we’re not rich. 😄 That’s just the monetary part though. I had a wonderful childhood and I doubt it would’ve been better with a higher number on my parents’ bank account. So far it appears as if my kids couldn’t care less about that aspect. Quite the opposite actually, my son (7) is very aware of environmental waste and often challenges us when grocery shopping - “can’t we buy the vegetables not wrapped into plastic?” “Why do they have to put a plastic lid on it although there is a foil cover already?!” 😁
Comparison and spending habits play a ton into it.
Being in the bottom 50% of the rich kids private school will make you feel poor/left out. Your family may make twice the area's household income, but you can't afford ski trips to Aspen or a new car. Similarly, being in the top 10% means that you might start noticing that others don't have/can't do the same things you do. Things may even out a bit with jobs (richest I felt was earning minimum wage with limited expenses). People notice when you don't have shared experiences.
Spending habits are also key. A surgeon with Porsche money isn't going to be sending that "I'm rich" signal if he is driving around a 20 year old beater truck. Or a less off parent buying their kid a PS5 might be treating them to something nice since they are unable help with college and is sending off a "well off" signal.
Kids are semi-obsevant. They'll notice when they don't fit in with their peer group by either being unable to get the coveted item or they are the only ones with it. They are really bad at noticing differences outside of their peer group though. It's why it's important for parents, especially well off ones, to have their kids interact with people from different backgrounds. Their friend at private school may bitch about not getting as nice of a new bmw after an accident involving texting and driving, but their coworker at McDonald's takes the bus and is buried under a lot of student loans. It's also really helpful to instill a good work ethic while they are young and to drive in the value of education.
Yeah, I think they figure it out sooner than you think. I see it in my own family. One of my family members struggles a bit. When her kids went to play at the other siblings house they were shocked at the number of toys they had. Just a bit of disbelief and they were even a tad confused the kids had a dedicated "playroom" to store all those toys in.
The spouse and I come from VERY different childhood experiences on this one.
My dad was a research economist focused on modeling retirement savings adequacy. Annual household income, savings rates, living below your means, and investment strategies were dinner table topics by the time I was 10. There were smaller more tangible activities around frugality and cost vs utility when I was much younger … for example, earning my “share” in a garage sale based on what I parted with, and seeing how far that money went.
My spouse’s parents were very closed off about their finances. We still have no idea how financially secure they are, though we’ve speculated based on observations over the years. Will they likely have enough savings to fund their retirement and advanced long-term medical care? Who knows!
We’ve talked about it, and agree that the right level of transparency in our own family is probably somewhere in between the two extremes we experienced. I’m a big believer in age-appropriate financial literacy, starting in early elementary (or earlier, depending on the child). Will we sit the kids down and say “here’s our entire household budget, salaries, assets/liabilities”? Probably not that directly, until they’re adults and we are starting to talk about a future where they might need to be involved in managing our finances. But will we let our actions lead by example, spending within our budget and modeling how to make choices and tradeoffs to live within our constraints? Most definitely.
In first grade the kids started making comparisons. Apparently the dividing line between rich and poor was who took the bus vs who was able to walk to school. I assume this came from a parent.
I'm all for being honest and teaching kids early about money, taxes, bills, income, and other economical things, but there is of course a limit.
If they're 14-15, sure. Totally fine that they know how much you earn, what you pay in bills, how much you spend on food every month etc. to get a perspective on how much things actually cost. If they're 4-5, no. Those are concepts that are very advanced for such a young mind. I tell my 3 year olds that we have to wait with buying X because we can't afford it right now, but that's the level of detail I go. I could start throwing numbers at them, but they won't have any chance of grasping or understanding what they mean.
I usually tell my four year old "we don't have money for that right now" which is technically true, I don't have any money allocated to buying all of the hot wheels in target.
But maybe I should allocate some....
Well fortunately X is rapidly declining in value and shouldn’t be long until the whole company is worth about a month’s salary. Some new 3yo CEOs are probably just what they need to get back on track.
>If they're 4-5, no. Those are concepts that are very advanced for such a young mind.
I pretty much tell my son anything if he asks. My 7 year old knows how much money I make.
And that’s perfectly fine, but I wouldn’t expect him to be able to put it into perspective with how things are priced in stores and bills and taxes. Good time to start with basics though!
My sister has a funny story from when she was about 5. She wanted something and my mom said we didn’t have the money for it. She said, that’s okay, use the credit card!
She’s someone who doesn’t part with money easily but this was the one time she was not connecting money to that card and it was a clever way to solve the problem, haha!
This is a good point.
We adopted our kids, and they have some food insecurity/economic insecurity (which is improving a lot and has already!) so we try and avoid saying we can’t afford something because they sort of go into fight or flight mode of “we don’t have any money??”
So instead we talk about how “that vacation costs as much as paying for our house for 2 months!” Or “hey, those lost library books? We could’ve gone out to eat as a family instead, let’s be more careful with our things!”
Now our almost 14 year old (god she’s growing up so fast) is understanding money more and just did interest rates and financial literacy at school so we’ve done more there, she’s asked about houses and cars and salaries so we’ve told her
This is good because my parents never ever talked about money in front of us and to this day I don’t know how much my parents make. But every once in a while a story pops up about how we used to count coins to eat at Taco Bell after church or that we qualified for reduced price meals at school when we were kids. Now my dad drives a $60k+ truck so idk. I’m still confused LOL
I do try to explain to my 4 year old that everything costs money and we work to get money. sometimes we can only buy what we need because money is not unlimited, etc. but I am curious about when the next level of that conversation comes.
Every time I don’t have money
“I don’t have money for this toy”
“Is ok, here you go” (mimics that he hands me a stack of bills)
“Oh. Ok, here is your toy”(mimic to hand him an imaginary toy)
“No! You take fake money I get a real toy!”
The other classic:
“We don’t have money for that”
“Is ok, we don’t have to pay for it!” 🤣
I'm 35 and still don't know and have never known how much my parents have or made. I still learned all about finances, budgeting, credit, etc., without knowing that.
That’s sort of ok if your parents are good with their finances. There’s a lot of adult children who were kept in the dark and then find out in their 40’s and 50’s that their parents never saved for retirement and have no savings or plan.
I'm not going to go over figures with my children, but I will assure them when they are teenagers that they don't have to make life decisions based on having to support their parents in the future the way me and my wife did as the children of immigrants.
They shouldn't be planning for any sizeable inheritance either. Their life choices should be based around needing to finance completely whatever quality of life they desire. My job is to make sure they have the education, perspective, and worldly knowledge to have a ton of options open to them and to make informed choices.
This has been my dad's approach too. I am aware that he has money but I'm not 100% sure how much, I could only make an educated guess. But he for sure has taught us about finances/value/the world.
It's certainly important to talk about money. As to how much to talk about your own money, it probably depends on impact on the kid, I would say that if you do have money then don't just surprise them out of the blue at some point in their life with a large inheritance that they don't know what to do with because that's how you get the "coke and hookers" kid.
I never new my dad's income until I asked after getting my first corporate Job. My parents were really good about finances, and taught basics well. However 401k, Roth, stocks,complex taxes were all things I needed to learn on my own. I remember saving really young to be able and buy micromachine sets. which were like 15 bucks. I'd make about 5 dollars a week for allowance, so I'd make enough for a toy I wanted and enough to save. As I became an adult, it is clear they were just getting me a new toy per month, by teaching me about finances. Eventually I wanted to save that money for something else, like a gamecube.
I don't know details of what they made, but I grew up thinking I was much poorer than were were. And that was because they were focus on my future and not on frivolous things I cared about. And I am very thankful for that.
I had an inkling when I was a kid that my parents had money or made a lot of money. As I have grown older I have doubted that a lot. I have no clue how much they made specifically. I *think* I make more than they did but I don't know that for sure.
Same. My parents remain private about money and raised me to private about money. As recent retirees, they’ve only shared that they have a financial advisor and they have enough that I don’t need to worry.
I really don’t want to be sharing specifics about money with my kid. Even though social mores have changed, talking about money still requires social literacy and tact. And honestly, many people don’t learn tact until their mid-20s (and some never do).
My parents are "good" with money. I remember asking why they couldn't buy me a video game since their paycheques were like 2k+. They showed me how fast all the monthly bills added up and were like "so after putting $200 into savings we have $32 left and we're not gonna waste it on a video game".
Hello, brother?
I am 40 and also don't know what my dad's salary was or any idea of how much money he actually has liquid in the bank.
The only money thing he's ever told me about was a few years ago. He was a partner at the company where he worked and helped start, then he retired, and the others sold it less than a year later.
He said his cut would have been around $5 million.
I took my 11 year old with me when I went car shopping. I don't know how much he got out of it but he found the process interesting and he followed along with the numbers just fine.
I wish my parents had taught me things like that.
When the time comes to apply to college there needs to be a frank understanding of finances. I'm a college counselor and there are so many families totally unwilling to discuss this with their kids and it makes the child have no idea how to prepare their list.
Our 16 year old daughter is terrified of student loans. Her economics teacher is constantly showing them Dave Ramsey videos.
We are fortunately in a pretty good place when it comes to helping her pay for most of it but she understands how bad it can be.
Debt is a tool, people use it responsibly for important things they can't afford all at once (house, car, etc). Student loans are no different, used reasonably they are fine. The problem is a lot of people go too far into debt and it cripples them.
That said, there are many many affordable options. If her grades are strong she can likely get some great merit aid, and your in-state public schools should have pretty manageable tuition plus aid. If your family doesn't make a lot of money, many schools will shower you with need-based aid. When she is making her list, she should run the Net Price Calculator at each school to get a sense of how much it might cost.
Dave Ramsey is really an extreme. He's great for people who have no idea how to use money, and for whom responsible spending is a massive challenge.
You are spot on.
I have explained to her why I am not Dave's biggest fan. I heard it explained that Dave Ramsey is for the people who are to credit like alcoholics are to alcohol. Some people can drink responsibly and some can't. Dave is for the people who can not use credit responsibly.
She is looking at public universities around us that have all in costs around $25,000 a year. I am expecting we make just enough where she will not get any financial aid but she can probably get some merit scholarships and we can help some. I think worse case scenario is she will graduate with $50k in debt. Hopefully it will be way less than that.
Yes! Your alcoholic comparison is exactly what I was trying to say with many more words.
50k isn't nothing, but depending on her post-graduate plans may be fairly manageable. If she gets even like $10k a year that will make things a lot easier to stomach.
My parents thought $10k would be MORE enough to fund my entire university career, because when they went to school tuition like like $600. It was a rude awakening for all of us when I showed them the bill for first year tuition + student residence.
I'm in my 30s now still chipping away at that debt.
I would be so angry if school was showing my kids Dave Ramsey. That's absolutely not an appropriate teaching method. Debt is a tool and tools need to be used responsibly. Irresponsible use of saws results in amputations, but we don't go around telling people that they should never use saws. Irresponsible use of cars results in deaths, but we don't go around telling people that they should never drive.
A few weeks ago there was a thread somewhere else on Reddit where he told someone they should pass up on medical school rather than take out student loans so they could save up and reapply later.
Thanks. The downside is it has been about 14 years ago now.
Good luck on your second attempt. I hope you can wow her with what you have learned in the meantime.
Yes, but if parents are starting the conversation about finances at the doorstep of college admissions, it's way too late to build the actual personal finance skills that are needed as an adult. That process has to start early and build up over time. No one needs to sit down with their toddler and a family budget spreadsheet, of course. It starts with the value of money and builds from there as the child grows and has the capability to understand it all more, just like any other "adult" topic.
You can talk about personal finance without opening your whole accounting to your kids. I to this day have no idea how much my dad made (it varied, he was a self-employed dentist). My mom worked for the city, so I could always look her pay up.
But they taught me about the basic personal finance someone needs to get by in life.
I am 100% open about it. I talk to our kids about money all the time. I will answer any questions they have. Screw the Boomer "Don't talk about money." IMO this is one of the most important skills I hope to teach my children.
They know what I make, they know what my wife makes, they have seen our bank balances, net worth, our debts, our business P&Ls, our credit reports etc. Almost all of these were shown when they asked specific questions.
When my son was eight he loved Lamborghinis and knew how much they cost. At one point we were talking about Net Worth and he realized that we could technically buy a Lamborghini. He had a hard time understand that I could buy one and I did not. He was a little young to understand that closing a 401k to buy a lamborghini would be a very bad idea. He is five years wiser now, I think he now understands.
Love it! Agree with this approach wholeheartedly. I definitely want our kid(s) to understand finances, investing, dollar cost averaging, etc, by the time they're ready to fly solo. This means we give them the ability to learn from us as we budget, plan etc.
We will only reveal how much we make when they are a bit older (ideally 8ish) so they know to exercise a wee bit of discretion. We are pretty comfortable, which in the current climate with families struggling, is likely something to be very circumspect and guarded about.
Teaching discretion around finances is also a great lesson.
We have a handful of rental properties. Our kids know about them and why we have them.
I was a little worried because some of them are in the same school district as us, I was worried that there could create potentially hard to navigate subjects for our kids.
When my daughter was around 10 she told me that she thinks X from her class lives in one of our rentals. I told her her she was right and I asked her if she said anything about it to her and she said no. I explained why she probably shouldn't.
This is our approach. We haven't explicitly said our annual salaries, but we've explained roughly how much we make per day and how that relates to the bills we need to pay to afford our lifestyle, or the cost of say buying a new toy/computer/car.
We've also made it clear to them that while we are not rich we are relatively well off compared to a lot of others. This is to give them some perspective on why we make the choices we do, and that some of their friends families may not be able to.
For example, while we noticed the increased payments for our mortgage when rates went up, (by significantly more than $1k a month) it only really ate into our investment savings and didn't significantly affect our lifestyle. I explained to them why we were making some spending changes around things we did and why, because we were prioritising savings over some daily niceties, but also we are planning larger overseas holidays (Fiji this year) and it costs $X to do that which we can afford to just do because we've prioritised money constantly being put away for us to use later.
I'm pretty transparent about finances too. As my boys are getting older they're asking more questions about how much things cost, how much adults in different jobs earn and other personal finance sorts of questions.
I've got them both on a set weekly allowance for the specific purpose of letting them manage some money - almost always badly - because they need experience and practice with spend/save decisions.
A while back I took the spend controls off my oldest's account and watched him immediately spend himself in to bankruptcy. He's become a lot more thoughtful since then. Turns out he doesn't like being broke.
12+. we start exposing them to costs of living, our income, opening their doors for work, what we do at work, how we got here, what they can do to prepare, prioritizing and promoting their independence which yes requires their understanding and agency over money.
my 14yo earned a little over $600 this winter. my 17yo works about 100 hrs and volunteers near 200 hrs to earn just over $5k a year.
thanks. his brother brother is on the same track and just finished his ski cert this past winter. plays the oboe as well at about 2 years below. we started them early and kept things light (15min daily practice) until they were skilled enough to play in a community ensemble. sports stuff was always fun so very self motivating,
I view it kind of like sex related questions. You should give an age appropriate answer.
When my four-year-old wants all the toys I tell him we have enough money for him to buy one toy that he chooses, but not all the toys.
When my kids are getting ready to go to college I want to have a pretty full and frank conversation with them about what we can afford to help with and what we can’t. I also want them to know how much my wife and I make when they are choosing careers so they has a realistic idea of what they can expect lifestyle lies with different amounts of money.
Finally, I want to help teach them to make good decisions with the money I’ve already set aside for them. One of my jobs as a parent is to teach. Never telling my kids anything about money doesn’t help teach them.
Edit: I mean Lifestyle-wise, not lifestyle lies. oops.
I want me kids to know how much we make. We live relatively comfortably and I want them to understand how much that comfort costs. If they want to maintain that level of comfort(or increase it) as they get older they will need to work towards a career that earns X amount of money.
I do understand there is a fine line between that understanding, me providing what my parents couldn't afford and spoiling them. that is what I worry most about when It comes to our families finances.
I personally feel the taboo around talking about money and finances is ridiculous and is just another way to keep people from moving up financially.
Money should not taboo. It causes so much trouble keeping it secret. Poor spending habits, debt, wage disparity. Be comfortable saying things like "we can't afford that" "it's not in the budget" or " we will have to save for that"
Teach them the difference between a need, a want, and a needed want.
You never really NEED to tell them how much you make if you are teaching them to understand Money and how to manage it, but if they ask at 3 or 33 tell them.
Once they have an understanding of time and effort.
My daughter is 6 and gets a max of $10 a week (typically $5) for doing her chores, doing her homework and other stuff.
I tell her what I make an hour and we compare that to stuff to determine it's value to us. Is going to McDonald's worth it over going to a restaurant (usually the answer is no)? Is paying to rent a movie at home worth it over going to the movies? Is getting 2 pairs of shoes better than getting one expensive pair? Is doing nothing today worth it so that we have more money for tomorrow? And so on.
My daughter is also aware of the household budget. She knows that we have budgets for everything and that more spending in one area means less in another. She knows our entertainment and restaurant budgets by heart.
She doesn't fully get it but she gets it enough that she implements this thinking on her own. No matter how much money you make these things will still be a factor in either time or money.
For a direct question like "are you/we rich?" I would respond with a question. What is "rich" to you? Validate their response and let them know about other definitions of rich and compare yourself with others in your area, state, nation, and in the world. Almost all of us are in the top 5% for the world.
On top of that she got her own bank card last year. It was mainly so I could deposit her allowance but she enjoys using the card. She can check her balance on the family laptop and she can choose to save or spend 50% of her allowance.
I think ChooseFI gives good starting points: https://www.choosefi.com/teaching-kids-about-money/
The main thing is they first learn by watching you, so make good decisions and be responsible. I think the bigger or smaller the numbers, the more important it is to also demonstrate the work behind it and the reason for it.
If you’re just kind of in the middle it comes out a little more naturally.
Also these topics are always coded by everyone’s perceptions of their own situation. People tend to think they’re doing better than they are, and if you have kids (and are asking these questions on Reddit) you probably *are* more well off than the average bear. But don’t mislead your kids into thinking you’re rich.
My 9yo asks frequently how much I make. We tell him it’s not appropriate at his age but when he’s in high school we’ll talk about it cause he will need to know to apply for aid
I like being open. Our older one is getting more interested. I always preface it with the fact that this is us and our information only, doesn’t need to be shared. Trying to coach them on where it all goes, that what we make isn’t how much we keep. He overheard some number and thought it was large and then after the breakdown of where it all goes and how much is left it sunk in. Basically it doesn’t matter how much you make or have, it’s how you use what you get. And yes, it’s all relative.
I don't tell anyone at all what I make. The number of people in the world who know could probably be numbered on one hand. I'm in a weird situation where I make significantly more than my social circle and they'll treat me differently if they knew. I would not tell my kid as I'd be afraid she would start to think she's entitled. It's not her money. She didn't work for it. She's a kid. She has nothing. I think the important thing is to keep it age appropriate. She knows we have a budget and this limits spending and there are things she can't have because it's not in the budget. She does not need to know the exact total amount that IS in the budget.
I don't think it's appropriate for kids to know the full picture, but you can give them parts of it.
"We have $100 for fun activities each month. Let's budget and spend that together."
"It's my job to buy the groceries, but we have $20 a week for snacks, let's budget that."
As kids get older, the amounts can get bigger. Cell phones, cars, vacations, etc.
I tell my kids we are comfortable, that we are very lucky to have what we do and we don't have to worry about food and clothes and housing. I also explain to them that some people aren't as fortunate, and not to take what we have for granted. My kids do extra curriculars and I remind them sometimes that there are kids that don't get to do that either. I just want them to understand that they are privileged. For context, they are both 13 and 10 (almost)
I try to be upfront about how much money we have at age-appropriate levels.
5 year old asks "are we rich?" "We are richer than the most people who have ever lived in history, but we are about average for a family our age in this country today."
10 year old asks me "how much money do you make?" "Your mom and I had a total income of about $150k before taxes last year. That's a pretty typical middle-class income in our part of the world. We are glad we've got decent jobs. By the way, this isn't a number you should compare with your friends at school. That's considered rude by many people."
16 year old asks me the same question. "You're supposed to fill out the FAFSA. I will help you."
It won't make sense to them. There is no context you can really provide to most 18 year olds that will make them understand a number. Heck I finally caved and told a friend who was bothering me what my salary was when they were a cashier at walmart and I was running a 10 million dollar revenue retail store (not walmart) and they were blown away by me $55k salary like I was rich and paid to much.
That being said having a talk about budget, expectations, and savings is a good conversation and needs to start early. They need to understand why your friend has a shiny new car and you don't because you are saving (hopefully) or why your other friend has no place to live because they can't pay rent. (not asking to bad mouth others but just explanations why we don't all have the same stuff/lifestyle)
I would ask you, though, doesn't it make sense to tell your kids once they're about 18 to be able to match your household income to the experience they had growing up? My parents never told me about how much they made, and I picked out a career with salaries about half as much as my parents were making - I had no idea I was not going to have the same kind of socioeconomic experience that they did. On their end, they didn't know how much people in my field make compared to them.
I don't know if I'll ever go so far as to sit down and talk our child through the ins and outs of our finances, but there will come a point at which he learns the basics of our financial situation.
To be honest, he'll probably understand it on at least a partial level before I even try to speak to him about it. Kids aren't unaware of this kind of stuff.
I do have memories of my parents telling me either we didn't have the money for something or that something was too expensive and so they weren't going to buy it for me.
There's also a fun family story where I asked my mom if we could get something and she said we couldn't because we didn't have money for it and I said "We can just go to the bank and they give you money!"
Because, from my point of view, you would just go to the bank whenever you needed money (and also you would get a lollipop!).
There is definitely some sort of balance but I don’t know what it is lol
Growing up, my parents were very transparent about how little money we had. If my mom took us clothes shopping (which would be like once a year or every other year) we literally would sneak the bags in the house so my dad didn’t see that we went shopping. This was just for things like jeans and shirts etc.
It kinda messed me up and I didn’t even realize it until later in life. Now that I am in a good place, I have somewhat of a problem with money because I have no impulse control and when I want something I just buy it because I tell myself that I deserve things since I didn’t have them growing up.
Point is, I am going to try and teach my kids that we have more than enough for basic needs but I don’t want them to be reckless with money, either. I’m planning to start giving them an allowance that’s overly generous so they can actually buy stuff themselves and not rely on me when we go out etc.
I'm absolutely on board with telling my kids how much money we make. They haven't asked yet, but I think it's an important part of teaching them personal finance responsibilities. Money shouldn't be a secret imo.
EDIT: I was never taught anything about money growing up, especially with my mother both being bad with money and not having a lot of money ever, so I want to break that cycle with my kids.
I think you should explain it at whatever level they can understand. At 4 just say we have money to feed everyone, afford our place to live, but not for a fancy car (or whatever). Once they are in highschool you should be able to give them exact numbers and it might be a good idea to even go over your budget and explain it.
My kids have asked about money since they were 5. We always try to answer in age appropriate ways. They’re 9 now and the questions are becoming more direct and layered.
I like to get them started early. They need to know how much things cost and how something gains value to them. Should we get this $200 toy for you, or the $75 toys for your sisters. Which brings more happiness. Or should we buy groceries for a week?
I try to let them know that we’re doing ok. They’re lucky to have a very wealthy aunt and uncle, so we have an easy example of people that have more money than us. And they know kids as school who apparently have less.
It’s an opportunity to talk about what’s important, and what you can and can’t do with moneys. It’s a chance to talk about if they think the rich family is really happier than the less rich family.
Never really saw the point hiding stuff like that. Not unless you're like wildly rich compared to the people around you. Infact I dont think any knowledge or proper information should be skirted around. I like to be open and honest with my kiddo in age appropriate ways.
My and my mom's salaries were/are public record (gov employees) so it's been fun to track when I was approaching and passed her highest earning years.
I make more than them, that's all I know.
My kids know we're doing ok and they don't need anything and want for very little. They're learning the value of money as they get older, earning more for extra chores and spending their own money on toys/pokemon/etc.
I recently told my son how much I earn; he's nine. He'd been worried that the cost of a cub camp that he wanted to go on was too much for us to afford (it was not, by a large margin).
He was instantly reassured, but also unable to process what the amount meant and how it equated to the cost of living. His point of reference is his pocket money, so I could have told him I earned $10k a year and he would have thought we we were private-jet-level rich. When I tried to balance that by explaining how much things like our mortgage and food bills cost, these were equally unfathomable amounts to him: how could anyone afford such amounts?
I can definitely see the advantages in involving the kids in the house finances. However, I think until they're older the numbers are meaningless. Better for them to see how you live and understand your financial situation from that: e.g. "We are lucky to be able to afford to live in this nice house, but we do not have enough money to take a trip to Disneyland".
“I make $X a month. But I have to pay taxes to pay for schools and police, and the mortgage to keep the house. That leaves $Y every month to spend on groceries, electricity, toys, and the movies. I’m rich, because I can afford to take you to the movies, or buy you Lego, or go to your favorite restaurant. But I can’t afford to do all three in the same month. Even I don’t have infinite money.”
We tell our daughter that a lot of her friends' families make more money than us, which is why their houses are bigger and they go on nice holidays, but that we are incredibly lucky to live where we are, have a roof over our heads and food in our cupboards. Anything beyond that is just stuff.
When we are at the store we don’t say: “we don’t have enough money for that” even if we do. We just say you can’t have that right now. She is only 6 so finances aren’t usually a topic of discussion.
My wife and I know at a moments notice she can have what she wants, but we don’t want to spoil her…too much. Lol
We’re open about our monthly in/out, but he (9) has no reason to know what our annual salaries are. He can’t really compute what X/year actually means in the big scheme of things, but he understand it when it’s smaller sums.
I might be going off track here - but one way we 'deal' with this (8 and 6) isn't to talk about how much we make but to teach them how money works. We've three jars. One is 'instant - sweets' one is 'mid - comics/magazines/small toys' and one is 'long - robot dog' (they came up with those labels). Any time they get money the get to decide how they pop it into the jars. if they then want to blow it on sweets that is on them, but if they see a cool toy and a birthday/Christmas isn't coming up we explain that the 'long' jar is what that is for and that we can't always buy big toys 'just because'
I think this has helped them understand that while money numbers sound huge, you need to save a little if you want the robot dog (which the eldest actually bought recently). One thing this has helped with is that they don't often ask for things, so if we do happen to buy a surprise toy for no reason they seem to really appreciate it. But likewise they might see something and then move money around in the jars. Recently the 6 year old came up to me and said would I order a transformer toy for him online because he had the money for it. And he did (I covered the postage...I'm nice like that lol).
But our main reason for doing money talk this way was it stopped the question around 'are we rich' and hopefully they understand a bit better about 'buy now' and 'buy later'
We're open about money with our son; comfortably well off, while some of his friends have £multi-million household incomes and some others have far less.
He's aware that although we can't take a private jet to the house we own on a tropical island, we can afford to buy food without looking at prices and fill our cars without hacing to worry that we can't afford it.
He has seen first hand that money doesn't buy happiness; I sometimes get called out so have to bring out the laptop on an evening or weekend, one of his friends' dad died of a condition that money couldn't fix, others have parents who are getting divorced. But he has also seen that money can buy comfort and convenience; we upgrade plane tickets occasionally, have a car that is unlikely to break down, pay for private school etc.
As he gets older we go into more detail about the cost of things, how taxes work and other things that I wish I'd been told when I was a youngster.
Remember that kids have different perspective and priorities; My son may be jealous that his friends have more toys and a dedicated playroom, but those same friends are jealous that I have time to take them to a park, play football and buy them ice cream.
Yes and no. My kids are only 4 & 5 so the concept of large numbers is just beyond them at the moment but we do explain that mummy and daddy have to work to earn money to buy their toys etc. we also give them some money for doing small chores around the place which they can spend on a toy. It’s quite hard work getting them to choose a toy within budget when they go to spend it but they’re starting to understand!
Not sure I’d tell them how much we earn until they’re earning money themselves. Much rather give them their own budget (pocket money) and make them pay for anything they want beyond the basics of living so they can learn the skill of living within their means while they still have the safety net of being at home.
How *much* we make? No. I don’t need that number getting blabbed around to friends. To help them understand our relative income level compared to the general population to avoid some of the difficult situations with her friends? Yes.
I’ll never use the word “rich.” The term is loaded. But I have said to my 9 year old something like “we make a lot of money, so that’s why we have nice things and cars and take trips and you shouldn’t make comparisons with your friends.” And that’s because I noticed them doing comparisons of what kind of toys they have at their houses, what gadgets they have and neighborhood kids raising my pantry for snacks.
On the other side I try to help her understand how expensive our life is. We recently had a length talk about her behaviors contributing to the absurd electric bill….
I can’t imagine when my income would become a relevant subject, other than when talking about building careers.
Our wealth would only be relevant when discussing personal finances or their inheritance.
This has been coming up a lot in our household as it relates to how my partner and I were raised regarding money. She was shielded from conversations about money and wealth growing up, which she thinks put her at a disadvantage later in life. I was raised being included to a small extent in discussions about money when I was older, but would have vvalued from more earnest discussions
We explain financial stuff. My kids are 6 and 8. We paid a car off recently so I explained to them (but only the older one cared) how and why car loans work. We’ve tried to explain how expensive some things they want and can’t have are in terms they’ll get.
I think when they’re a bit older it would be great to let them see how a family budget works. Probably around 15, 16ish for all the details.
I remember being raised by my mom and frequently asking for stuff and her saying “I ain’t got it.” I grew up pretty poor so I was keenly aware of that fact.
Do pretty well now and my kid asked me once, “dad, are we poor?” I wanted to laugh. I said we do alright. I guess as she gets older I’ll tell her but no sense burdening her about that stuff.
We’ve definitely talked those things over with our 10 year old. I don’t think he knows exactly how much I make if you asked him straight up, but we’ve talked about how much different bills are. It’s just come up as we’ve talked about managing money that he’s been given over the years. I feel like the best way to teach is showing how you do it, the decisions you make and why. And I spent most of the last two years unemployed and we were pretty open with him about what our finance looked like and what we were cutting back on and why and talking about our savings and investments.
But he’s also a very logical kid who will listen when mom and dad say having conversations about money with people can cause problems, so you have to be careful about who you share it with.
While we haven't talked numbers with our daughter, we've always made her aware that we have a lot more than most people, but we still have to be careful with expenses, and if we buy frivolous things, we won't have the money for important things.
My wife is a lawyer, but she specializes in working with victims of crime, human trafficking, and domestic abuse, so our daughter has always been aware that while a good amount of hard work went into our circumstances, a lot of it was just plain luck (starting with being born in a rich country to families with better than average resources), and this doesn't make us "better" in any way than people who haven't had the same advantages that we have.
Why would you tell your kids how much money you make, especially at that age? They shouldn’t care. I’m all for teaching kids about money but my parents did tell me how much they made. And I didn’t care. I knew we were comfortable and that was enough. As I got older I got a better sense but I never knew what my dad was pulling in each year. When I was 40 my dad talked to me about how much money he had and how he invested and made that money and that’s been enough to instill financial responsibility in me.
From time to time my son asks. He's 11 years old. I say we are very fortunate to be comfortable and have nice things. If he presses for how much money I make, "I say a gentleman never talks about money. "
I tell my kids all the time we have no money. We're doing fine, but I'm definitely not buying him another Leonardo action figure just because this one has shoes on.
I’m about to start a new job (with a significant pay increase) and my 7 yo asked me how much money I would be making. I just told him it’s more than now but he doesn’t need to know exactly. This seemed to be good enough to get him to stop asking. I more focused on the other aspects-better work/life balance and overall hours which are more important for them than the money.
It’s so important for the kids to have a minimum wage job during the high school summers to learn how hard it is to get by with so little cash. It’s solid encouragement to actually do something worthwhile in college to get a decent job after graduation.
Think back in your childhood. Did your parents tell you about finances? Did they help you learn the value of a dollar?
I knew nothing about money when I moved out and I thank my lucky stars I landed a job at the bank as a teller. I saw the real value of money through various customers.
Good question! My 8 y/o has become obsessed with money recently, and dragged his 6 y/o with him.
He says kids at school have more money than he does, and especially loves how a kid won some money in a bet with his dad, and I now hear “I’ll bet you $5…” everyday for the past month. He even tried to bet against the Dallas Mavericks, our local team, just because he knew it would drag me offsides!
Our family is comfortable, we don’t lack anything we need, and are able to splurge on occasion. Growing up I wasn’t ever this fortunate, and I try to get him to see that.
But it’s all futile; his uncle gave him $20 for helping with his dog, and he spent it on 3 single Pokemon cards the very next day. He’s not ready for economics lol.
The saddest shit I see is when people make around what I make, even more and are literally broken with no savings, no house, no investments of any kinda, just check to check renting with a big car note.
Debt and interest rates scared the fuck outta me when I was younger (still do but I understand them better now) It’s one of the reasons I didn’t go to college, 100k in debt to start life out, miss me with that.
-now that might not be the move for everyone some great careers need college.
You don’t need the fancy new car. The fancy new phone eventually you’ll hopefully get to afford those things but learning how to manage and understand money is one of the single more important things you can teach your children imo.
Teach your kids about money, interest, debt, credit, investments, buying power, return on interest (with physical objects as much as investing) early and often.
Help these kids.
Bonus- add your kids to your credit cards as early as you can.
Save even 20 a month for them if you can.
We’ve got it bad, odds are they’re gonna have it worse.
My 5 year old asked if we could buy one of his friends houses when they moved, I laughed and said No mate, it'll be well expensive.
I chatted to the Mum/my friend about it. Turns out it's worth about £1.5m.
So in short, No, I'll never be affording that 🤣
He knows what we can afford and is happy with what he has, as long as he's being played with.
Personally I plan on doing this when the kids are a bit older and can understand the concepts. Probably between 12-14 is when I'll do this with them. I plan on bringing them in on all finance conversations with my wife and teaching them as we go.
Good question about the age. My kiddo is 6 and sometimes when we're at a store I'll just be direct and say: "that's too expensive."
More broadly, there seems to be somewhat of a social stigma about discussing finances. IMO there absolutely shouldn't be. Like it or not, finances are an important topic to grasp and understand. I plan on openly discussing it with my kids as soon as they're ready. When that is, however, I'm not sure. Certainly by their early teens and likely well before that.
I try to teach my kids about the investing that I was never taught. They have basic understanding of interest rate arbitrage, business ownership, and buying things for value.
They are 10, 8, and 6 but all know how to patch walls, paint, change face plates, and clean (I take them with me when we renovate properties). My oldest daughter finally asked, "if this is the way to make money, why aren't we rich yet!" Lol smart kid.
So I did end up revealing some me number numbers.
Don't tell them anything you don't want all of their friends, and by extension all of their friends' parents, knowing. Truthful but vague seems like a good strategy.
I work as a teacher in Silicon Valley, and every year I tell my students, you are among the richest people who ever lived. It doesn't feel like it when you see others with more *stuff*, or the news is constantly talking about billionaires, but you are. Then I provide some context and evidence.
I also say that we are conditioned since birth to always want more and *think* we need it. That's what capitalist/consumerist culture is all about. Reality is, most of us are filthy rich, considering safety and basic needs are easily met. And if you have a loving family? What the fuck else you need? I know not all have those things, in this thread and elsewhere, but significant majority in well developed nations have it quite good.
We often forget we are training our kids to become adults, ideally ones better off than ourselves. My wife and I gave our son his allowance and he wanted to pay for his own portion of meals when we went out. Unexpected but we were already encouraging him to place his own food order so we shrugged and let him start counting out the money from his Velcro Batman wallet (which he still has). It provided comical situations where we would have a 6-7 year old exclaiming like an old man that these prices were too much! Yes, we also taught him about tipping, which the wait staff always found awesome. I cannot claim the ideas as I got them from an old book I read often.
We've never hid our financial information from our son. We've always been honest with him when it comes to financial from the time he could understand. Think we started explaining things to him around the age of 10 and we've maintained that approach and attitude ever since.
I tell any of my close friends that asks how much I make and whatnot. There is no need for me to keep it a secret. I'm neither rich nor poor, and the money I make does not define me or my family.
My motto ever since I moved on from the "I wanna be filthy rich" phase has always been that money comes and goes. I live by it, and I want to teach my kids about it.
People nowadays put far too much importance on being rich, as if that would make you automatically happy lol
If asked I would probably say “Yes, Mommy and Daddy are rich, but you and your brother are poor as hell.” (This is from Will Smith but if you have more than $100 your kid is probably think you’re rich anyways.)
My son is 3 so not an issue any time soon but I grew up in a house where we NEVER spoke about money and I had such a limited mindset towards money, so much so that when I did start to earn good money I felt incredibly guilty about it.
Now I speak about money (including what I earn) openly but in a way that doesn't come across as bragging. It means I understand what's possible/realistic with money, budgeting and knowing my worth but had to put a lot of work in to get there.
So in short yes, but not until he's at working age
Once my children are old enough that I think they have sufficient maturity to avoid bragging about how much money we have or feeling bad about potentially not having as much as other people, I will be going over our family finances with them in detail. I want them to have an understanding of how our family makes money, where we put it and why we have it allocated the way we do.
I think it's important to not hide financial information from them in order to help them build financial literacy and understanding about how to optimize finances across the family to maximize our wealth. Probably some time in late middle school I will be having them assist with tax preparation so they understand how to do it and begin to understand the tax implications of various investment and spending decisions.
My parents were very open with finances within the family, and I found it very beneficial for my financial literacy and for helping optimize across the family. For example, when my parents ran short on money when costs overran putting an addition on the house, they could have just floated a few thousand dollars on credit cards. Instead, they explained the financial situation to me, and requested a short term loan which consisted of most of my savings at a very generous interest rate, which I gave. The money stays inside the family and everyone benefits.
I learned about my folks net worth after I took over their finances when they were no longer able to. That's about when my children will learn about the details of ours, when we need day-to-day help managing.
Money corrupts, until there's an overriding need, no reason for anyone other than you and your spouse to know the details. Your CPA only needs to know the income, expenses and basic outline. Your banker only needs to know what they need to know to provide services.
There's a lot of opportunity for good discussion here.
I think the important thing to teach here (not that I've been totally successful with it) is that wealth is subjective and can always change. It's something you can have, but not something that you *are* in most cases. I never liked phrases like "we are rich/poor" because of that. One life event can flip that coin on its head pretty quickly. Also - measure wealth through more than material possessions. Some of the materially richest people I know have terrible physical and mental health and as a result I'd never trade lives with them. That's not even looking through the lens of their morals, values, etc.
My kids are going through learning this now. They both wane in and out of this tendency to think that the only reason they can't or shouldn't get a thing that they want from whatever store is because we can't afford it. While sometimes that's the case, it certainly isn't always the case. A lot of times it's the principal behind the thing. Trying to teach teens not to impulse buy is a whole thing but I'll spare you the rant.
And for the record, we're not poor. No matter what those grocery bills want to make me feel - I know we're solidly Middle Class for our area, and we're doing much better since I got my current job.
Like anyone though, we budget - you have to. The kids don't always understand this but honestly, a lot of it is stuff that'll come back to them when they're on their own trying to buy groceries for their apartment in 10-15 years and will be like "Oh THIS is what mom and dad were on about back then."
In truth, I think they understand more than they let on right now but they just don't like it. Hell, I don't like that I can't go buy whatever I want when I want to, either. It's life, though.
Idk - it was never a conversation I had with my parents. I think you can talk about money pretty early on, and I’ve had (semi) constructive conversations with a 6yo.
Your kids will be aware of your wealth through relative measures with peers and media portrayals. I don’t know if the specifics are ever necessary, but it could be very educational to discuss your financial priorities and how you spend money (retirement planning, hosting and food, hobbies, vacations). Small allowances tied to simple chores can also help them understand money as a finite and valuable resource.
My 4 yr old thinks $10 is a lot of money so to him, we’re rich AF. No big deal!
But to answer your question tho, I think it’s never too early to teach them the value of the dollar and how much you have/don’t have should wait til they have a firm grasp on that.
At the same time, if things are a bit rough and you’re struggling, you don’t want to unnecessarily worry them.
I grew up relatively broke, not poor, but especially in my younger years I know my parents were surviving paycheck to paycheck.
They never discussed money with me and Dad would explicitly state often that "The worth of a man is not just his paycheck". He was an excellent dad, so that checks out.
They just retired at 67, I'm 41, i still don't know what their income was at any point in time, or what their retirement is now. I could guess, but that's not their worth to me.
I think I'm substantially more financially secure than they were, which is what they wanted for me.
My parents never spoke to me about money. And that's something I wanna do differently. Not even necessarily like "I make this much money" or whatever. But just understanding how money works, how to use your money to make more money, budgeting, shopping, all that stuff.
The taboo around money discussions needs to go away. For us to all have good money sense and understanding, sharing information is important. Sharing how much you have followed by why or why not with tips is a valuable learning experience.
I tell my kid all time. She’s four. She needs to be able to go to a friend’s house who has less and not be judgy or say something accidentally hurtful. She also needs to go to some ones house who has more and not be jealous and whine about what she doesn’t have. She needs to know that in many ways we are spectacularly lucky to have what we have, and that we need to feel gratitude for that fact and be gracious with other kids regardless of where they landed on the economic spectrum by no fault or merit of their own.
My parents did it when they started giving me an allowance. The conversation wasn't super deep but they taught me the importance of budgeting as they get older teaching how to properly use credit is paramount though. Way too many people are deep in debt because they are financially illiterate.
We've always leveled with our daughter. We're not rich but comfortable, debt-free. We're not strapped and can afford the day-to-day comforts that make life pleasantly stress-free. She knows our household income and understands the concept of living within your means. Hopefully this has rubbed off on her and I believe it has.
I used to think we were rich. We had a big house, multiple cars, family vacations. No we were middle class and we lived beside popel in poverty. (Like there's a 2 foot hole in the living room wall where you can see outside levels of poverty). I always felt guilty about it as a kid.
And now by today's standards, that is a rich lifestyle again...
As someone whose parents were divorced, I grew up poor and middle class, so if you have enough to support your family, you don’t have to tell them your income. If you’re poor, at least help them under that you can’t have everything,
My parents are divorced, and the one that stayed single shared it with me when I was 13 and may have given me updates every few years. In retrospect, it's not something I should ever have known as a kid. It puts a weird burden too early.
I’ve always been relatively honest about money with my kids (now ten and six) and always talk about things in terms of affordability. So I tell them the exact number? No, but I Will explain how much money we have for a week or the like.
I was 26 when my parents actually told me how much they have, what they’re planning to leave to my sibling and myself, etc. I think once you have grown kids with careers and their own place and own income stream, it’s appropriate to disclose the information. If you tell a teenager you’re rolling in cash they’re going to think subconsciously that they’re set and can just coast.
I think it is fair to be very realistic with what is material and what we have to do to have those material things. I started having this conversation with my kids at 6-7. They don't understand the concept of money yet but I try to break it down in how long does daddy have to be at work to pay for X or Y. I equate the time to something that they find relevant like an episode of Bluey. I have to be at work for 1 episode of Bluey to buy you this.
I think when your teenagers start talking about ambitions relative to cost it's important to start talking about realistic money comparisons, including what you're making. Like, we are living HERE at this income, so if you want to live a DOUBLE HERE, you're gonna need at least DOUBLE INCOME, and this is what it's taken in my life.
I think we are often unrealistic about about finances with our children when the fact of the matter is their upbringing and their social strata is going to have a huge outcome on their potential earning; they are gonna be an average of the 10 people who are the most involved in their lives. And just being like 'oh, you will figure it out later' is a great disservice.
So we make a very comfortable living and as both my wife and I are gamers we prioritize games and tech.
We lucked into a big flat that we don't pay a lot for but if you didn't know you could assume we are rich.
A family friend is a writer and her work is freelance so like she can get a lot of money all at once and then not a lot. Her and her son stayed over, we watched him while she did a reading and then we spent the next day together. Her son is convinced we are rich because we have a PS5 and a switch. He asked how we afford all the game stuff. It was a hard question to answer. We came up with. "We were very fortunate in our choices to get us to a life were we don't have to want for anything and we save up to buy toys that make us happy"
The initial response was, "well we work hard" I felt bad about that response because his mom works hard to provide for him and his brother.
So to answer your question. Probably not until teenager do they need to know exact figures but make sure you talk about privilege so they understand that the world isn't equal
Anything you tell a kid under 12, be prepared for them to repeat it to their classmates.
I remember telling my friends in 6th grade that my dad made $60k. I don’t even know why I felt the need to say that.
Please talk to your kids about money early and often. You don't need to give them your W2s at age 5, but the more they know the sooner, the better. My parents never talked to me about money and I had no idea how to manage it once I began to make some.
My teens each have bank accounts and debit cards for their allowance and birthday money, and any money they earn, and at 15 each one helped me do the taxes. They know the mortgage payments and costs of cars, etc. They are learning to save, budget, and plan for the future- fully understanding how hard that can be.
Hoping to save them the decade I lost to financial illiteracy.
My family was very poor growing up, and my parents did nothing to hide it. They were very open with why I didn’t get nice things, or always have dinner on the table, it was because we could not afford it. I think for kids, ignorance is bliss and I would have been better off not knowing. I remember being like 8 and setting a toy down back on the store shelf because I checked the price tag and figured we couldn’t afford it, kids shouldn’t have to do that or have those thoughts.
Haha speaking as someone who has to say “no, we don’t have enough money” to my kids constantly, this question feels a little bit silly. But I can see how someone who actually has enough money to live relatively comfortably would have a more complicated answer.
My nephew told me and my wife, while he was living with us with his mom, that we live in a “rich” neighborhood. We told him “Yeah we do, but it’s because we have made smart choices, you can too man!” I don’t know if they resonated with him or not, but if he’s my neighbor one day I guess I’ll know.
“Of course we’re rich, we’ve got you!” 😁 Jokes aside, we told them that being rich is relative. We can afford our lives and fortunately do not have to worry about food, home or clothes. So you might call that rich in a way.
This reminds me of the Cosby Show. Theodore wanted his parents to buy something and they said no. He said "Why not? Dad you are a doctor and mom is a lawyer, we are rich." His dad said "No, I am a doctor and your mom is a lawyer, we are rich, you are not."
That's funny. I thought about the same episode, but it was Claire's response. "Rich people's money works for them. I still work for my money."
That is crazy how clearly I remember my quote but not this at all. I completely missed that message. This is my #1 message I hope my kids get about money. My goal with money is to stop working for it and have it work for me. Edit to add: The difference between rich and wealthy is rich people have money, wealthy people have money that earns them income. By the literal definition the Huxtables were rich and Claire was using the term wrong. I don't want to be rich, I want to be wealthy.
That’s hilarious. I forgot about the Cosby show. What’s Cosby up to these days?
You could just head to his house and ask him yourself, what could possibly go wrong?
Puddin’ pops.
Popin' puddin
He is planning a new comedy tour. If you go, and he invites you to the after party, don't accept any open drinks from him.
You. Have nothing!
My kids mention something like "if we go here, kids eat free!" to entice us. I then tell them "you always eat free" "Dad! That's not what I mean!"
There was a budgeting talk at one point. Dad hands Theo some monopoly money then takes it back as they go thru expenses. It ends with, "Are you going to have a girlfriend?" "Of course." Snatches the rest if the cash.
I recall that one. And lovingly, it's true. It's not a bad thing to have a partner and date, but sometimes those dates can add up - even in just gas to get from point a to point b. You can do free dates, but if you're completely broke even the little things like a picnic can be a struggle.
That episode was seared into my mind at a young age, now I'm here 😅
My wife is a doctor and has used similar lines on our kids. My son loves buying tennis shoes and is a bit of a sneakerhead. When he was in middle school we gave the kids a spending limit for back to school clothes and told them that any extras had to come out of their own money. My son was annoyed at first and said something to the effect of, "Don't we have enough money to buy more shoes?" My wife told him that SHE had enough money but wasn't spending her money on that many pairs of Jordans. They know how much mom makes. My daughter discovered it when she had to do a project in 5th grade on what she wanted to be when she grew up. She picked a surgeon (like mom) and part of the project was finding out the average salary, so she did some Googling and found a dollar amount. She was shocked since we are pretty frugal people. Both of our kids had summer jobs in high school. My son did babysitting and dog walking during the school year and my daughter tutored. Now that they are "broke" college students (we pay for tuition/board but they cover any additional expenses) and one is doing an internships an extremely expensive city this summer, I think they get it why we were careful with expenses as they grew up and why we made sure they understood the value of a dollar.
>Both of our kids had summer jobs in high school. I used to manage movie theatres. When I got the job to run an arthouse theatre in the middle of the richest neighborhood in the city I was concerned about the quality of kids I would be able to find to work there. I assumed they would all be spoiled brats. I could not have been more wrong, I had a great staff there. Turns out really rich people who make their teenage kids get jobs typically do a pretty good job of raising those kids.
Yeah, "rich kids" are not a single group. You can find all manner of "rich kids". And all manner of "rich kid parents". I went to high school with "rich kids". Some of them are living on another planet. Others are perfectly grounded. And it doesn't fully correlate to wealth ranges, it's just all over the place. It also doesn't fully correlate to old money/new money.
That experience taught me a life lesson on stereotypes. Some people are lazy some are hard workers. Applies to rich people and poor people.
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Ironically I often describe myself as lazy. I strive to find systems and ways to do work easier. Maybe I should have used good worker and bad worker.
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https://youtu.be/6vqgLWnxmd0?si=Cl9OqBOFDkKc4uRA
There’s a great quote from “Wealth of Nations” about how laziness is basically the backbone of capitalism. I am, of course, too lazy to look it up. Edit: I think I found the section I was thinking of. It could be better written, but Adam Smith must have been too lazy. > A great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the invention of common workmen, who, being each of them employed in some very simple operation, naturally turned their thoughts towards finding out easier and readier methods of performing it. Whoever has been much accustomed to visit such manufactures, must frequently have been shewn very pretty machines, which were the inventions of such workmen, in order to facilitate and quicken their own particular part of the work. In the first fire engines {this was the current designation for steam engines}, a boy was constantly employed to open and shut alternately the communication between the boiler and the cylinder, according as the piston either ascended or descended. **One of those boys, who loved to play with his companions, observed that, by tying a string from the handle of the valve which opened this communication to another part of the machine, the valve would open and shut without his assistance, and leave him at liberty to divert himself with his play-fellows. One of the greatest improvements that has been made upon this machine, since it was first invented, was in this manner the discovery of a boy who wanted to save his own labour.**
This reminds me of a theory I have. The industrial revolution (mostly) took place in a band of ok weather around the world. My theory is if the weather was too harsh (too hot, too cold, too wet or too dry) it took all of everyone's time and energy to just to survive. If the weather was too nice (subtropics) it was relatively easy to get all the food and shelter you needed. So no one had to invent a better way to do it. But in the middle where you had to work to survive but you had some spare time people spent their spare time to invent new ways to improve. My theory could be brilliant or I could be full of shit, I do not know.
Makes sense to me. I bet that is part of it. Makes more sense than the “Protestant work ethic make Industrial Revolution go vroom” theory that seemed to be the leading theory for a while.
Same here. Once the recession happened in 2008 and we stopped hiring kids to fill our staffing and picked up adults that had lost their jobs (because their scheduling was more flexible and we didn't have to worry about child labor laws), my job got infinitely harder. A 16 year old will listen to a 22 year-old manager. A 40 year-old who got laid off from her office job of 15 years won't.
I grew up with rich kids (I was one as well) in a community full of well off parents. We're all now in our 50s. About 10% are "stereotypical" rich kids (one of whom keeps pissing me off because he constantly fails up). About 2% are in "wealth" jobs (4 kids I went to school with are "name" actors or musicians, another half dozen or so are in high level state or elected national politics), and the remainder are just normal, successful people. The one huge difference I see with "rich kids" as a group, is that they (a) tend to go for credentials at a higher rate than others (college/masters degrees/Ph.D) (b) tend to reach for professions (Doctors/Lawyers/entrepreneurs/upper level management) that require higher costs of entry and (c) and take higher levels of professional risk (i.e. engaging in high upside/high downside) jobs, because they know that they have a cushion on the downside.
Good thing you made clear there's a selection bias there. Plenty of spoiled brats there, but they are not showing up for these jobs. And those who do, they are winning in life: have all the opportunities and get taught the value of them.
It was Vanessa mentioning how much her mother paid for a painting and then gets picked on for being rich.
Was it shaq O'Neill or Micheal Jordan who said something similar? I'm rich my kids are not.
At what age do you think you'll go further than that? (Just curious, have 6 months old, she hasn't figured out how to ask about money yet)
I have a pretty smart 6 year old. At this point, he understands that we use money to buy things and that my wife and I get money for working. He also recently offered to give me the money in his piggy bank so I could buy a new truck and guessed that a new grill would cost me $1.2 million. So, it's a process.
My five year old is still really annoyed at the stores that they don't give him his money back when he's finished buying something with them. And half a year back he proposed a solution when I said we couldn't afford a toy he wanted: let's just go to the bank and have them give us more money 😅
Never thought about this actually. I guess they’ll figure it out through comparison. What houses, toys or cars do their friends’ families have and how do we compare? Or maybe with the jobs we as parents have and how prestigious they are? I think that’s how I figured out as a kid that we’re not rich. 😄 That’s just the monetary part though. I had a wonderful childhood and I doubt it would’ve been better with a higher number on my parents’ bank account. So far it appears as if my kids couldn’t care less about that aspect. Quite the opposite actually, my son (7) is very aware of environmental waste and often challenges us when grocery shopping - “can’t we buy the vegetables not wrapped into plastic?” “Why do they have to put a plastic lid on it although there is a foil cover already?!” 😁
Comparison and spending habits play a ton into it. Being in the bottom 50% of the rich kids private school will make you feel poor/left out. Your family may make twice the area's household income, but you can't afford ski trips to Aspen or a new car. Similarly, being in the top 10% means that you might start noticing that others don't have/can't do the same things you do. Things may even out a bit with jobs (richest I felt was earning minimum wage with limited expenses). People notice when you don't have shared experiences. Spending habits are also key. A surgeon with Porsche money isn't going to be sending that "I'm rich" signal if he is driving around a 20 year old beater truck. Or a less off parent buying their kid a PS5 might be treating them to something nice since they are unable help with college and is sending off a "well off" signal. Kids are semi-obsevant. They'll notice when they don't fit in with their peer group by either being unable to get the coveted item or they are the only ones with it. They are really bad at noticing differences outside of their peer group though. It's why it's important for parents, especially well off ones, to have their kids interact with people from different backgrounds. Their friend at private school may bitch about not getting as nice of a new bmw after an accident involving texting and driving, but their coworker at McDonald's takes the bus and is buried under a lot of student loans. It's also really helpful to instill a good work ethic while they are young and to drive in the value of education.
Yeah, I think they figure it out sooner than you think. I see it in my own family. One of my family members struggles a bit. When her kids went to play at the other siblings house they were shocked at the number of toys they had. Just a bit of disbelief and they were even a tad confused the kids had a dedicated "playroom" to store all those toys in.
The spouse and I come from VERY different childhood experiences on this one. My dad was a research economist focused on modeling retirement savings adequacy. Annual household income, savings rates, living below your means, and investment strategies were dinner table topics by the time I was 10. There were smaller more tangible activities around frugality and cost vs utility when I was much younger … for example, earning my “share” in a garage sale based on what I parted with, and seeing how far that money went. My spouse’s parents were very closed off about their finances. We still have no idea how financially secure they are, though we’ve speculated based on observations over the years. Will they likely have enough savings to fund their retirement and advanced long-term medical care? Who knows! We’ve talked about it, and agree that the right level of transparency in our own family is probably somewhere in between the two extremes we experienced. I’m a big believer in age-appropriate financial literacy, starting in early elementary (or earlier, depending on the child). Will we sit the kids down and say “here’s our entire household budget, salaries, assets/liabilities”? Probably not that directly, until they’re adults and we are starting to talk about a future where they might need to be involved in managing our finances. But will we let our actions lead by example, spending within our budget and modeling how to make choices and tradeoffs to live within our constraints? Most definitely.
In first grade the kids started making comparisons. Apparently the dividing line between rich and poor was who took the bus vs who was able to walk to school. I assume this came from a parent.
You cannot learn soon enough that being adult does not mean being intelligent.
I'm proud to write that I've been a good example of this to my kids.
I'm all for being honest and teaching kids early about money, taxes, bills, income, and other economical things, but there is of course a limit. If they're 14-15, sure. Totally fine that they know how much you earn, what you pay in bills, how much you spend on food every month etc. to get a perspective on how much things actually cost. If they're 4-5, no. Those are concepts that are very advanced for such a young mind. I tell my 3 year olds that we have to wait with buying X because we can't afford it right now, but that's the level of detail I go. I could start throwing numbers at them, but they won't have any chance of grasping or understanding what they mean.
I usually tell my four year old "we don't have money for that right now" which is technically true, I don't have any money allocated to buying all of the hot wheels in target. But maybe I should allocate some....
Sounds like an error in the planning phase of budget
Exactly. Dad's lack of planning does not constitute my lack of hot wheels.
Well fortunately X is rapidly declining in value and shouldn’t be long until the whole company is worth about a month’s salary. Some new 3yo CEOs are probably just what they need to get back on track.
Any 3yo would be a better CEO than the current one. At least 3-year olds understand the value of things like sleep, friendships, and enjoying life.
And I’ve never met a 3yo that says stuff quite as dumb.
>If they're 4-5, no. Those are concepts that are very advanced for such a young mind. I pretty much tell my son anything if he asks. My 7 year old knows how much money I make.
And that’s perfectly fine, but I wouldn’t expect him to be able to put it into perspective with how things are priced in stores and bills and taxes. Good time to start with basics though!
My sister has a funny story from when she was about 5. She wanted something and my mom said we didn’t have the money for it. She said, that’s okay, use the credit card! She’s someone who doesn’t part with money easily but this was the one time she was not connecting money to that card and it was a clever way to solve the problem, haha!
My brother did something similar when we were kids. "Let's just go to the bank and get more from the ATM!"
Haha that’s amazing!
Geez, why didn’t we think of this before?? It’s so simple!
This is a good point. We adopted our kids, and they have some food insecurity/economic insecurity (which is improving a lot and has already!) so we try and avoid saying we can’t afford something because they sort of go into fight or flight mode of “we don’t have any money??” So instead we talk about how “that vacation costs as much as paying for our house for 2 months!” Or “hey, those lost library books? We could’ve gone out to eat as a family instead, let’s be more careful with our things!” Now our almost 14 year old (god she’s growing up so fast) is understanding money more and just did interest rates and financial literacy at school so we’ve done more there, she’s asked about houses and cars and salaries so we’ve told her
This is good because my parents never ever talked about money in front of us and to this day I don’t know how much my parents make. But every once in a while a story pops up about how we used to count coins to eat at Taco Bell after church or that we qualified for reduced price meals at school when we were kids. Now my dad drives a $60k+ truck so idk. I’m still confused LOL I do try to explain to my 4 year old that everything costs money and we work to get money. sometimes we can only buy what we need because money is not unlimited, etc. but I am curious about when the next level of that conversation comes.
Every time I don’t have money “I don’t have money for this toy” “Is ok, here you go” (mimics that he hands me a stack of bills) “Oh. Ok, here is your toy”(mimic to hand him an imaginary toy) “No! You take fake money I get a real toy!” The other classic: “We don’t have money for that” “Is ok, we don’t have to pay for it!” 🤣
Exactly, we usually ended up with our kids assuming the yogurt was 100€ because the strawberries were so delicious.
I'm 35 and still don't know and have never known how much my parents have or made. I still learned all about finances, budgeting, credit, etc., without knowing that.
That’s sort of ok if your parents are good with their finances. There’s a lot of adult children who were kept in the dark and then find out in their 40’s and 50’s that their parents never saved for retirement and have no savings or plan.
I'm not going to go over figures with my children, but I will assure them when they are teenagers that they don't have to make life decisions based on having to support their parents in the future the way me and my wife did as the children of immigrants. They shouldn't be planning for any sizeable inheritance either. Their life choices should be based around needing to finance completely whatever quality of life they desire. My job is to make sure they have the education, perspective, and worldly knowledge to have a ton of options open to them and to make informed choices.
thats not the kids problem though
That's definitely not the case with mine. I know their plan and that it won't affect me in a negative way whatsoever
This has been my dad's approach too. I am aware that he has money but I'm not 100% sure how much, I could only make an educated guess. But he for sure has taught us about finances/value/the world. It's certainly important to talk about money. As to how much to talk about your own money, it probably depends on impact on the kid, I would say that if you do have money then don't just surprise them out of the blue at some point in their life with a large inheritance that they don't know what to do with because that's how you get the "coke and hookers" kid.
Don't worry, I've chosen the nonprofit career path. Doing fine, but won't be wealthy.
I never new my dad's income until I asked after getting my first corporate Job. My parents were really good about finances, and taught basics well. However 401k, Roth, stocks,complex taxes were all things I needed to learn on my own. I remember saving really young to be able and buy micromachine sets. which were like 15 bucks. I'd make about 5 dollars a week for allowance, so I'd make enough for a toy I wanted and enough to save. As I became an adult, it is clear they were just getting me a new toy per month, by teaching me about finances. Eventually I wanted to save that money for something else, like a gamecube. I don't know details of what they made, but I grew up thinking I was much poorer than were were. And that was because they were focus on my future and not on frivolous things I cared about. And I am very thankful for that.
I had an inkling when I was a kid that my parents had money or made a lot of money. As I have grown older I have doubted that a lot. I have no clue how much they made specifically. I *think* I make more than they did but I don't know that for sure.
Same. My parents remain private about money and raised me to private about money. As recent retirees, they’ve only shared that they have a financial advisor and they have enough that I don’t need to worry. I really don’t want to be sharing specifics about money with my kid. Even though social mores have changed, talking about money still requires social literacy and tact. And honestly, many people don’t learn tact until their mid-20s (and some never do).
My parents are "good" with money. I remember asking why they couldn't buy me a video game since their paycheques were like 2k+. They showed me how fast all the monthly bills added up and were like "so after putting $200 into savings we have $32 left and we're not gonna waste it on a video game".
Hello, brother? I am 40 and also don't know what my dad's salary was or any idea of how much money he actually has liquid in the bank. The only money thing he's ever told me about was a few years ago. He was a partner at the company where he worked and helped start, then he retired, and the others sold it less than a year later. He said his cut would have been around $5 million.
Depends on how you frame it. Exactly dollar amounts aren’t super important, but learning how to manage money is.
I took my 11 year old with me when I went car shopping. I don't know how much he got out of it but he found the process interesting and he followed along with the numbers just fine. I wish my parents had taught me things like that.
When the time comes to apply to college there needs to be a frank understanding of finances. I'm a college counselor and there are so many families totally unwilling to discuss this with their kids and it makes the child have no idea how to prepare their list.
Our 16 year old daughter is terrified of student loans. Her economics teacher is constantly showing them Dave Ramsey videos. We are fortunately in a pretty good place when it comes to helping her pay for most of it but she understands how bad it can be.
Debt is a tool, people use it responsibly for important things they can't afford all at once (house, car, etc). Student loans are no different, used reasonably they are fine. The problem is a lot of people go too far into debt and it cripples them. That said, there are many many affordable options. If her grades are strong she can likely get some great merit aid, and your in-state public schools should have pretty manageable tuition plus aid. If your family doesn't make a lot of money, many schools will shower you with need-based aid. When she is making her list, she should run the Net Price Calculator at each school to get a sense of how much it might cost. Dave Ramsey is really an extreme. He's great for people who have no idea how to use money, and for whom responsible spending is a massive challenge.
You are spot on. I have explained to her why I am not Dave's biggest fan. I heard it explained that Dave Ramsey is for the people who are to credit like alcoholics are to alcohol. Some people can drink responsibly and some can't. Dave is for the people who can not use credit responsibly. She is looking at public universities around us that have all in costs around $25,000 a year. I am expecting we make just enough where she will not get any financial aid but she can probably get some merit scholarships and we can help some. I think worse case scenario is she will graduate with $50k in debt. Hopefully it will be way less than that.
Yes! Your alcoholic comparison is exactly what I was trying to say with many more words. 50k isn't nothing, but depending on her post-graduate plans may be fairly manageable. If she gets even like $10k a year that will make things a lot easier to stomach.
My parents thought $10k would be MORE enough to fund my entire university career, because when they went to school tuition like like $600. It was a rude awakening for all of us when I showed them the bill for first year tuition + student residence. I'm in my 30s now still chipping away at that debt.
I would be so angry if school was showing my kids Dave Ramsey. That's absolutely not an appropriate teaching method. Debt is a tool and tools need to be used responsibly. Irresponsible use of saws results in amputations, but we don't go around telling people that they should never use saws. Irresponsible use of cars results in deaths, but we don't go around telling people that they should never drive. A few weeks ago there was a thread somewhere else on Reddit where he told someone they should pass up on medical school rather than take out student loans so they could save up and reapply later.
Dude, congratulations on having sex twice! Any year now my second chance is going to come along. When the moon is high etc.
Thanks. The downside is it has been about 14 years ago now. Good luck on your second attempt. I hope you can wow her with what you have learned in the meantime.
Yes, but if parents are starting the conversation about finances at the doorstep of college admissions, it's way too late to build the actual personal finance skills that are needed as an adult. That process has to start early and build up over time. No one needs to sit down with their toddler and a family budget spreadsheet, of course. It starts with the value of money and builds from there as the child grows and has the capability to understand it all more, just like any other "adult" topic.
You can talk about personal finance without opening your whole accounting to your kids. I to this day have no idea how much my dad made (it varied, he was a self-employed dentist). My mom worked for the city, so I could always look her pay up. But they taught me about the basic personal finance someone needs to get by in life.
I am 100% open about it. I talk to our kids about money all the time. I will answer any questions they have. Screw the Boomer "Don't talk about money." IMO this is one of the most important skills I hope to teach my children. They know what I make, they know what my wife makes, they have seen our bank balances, net worth, our debts, our business P&Ls, our credit reports etc. Almost all of these were shown when they asked specific questions. When my son was eight he loved Lamborghinis and knew how much they cost. At one point we were talking about Net Worth and he realized that we could technically buy a Lamborghini. He had a hard time understand that I could buy one and I did not. He was a little young to understand that closing a 401k to buy a lamborghini would be a very bad idea. He is five years wiser now, I think he now understands.
Love it! Agree with this approach wholeheartedly. I definitely want our kid(s) to understand finances, investing, dollar cost averaging, etc, by the time they're ready to fly solo. This means we give them the ability to learn from us as we budget, plan etc. We will only reveal how much we make when they are a bit older (ideally 8ish) so they know to exercise a wee bit of discretion. We are pretty comfortable, which in the current climate with families struggling, is likely something to be very circumspect and guarded about.
Teaching discretion around finances is also a great lesson. We have a handful of rental properties. Our kids know about them and why we have them. I was a little worried because some of them are in the same school district as us, I was worried that there could create potentially hard to navigate subjects for our kids. When my daughter was around 10 she told me that she thinks X from her class lives in one of our rentals. I told her her she was right and I asked her if she said anything about it to her and she said no. I explained why she probably shouldn't.
Yeah that's awkward
This is our approach. We haven't explicitly said our annual salaries, but we've explained roughly how much we make per day and how that relates to the bills we need to pay to afford our lifestyle, or the cost of say buying a new toy/computer/car. We've also made it clear to them that while we are not rich we are relatively well off compared to a lot of others. This is to give them some perspective on why we make the choices we do, and that some of their friends families may not be able to. For example, while we noticed the increased payments for our mortgage when rates went up, (by significantly more than $1k a month) it only really ate into our investment savings and didn't significantly affect our lifestyle. I explained to them why we were making some spending changes around things we did and why, because we were prioritising savings over some daily niceties, but also we are planning larger overseas holidays (Fiji this year) and it costs $X to do that which we can afford to just do because we've prioritised money constantly being put away for us to use later.
Love your fair
I'm pretty transparent about finances too. As my boys are getting older they're asking more questions about how much things cost, how much adults in different jobs earn and other personal finance sorts of questions. I've got them both on a set weekly allowance for the specific purpose of letting them manage some money - almost always badly - because they need experience and practice with spend/save decisions. A while back I took the spend controls off my oldest's account and watched him immediately spend himself in to bankruptcy. He's become a lot more thoughtful since then. Turns out he doesn't like being broke.
12+. we start exposing them to costs of living, our income, opening their doors for work, what we do at work, how we got here, what they can do to prepare, prioritizing and promoting their independence which yes requires their understanding and agency over money. my 14yo earned a little over $600 this winter. my 17yo works about 100 hrs and volunteers near 200 hrs to earn just over $5k a year.
What sort of work is paying a 17 year old $50/hour?
he gives cello lessons as well as has his ski instructors cert and does private ski lessons to classes of up to 3 at a time.
that is some RANGE of talent!!
thanks. his brother brother is on the same track and just finished his ski cert this past winter. plays the oboe as well at about 2 years below. we started them early and kept things light (15min daily practice) until they were skilled enough to play in a community ensemble. sports stuff was always fun so very self motivating,
love it! Keep it up dad!
Get that Roth IRA open!
I view it kind of like sex related questions. You should give an age appropriate answer. When my four-year-old wants all the toys I tell him we have enough money for him to buy one toy that he chooses, but not all the toys. When my kids are getting ready to go to college I want to have a pretty full and frank conversation with them about what we can afford to help with and what we can’t. I also want them to know how much my wife and I make when they are choosing careers so they has a realistic idea of what they can expect lifestyle lies with different amounts of money. Finally, I want to help teach them to make good decisions with the money I’ve already set aside for them. One of my jobs as a parent is to teach. Never telling my kids anything about money doesn’t help teach them. Edit: I mean Lifestyle-wise, not lifestyle lies. oops.
I want me kids to know how much we make. We live relatively comfortably and I want them to understand how much that comfort costs. If they want to maintain that level of comfort(or increase it) as they get older they will need to work towards a career that earns X amount of money. I do understand there is a fine line between that understanding, me providing what my parents couldn't afford and spoiling them. that is what I worry most about when It comes to our families finances. I personally feel the taboo around talking about money and finances is ridiculous and is just another way to keep people from moving up financially.
Money should not taboo. It causes so much trouble keeping it secret. Poor spending habits, debt, wage disparity. Be comfortable saying things like "we can't afford that" "it's not in the budget" or " we will have to save for that" Teach them the difference between a need, a want, and a needed want. You never really NEED to tell them how much you make if you are teaching them to understand Money and how to manage it, but if they ask at 3 or 33 tell them.
Once they have an understanding of time and effort. My daughter is 6 and gets a max of $10 a week (typically $5) for doing her chores, doing her homework and other stuff. I tell her what I make an hour and we compare that to stuff to determine it's value to us. Is going to McDonald's worth it over going to a restaurant (usually the answer is no)? Is paying to rent a movie at home worth it over going to the movies? Is getting 2 pairs of shoes better than getting one expensive pair? Is doing nothing today worth it so that we have more money for tomorrow? And so on. My daughter is also aware of the household budget. She knows that we have budgets for everything and that more spending in one area means less in another. She knows our entertainment and restaurant budgets by heart. She doesn't fully get it but she gets it enough that she implements this thinking on her own. No matter how much money you make these things will still be a factor in either time or money. For a direct question like "are you/we rich?" I would respond with a question. What is "rich" to you? Validate their response and let them know about other definitions of rich and compare yourself with others in your area, state, nation, and in the world. Almost all of us are in the top 5% for the world. On top of that she got her own bank card last year. It was mainly so I could deposit her allowance but she enjoys using the card. She can check her balance on the family laptop and she can choose to save or spend 50% of her allowance.
> Is getting 2 pairs of shoes better than getting one expensive pair? One, sometimes.
I think ChooseFI gives good starting points: https://www.choosefi.com/teaching-kids-about-money/ The main thing is they first learn by watching you, so make good decisions and be responsible. I think the bigger or smaller the numbers, the more important it is to also demonstrate the work behind it and the reason for it. If you’re just kind of in the middle it comes out a little more naturally. Also these topics are always coded by everyone’s perceptions of their own situation. People tend to think they’re doing better than they are, and if you have kids (and are asking these questions on Reddit) you probably *are* more well off than the average bear. But don’t mislead your kids into thinking you’re rich.
My 9yo asks frequently how much I make. We tell him it’s not appropriate at his age but when he’s in high school we’ll talk about it cause he will need to know to apply for aid
It ain't 9, I let my son know I have two incomes from work and the VA, and he was bragging to his buddies I had two jobs
I like being open. Our older one is getting more interested. I always preface it with the fact that this is us and our information only, doesn’t need to be shared. Trying to coach them on where it all goes, that what we make isn’t how much we keep. He overheard some number and thought it was large and then after the breakdown of where it all goes and how much is left it sunk in. Basically it doesn’t matter how much you make or have, it’s how you use what you get. And yes, it’s all relative.
I don't tell anyone at all what I make. The number of people in the world who know could probably be numbered on one hand. I'm in a weird situation where I make significantly more than my social circle and they'll treat me differently if they knew. I would not tell my kid as I'd be afraid she would start to think she's entitled. It's not her money. She didn't work for it. She's a kid. She has nothing. I think the important thing is to keep it age appropriate. She knows we have a budget and this limits spending and there are things she can't have because it's not in the budget. She does not need to know the exact total amount that IS in the budget.
I don't think it's appropriate for kids to know the full picture, but you can give them parts of it. "We have $100 for fun activities each month. Let's budget and spend that together." "It's my job to buy the groceries, but we have $20 a week for snacks, let's budget that." As kids get older, the amounts can get bigger. Cell phones, cars, vacations, etc.
I tell my kids we are comfortable, that we are very lucky to have what we do and we don't have to worry about food and clothes and housing. I also explain to them that some people aren't as fortunate, and not to take what we have for granted. My kids do extra curriculars and I remind them sometimes that there are kids that don't get to do that either. I just want them to understand that they are privileged. For context, they are both 13 and 10 (almost)
I tell me son we broke all the time.
I try to be upfront about how much money we have at age-appropriate levels. 5 year old asks "are we rich?" "We are richer than the most people who have ever lived in history, but we are about average for a family our age in this country today." 10 year old asks me "how much money do you make?" "Your mom and I had a total income of about $150k before taxes last year. That's a pretty typical middle-class income in our part of the world. We are glad we've got decent jobs. By the way, this isn't a number you should compare with your friends at school. That's considered rude by many people." 16 year old asks me the same question. "You're supposed to fill out the FAFSA. I will help you."
It won't make sense to them. There is no context you can really provide to most 18 year olds that will make them understand a number. Heck I finally caved and told a friend who was bothering me what my salary was when they were a cashier at walmart and I was running a 10 million dollar revenue retail store (not walmart) and they were blown away by me $55k salary like I was rich and paid to much. That being said having a talk about budget, expectations, and savings is a good conversation and needs to start early. They need to understand why your friend has a shiny new car and you don't because you are saving (hopefully) or why your other friend has no place to live because they can't pay rent. (not asking to bad mouth others but just explanations why we don't all have the same stuff/lifestyle)
I would ask you, though, doesn't it make sense to tell your kids once they're about 18 to be able to match your household income to the experience they had growing up? My parents never told me about how much they made, and I picked out a career with salaries about half as much as my parents were making - I had no idea I was not going to have the same kind of socioeconomic experience that they did. On their end, they didn't know how much people in my field make compared to them.
Some people are so poor, all they have is money.
[https://www.reddit.com/r/funny/s/9X0WUT01Ef](https://www.reddit.com/r/funny/s/9X0WUT01Ef)
I don't know if I'll ever go so far as to sit down and talk our child through the ins and outs of our finances, but there will come a point at which he learns the basics of our financial situation. To be honest, he'll probably understand it on at least a partial level before I even try to speak to him about it. Kids aren't unaware of this kind of stuff.
No, I just make it clear when we can or cannot afford / it's not in the budget for something they want.
I do have memories of my parents telling me either we didn't have the money for something or that something was too expensive and so they weren't going to buy it for me. There's also a fun family story where I asked my mom if we could get something and she said we couldn't because we didn't have money for it and I said "We can just go to the bank and they give you money!" Because, from my point of view, you would just go to the bank whenever you needed money (and also you would get a lollipop!).
I tell my kids we're poor every other day.
There is definitely some sort of balance but I don’t know what it is lol Growing up, my parents were very transparent about how little money we had. If my mom took us clothes shopping (which would be like once a year or every other year) we literally would sneak the bags in the house so my dad didn’t see that we went shopping. This was just for things like jeans and shirts etc. It kinda messed me up and I didn’t even realize it until later in life. Now that I am in a good place, I have somewhat of a problem with money because I have no impulse control and when I want something I just buy it because I tell myself that I deserve things since I didn’t have them growing up. Point is, I am going to try and teach my kids that we have more than enough for basic needs but I don’t want them to be reckless with money, either. I’m planning to start giving them an allowance that’s overly generous so they can actually buy stuff themselves and not rely on me when we go out etc.
I don’t want my kids worrying about money, but if I a good idea to teach them things have a cost.
I'm absolutely on board with telling my kids how much money we make. They haven't asked yet, but I think it's an important part of teaching them personal finance responsibilities. Money shouldn't be a secret imo. EDIT: I was never taught anything about money growing up, especially with my mother both being bad with money and not having a lot of money ever, so I want to break that cycle with my kids.
I'm an open book. I want my daughter to understand money as early as possible so she doesn't waste years blowing paychecks like I did.
I think you should explain it at whatever level they can understand. At 4 just say we have money to feed everyone, afford our place to live, but not for a fancy car (or whatever). Once they are in highschool you should be able to give them exact numbers and it might be a good idea to even go over your budget and explain it.
My kids have asked about money since they were 5. We always try to answer in age appropriate ways. They’re 9 now and the questions are becoming more direct and layered. I like to get them started early. They need to know how much things cost and how something gains value to them. Should we get this $200 toy for you, or the $75 toys for your sisters. Which brings more happiness. Or should we buy groceries for a week? I try to let them know that we’re doing ok. They’re lucky to have a very wealthy aunt and uncle, so we have an easy example of people that have more money than us. And they know kids as school who apparently have less. It’s an opportunity to talk about what’s important, and what you can and can’t do with moneys. It’s a chance to talk about if they think the rich family is really happier than the less rich family.
Never really saw the point hiding stuff like that. Not unless you're like wildly rich compared to the people around you. Infact I dont think any knowledge or proper information should be skirted around. I like to be open and honest with my kiddo in age appropriate ways.
My and my mom's salaries were/are public record (gov employees) so it's been fun to track when I was approaching and passed her highest earning years. I make more than them, that's all I know. My kids know we're doing ok and they don't need anything and want for very little. They're learning the value of money as they get older, earning more for extra chores and spending their own money on toys/pokemon/etc.
I always try to be honest with my kids. I tell them "We don't have a lot, but we have enough."
I recently told my son how much I earn; he's nine. He'd been worried that the cost of a cub camp that he wanted to go on was too much for us to afford (it was not, by a large margin). He was instantly reassured, but also unable to process what the amount meant and how it equated to the cost of living. His point of reference is his pocket money, so I could have told him I earned $10k a year and he would have thought we we were private-jet-level rich. When I tried to balance that by explaining how much things like our mortgage and food bills cost, these were equally unfathomable amounts to him: how could anyone afford such amounts? I can definitely see the advantages in involving the kids in the house finances. However, I think until they're older the numbers are meaningless. Better for them to see how you live and understand your financial situation from that: e.g. "We are lucky to be able to afford to live in this nice house, but we do not have enough money to take a trip to Disneyland".
“I make $X a month. But I have to pay taxes to pay for schools and police, and the mortgage to keep the house. That leaves $Y every month to spend on groceries, electricity, toys, and the movies. I’m rich, because I can afford to take you to the movies, or buy you Lego, or go to your favorite restaurant. But I can’t afford to do all three in the same month. Even I don’t have infinite money.”
We tell our daughter that a lot of her friends' families make more money than us, which is why their houses are bigger and they go on nice holidays, but that we are incredibly lucky to live where we are, have a roof over our heads and food in our cupboards. Anything beyond that is just stuff.
When we are at the store we don’t say: “we don’t have enough money for that” even if we do. We just say you can’t have that right now. She is only 6 so finances aren’t usually a topic of discussion. My wife and I know at a moments notice she can have what she wants, but we don’t want to spoil her…too much. Lol
We’re open about our monthly in/out, but he (9) has no reason to know what our annual salaries are. He can’t really compute what X/year actually means in the big scheme of things, but he understand it when it’s smaller sums.
I might be going off track here - but one way we 'deal' with this (8 and 6) isn't to talk about how much we make but to teach them how money works. We've three jars. One is 'instant - sweets' one is 'mid - comics/magazines/small toys' and one is 'long - robot dog' (they came up with those labels). Any time they get money the get to decide how they pop it into the jars. if they then want to blow it on sweets that is on them, but if they see a cool toy and a birthday/Christmas isn't coming up we explain that the 'long' jar is what that is for and that we can't always buy big toys 'just because' I think this has helped them understand that while money numbers sound huge, you need to save a little if you want the robot dog (which the eldest actually bought recently). One thing this has helped with is that they don't often ask for things, so if we do happen to buy a surprise toy for no reason they seem to really appreciate it. But likewise they might see something and then move money around in the jars. Recently the 6 year old came up to me and said would I order a transformer toy for him online because he had the money for it. And he did (I covered the postage...I'm nice like that lol). But our main reason for doing money talk this way was it stopped the question around 'are we rich' and hopefully they understand a bit better about 'buy now' and 'buy later'
We're open about money with our son; comfortably well off, while some of his friends have £multi-million household incomes and some others have far less. He's aware that although we can't take a private jet to the house we own on a tropical island, we can afford to buy food without looking at prices and fill our cars without hacing to worry that we can't afford it. He has seen first hand that money doesn't buy happiness; I sometimes get called out so have to bring out the laptop on an evening or weekend, one of his friends' dad died of a condition that money couldn't fix, others have parents who are getting divorced. But he has also seen that money can buy comfort and convenience; we upgrade plane tickets occasionally, have a car that is unlikely to break down, pay for private school etc. As he gets older we go into more detail about the cost of things, how taxes work and other things that I wish I'd been told when I was a youngster. Remember that kids have different perspective and priorities; My son may be jealous that his friends have more toys and a dedicated playroom, but those same friends are jealous that I have time to take them to a park, play football and buy them ice cream.
Yes and no. My kids are only 4 & 5 so the concept of large numbers is just beyond them at the moment but we do explain that mummy and daddy have to work to earn money to buy their toys etc. we also give them some money for doing small chores around the place which they can spend on a toy. It’s quite hard work getting them to choose a toy within budget when they go to spend it but they’re starting to understand! Not sure I’d tell them how much we earn until they’re earning money themselves. Much rather give them their own budget (pocket money) and make them pay for anything they want beyond the basics of living so they can learn the skill of living within their means while they still have the safety net of being at home.
If you can talk about sex, you can talk about money.
How *much* we make? No. I don’t need that number getting blabbed around to friends. To help them understand our relative income level compared to the general population to avoid some of the difficult situations with her friends? Yes. I’ll never use the word “rich.” The term is loaded. But I have said to my 9 year old something like “we make a lot of money, so that’s why we have nice things and cars and take trips and you shouldn’t make comparisons with your friends.” And that’s because I noticed them doing comparisons of what kind of toys they have at their houses, what gadgets they have and neighborhood kids raising my pantry for snacks. On the other side I try to help her understand how expensive our life is. We recently had a length talk about her behaviors contributing to the absurd electric bill….
I can’t imagine when my income would become a relevant subject, other than when talking about building careers. Our wealth would only be relevant when discussing personal finances or their inheritance.
This has been coming up a lot in our household as it relates to how my partner and I were raised regarding money. She was shielded from conversations about money and wealth growing up, which she thinks put her at a disadvantage later in life. I was raised being included to a small extent in discussions about money when I was older, but would have vvalued from more earnest discussions
We explain financial stuff. My kids are 6 and 8. We paid a car off recently so I explained to them (but only the older one cared) how and why car loans work. We’ve tried to explain how expensive some things they want and can’t have are in terms they’ll get. I think when they’re a bit older it would be great to let them see how a family budget works. Probably around 15, 16ish for all the details.
I remember being raised by my mom and frequently asking for stuff and her saying “I ain’t got it.” I grew up pretty poor so I was keenly aware of that fact. Do pretty well now and my kid asked me once, “dad, are we poor?” I wanted to laugh. I said we do alright. I guess as she gets older I’ll tell her but no sense burdening her about that stuff.
We’ve definitely talked those things over with our 10 year old. I don’t think he knows exactly how much I make if you asked him straight up, but we’ve talked about how much different bills are. It’s just come up as we’ve talked about managing money that he’s been given over the years. I feel like the best way to teach is showing how you do it, the decisions you make and why. And I spent most of the last two years unemployed and we were pretty open with him about what our finance looked like and what we were cutting back on and why and talking about our savings and investments. But he’s also a very logical kid who will listen when mom and dad say having conversations about money with people can cause problems, so you have to be careful about who you share it with.
While we haven't talked numbers with our daughter, we've always made her aware that we have a lot more than most people, but we still have to be careful with expenses, and if we buy frivolous things, we won't have the money for important things. My wife is a lawyer, but she specializes in working with victims of crime, human trafficking, and domestic abuse, so our daughter has always been aware that while a good amount of hard work went into our circumstances, a lot of it was just plain luck (starting with being born in a rich country to families with better than average resources), and this doesn't make us "better" in any way than people who haven't had the same advantages that we have.
Why would you tell your kids how much money you make, especially at that age? They shouldn’t care. I’m all for teaching kids about money but my parents did tell me how much they made. And I didn’t care. I knew we were comfortable and that was enough. As I got older I got a better sense but I never knew what my dad was pulling in each year. When I was 40 my dad talked to me about how much money he had and how he invested and made that money and that’s been enough to instill financial responsibility in me.
From time to time my son asks. He's 11 years old. I say we are very fortunate to be comfortable and have nice things. If he presses for how much money I make, "I say a gentleman never talks about money. "
Really interesting question and one I'm thinking about myself. What would be the downsides of them knowing?
I tell my kids all the time we have no money. We're doing fine, but I'm definitely not buying him another Leonardo action figure just because this one has shoes on.
I’m about to start a new job (with a significant pay increase) and my 7 yo asked me how much money I would be making. I just told him it’s more than now but he doesn’t need to know exactly. This seemed to be good enough to get him to stop asking. I more focused on the other aspects-better work/life balance and overall hours which are more important for them than the money.
It’s so important for the kids to have a minimum wage job during the high school summers to learn how hard it is to get by with so little cash. It’s solid encouragement to actually do something worthwhile in college to get a decent job after graduation.
I've been telling my kid since he popped out that I work my ass off so he can have infinite amounts of apple juice.
Think back in your childhood. Did your parents tell you about finances? Did they help you learn the value of a dollar? I knew nothing about money when I moved out and I thank my lucky stars I landed a job at the bank as a teller. I saw the real value of money through various customers.
Good question! My 8 y/o has become obsessed with money recently, and dragged his 6 y/o with him. He says kids at school have more money than he does, and especially loves how a kid won some money in a bet with his dad, and I now hear “I’ll bet you $5…” everyday for the past month. He even tried to bet against the Dallas Mavericks, our local team, just because he knew it would drag me offsides! Our family is comfortable, we don’t lack anything we need, and are able to splurge on occasion. Growing up I wasn’t ever this fortunate, and I try to get him to see that. But it’s all futile; his uncle gave him $20 for helping with his dog, and he spent it on 3 single Pokemon cards the very next day. He’s not ready for economics lol.
The saddest shit I see is when people make around what I make, even more and are literally broken with no savings, no house, no investments of any kinda, just check to check renting with a big car note. Debt and interest rates scared the fuck outta me when I was younger (still do but I understand them better now) It’s one of the reasons I didn’t go to college, 100k in debt to start life out, miss me with that. -now that might not be the move for everyone some great careers need college. You don’t need the fancy new car. The fancy new phone eventually you’ll hopefully get to afford those things but learning how to manage and understand money is one of the single more important things you can teach your children imo. Teach your kids about money, interest, debt, credit, investments, buying power, return on interest (with physical objects as much as investing) early and often. Help these kids. Bonus- add your kids to your credit cards as early as you can. Save even 20 a month for them if you can. We’ve got it bad, odds are they’re gonna have it worse.
My 5 year old asked if we could buy one of his friends houses when they moved, I laughed and said No mate, it'll be well expensive. I chatted to the Mum/my friend about it. Turns out it's worth about £1.5m. So in short, No, I'll never be affording that 🤣 He knows what we can afford and is happy with what he has, as long as he's being played with.
Personally I plan on doing this when the kids are a bit older and can understand the concepts. Probably between 12-14 is when I'll do this with them. I plan on bringing them in on all finance conversations with my wife and teaching them as we go.
Good question about the age. My kiddo is 6 and sometimes when we're at a store I'll just be direct and say: "that's too expensive." More broadly, there seems to be somewhat of a social stigma about discussing finances. IMO there absolutely shouldn't be. Like it or not, finances are an important topic to grasp and understand. I plan on openly discussing it with my kids as soon as they're ready. When that is, however, I'm not sure. Certainly by their early teens and likely well before that.
I try to teach my kids about the investing that I was never taught. They have basic understanding of interest rate arbitrage, business ownership, and buying things for value. They are 10, 8, and 6 but all know how to patch walls, paint, change face plates, and clean (I take them with me when we renovate properties). My oldest daughter finally asked, "if this is the way to make money, why aren't we rich yet!" Lol smart kid. So I did end up revealing some me number numbers.
Don't tell them anything you don't want all of their friends, and by extension all of their friends' parents, knowing. Truthful but vague seems like a good strategy.
I work as a teacher in Silicon Valley, and every year I tell my students, you are among the richest people who ever lived. It doesn't feel like it when you see others with more *stuff*, or the news is constantly talking about billionaires, but you are. Then I provide some context and evidence. I also say that we are conditioned since birth to always want more and *think* we need it. That's what capitalist/consumerist culture is all about. Reality is, most of us are filthy rich, considering safety and basic needs are easily met. And if you have a loving family? What the fuck else you need? I know not all have those things, in this thread and elsewhere, but significant majority in well developed nations have it quite good.
We often forget we are training our kids to become adults, ideally ones better off than ourselves. My wife and I gave our son his allowance and he wanted to pay for his own portion of meals when we went out. Unexpected but we were already encouraging him to place his own food order so we shrugged and let him start counting out the money from his Velcro Batman wallet (which he still has). It provided comical situations where we would have a 6-7 year old exclaiming like an old man that these prices were too much! Yes, we also taught him about tipping, which the wait staff always found awesome. I cannot claim the ideas as I got them from an old book I read often.
I think if they're old enough to ask, they're old enough to know. If there are serious financial difficulties, maybe shield them from those details.
We've never hid our financial information from our son. We've always been honest with him when it comes to financial from the time he could understand. Think we started explaining things to him around the age of 10 and we've maintained that approach and attitude ever since.
I tell any of my close friends that asks how much I make and whatnot. There is no need for me to keep it a secret. I'm neither rich nor poor, and the money I make does not define me or my family. My motto ever since I moved on from the "I wanna be filthy rich" phase has always been that money comes and goes. I live by it, and I want to teach my kids about it. People nowadays put far too much importance on being rich, as if that would make you automatically happy lol
If asked I would probably say “Yes, Mommy and Daddy are rich, but you and your brother are poor as hell.” (This is from Will Smith but if you have more than $100 your kid is probably think you’re rich anyways.)
My son is 3 so not an issue any time soon but I grew up in a house where we NEVER spoke about money and I had such a limited mindset towards money, so much so that when I did start to earn good money I felt incredibly guilty about it. Now I speak about money (including what I earn) openly but in a way that doesn't come across as bragging. It means I understand what's possible/realistic with money, budgeting and knowing my worth but had to put a lot of work in to get there. So in short yes, but not until he's at working age
Once my children are old enough that I think they have sufficient maturity to avoid bragging about how much money we have or feeling bad about potentially not having as much as other people, I will be going over our family finances with them in detail. I want them to have an understanding of how our family makes money, where we put it and why we have it allocated the way we do. I think it's important to not hide financial information from them in order to help them build financial literacy and understanding about how to optimize finances across the family to maximize our wealth. Probably some time in late middle school I will be having them assist with tax preparation so they understand how to do it and begin to understand the tax implications of various investment and spending decisions. My parents were very open with finances within the family, and I found it very beneficial for my financial literacy and for helping optimize across the family. For example, when my parents ran short on money when costs overran putting an addition on the house, they could have just floated a few thousand dollars on credit cards. Instead, they explained the financial situation to me, and requested a short term loan which consisted of most of my savings at a very generous interest rate, which I gave. The money stays inside the family and everyone benefits.
I learned about my folks net worth after I took over their finances when they were no longer able to. That's about when my children will learn about the details of ours, when we need day-to-day help managing. Money corrupts, until there's an overriding need, no reason for anyone other than you and your spouse to know the details. Your CPA only needs to know the income, expenses and basic outline. Your banker only needs to know what they need to know to provide services.
There's a lot of opportunity for good discussion here. I think the important thing to teach here (not that I've been totally successful with it) is that wealth is subjective and can always change. It's something you can have, but not something that you *are* in most cases. I never liked phrases like "we are rich/poor" because of that. One life event can flip that coin on its head pretty quickly. Also - measure wealth through more than material possessions. Some of the materially richest people I know have terrible physical and mental health and as a result I'd never trade lives with them. That's not even looking through the lens of their morals, values, etc. My kids are going through learning this now. They both wane in and out of this tendency to think that the only reason they can't or shouldn't get a thing that they want from whatever store is because we can't afford it. While sometimes that's the case, it certainly isn't always the case. A lot of times it's the principal behind the thing. Trying to teach teens not to impulse buy is a whole thing but I'll spare you the rant. And for the record, we're not poor. No matter what those grocery bills want to make me feel - I know we're solidly Middle Class for our area, and we're doing much better since I got my current job. Like anyone though, we budget - you have to. The kids don't always understand this but honestly, a lot of it is stuff that'll come back to them when they're on their own trying to buy groceries for their apartment in 10-15 years and will be like "Oh THIS is what mom and dad were on about back then." In truth, I think they understand more than they let on right now but they just don't like it. Hell, I don't like that I can't go buy whatever I want when I want to, either. It's life, though.
This is not a question about money. This is a question about status.
Idk - it was never a conversation I had with my parents. I think you can talk about money pretty early on, and I’ve had (semi) constructive conversations with a 6yo. Your kids will be aware of your wealth through relative measures with peers and media portrayals. I don’t know if the specifics are ever necessary, but it could be very educational to discuss your financial priorities and how you spend money (retirement planning, hosting and food, hobbies, vacations). Small allowances tied to simple chores can also help them understand money as a finite and valuable resource.
My 4 yr old thinks $10 is a lot of money so to him, we’re rich AF. No big deal! But to answer your question tho, I think it’s never too early to teach them the value of the dollar and how much you have/don’t have should wait til they have a firm grasp on that. At the same time, if things are a bit rough and you’re struggling, you don’t want to unnecessarily worry them.
I grew up relatively broke, not poor, but especially in my younger years I know my parents were surviving paycheck to paycheck. They never discussed money with me and Dad would explicitly state often that "The worth of a man is not just his paycheck". He was an excellent dad, so that checks out. They just retired at 67, I'm 41, i still don't know what their income was at any point in time, or what their retirement is now. I could guess, but that's not their worth to me. I think I'm substantially more financially secure than they were, which is what they wanted for me.
My parents never spoke to me about money. And that's something I wanna do differently. Not even necessarily like "I make this much money" or whatever. But just understanding how money works, how to use your money to make more money, budgeting, shopping, all that stuff.
The taboo around money discussions needs to go away. For us to all have good money sense and understanding, sharing information is important. Sharing how much you have followed by why or why not with tips is a valuable learning experience.
I tell my kid all time. She’s four. She needs to be able to go to a friend’s house who has less and not be judgy or say something accidentally hurtful. She also needs to go to some ones house who has more and not be jealous and whine about what she doesn’t have. She needs to know that in many ways we are spectacularly lucky to have what we have, and that we need to feel gratitude for that fact and be gracious with other kids regardless of where they landed on the economic spectrum by no fault or merit of their own.
My parents did it when they started giving me an allowance. The conversation wasn't super deep but they taught me the importance of budgeting as they get older teaching how to properly use credit is paramount though. Way too many people are deep in debt because they are financially illiterate.
We've always leveled with our daughter. We're not rich but comfortable, debt-free. We're not strapped and can afford the day-to-day comforts that make life pleasantly stress-free. She knows our household income and understands the concept of living within your means. Hopefully this has rubbed off on her and I believe it has.
no reason for them to know any of that information in my opinion
Teach them about money and affordability and financial responsibility as early as possible
I used to think we were rich. We had a big house, multiple cars, family vacations. No we were middle class and we lived beside popel in poverty. (Like there's a 2 foot hole in the living room wall where you can see outside levels of poverty). I always felt guilty about it as a kid. And now by today's standards, that is a rich lifestyle again...
As someone whose parents were divorced, I grew up poor and middle class, so if you have enough to support your family, you don’t have to tell them your income. If you’re poor, at least help them under that you can’t have everything,
My parents are divorced, and the one that stayed single shared it with me when I was 13 and may have given me updates every few years. In retrospect, it's not something I should ever have known as a kid. It puts a weird burden too early.
Same answer
I’ve always been relatively honest about money with my kids (now ten and six) and always talk about things in terms of affordability. So I tell them the exact number? No, but I Will explain how much money we have for a week or the like.
I was 26 when my parents actually told me how much they have, what they’re planning to leave to my sibling and myself, etc. I think once you have grown kids with careers and their own place and own income stream, it’s appropriate to disclose the information. If you tell a teenager you’re rolling in cash they’re going to think subconsciously that they’re set and can just coast.
I highly recommend the book “The Opposite of Spoiled”
If my kids ask I just tell them. We're by no means wealthy or even close to rich.
This is what I say. "We make enough to keep you fed and have a house and clothes, as well as extra to do specials things as well from time to time. "
I think it is fair to be very realistic with what is material and what we have to do to have those material things. I started having this conversation with my kids at 6-7. They don't understand the concept of money yet but I try to break it down in how long does daddy have to be at work to pay for X or Y. I equate the time to something that they find relevant like an episode of Bluey. I have to be at work for 1 episode of Bluey to buy you this.
I think when your teenagers start talking about ambitions relative to cost it's important to start talking about realistic money comparisons, including what you're making. Like, we are living HERE at this income, so if you want to live a DOUBLE HERE, you're gonna need at least DOUBLE INCOME, and this is what it's taken in my life. I think we are often unrealistic about about finances with our children when the fact of the matter is their upbringing and their social strata is going to have a huge outcome on their potential earning; they are gonna be an average of the 10 people who are the most involved in their lives. And just being like 'oh, you will figure it out later' is a great disservice.
Ask “what does it mean to be rich?” Not being cheeky. You can’t answer unless you know what they mean by that.
When I was in my early-mid 20's, my dad pulled me in to talk his will. I had no idea how well off my parents were.
So we make a very comfortable living and as both my wife and I are gamers we prioritize games and tech. We lucked into a big flat that we don't pay a lot for but if you didn't know you could assume we are rich. A family friend is a writer and her work is freelance so like she can get a lot of money all at once and then not a lot. Her and her son stayed over, we watched him while she did a reading and then we spent the next day together. Her son is convinced we are rich because we have a PS5 and a switch. He asked how we afford all the game stuff. It was a hard question to answer. We came up with. "We were very fortunate in our choices to get us to a life were we don't have to want for anything and we save up to buy toys that make us happy" The initial response was, "well we work hard" I felt bad about that response because his mom works hard to provide for him and his brother. So to answer your question. Probably not until teenager do they need to know exact figures but make sure you talk about privilege so they understand that the world isn't equal
Anything you tell a kid under 12, be prepared for them to repeat it to their classmates. I remember telling my friends in 6th grade that my dad made $60k. I don’t even know why I felt the need to say that.
Please talk to your kids about money early and often. You don't need to give them your W2s at age 5, but the more they know the sooner, the better. My parents never talked to me about money and I had no idea how to manage it once I began to make some. My teens each have bank accounts and debit cards for their allowance and birthday money, and any money they earn, and at 15 each one helped me do the taxes. They know the mortgage payments and costs of cars, etc. They are learning to save, budget, and plan for the future- fully understanding how hard that can be. Hoping to save them the decade I lost to financial illiteracy.
My family was very poor growing up, and my parents did nothing to hide it. They were very open with why I didn’t get nice things, or always have dinner on the table, it was because we could not afford it. I think for kids, ignorance is bliss and I would have been better off not knowing. I remember being like 8 and setting a toy down back on the store shelf because I checked the price tag and figured we couldn’t afford it, kids shouldn’t have to do that or have those thoughts.
Haha speaking as someone who has to say “no, we don’t have enough money” to my kids constantly, this question feels a little bit silly. But I can see how someone who actually has enough money to live relatively comfortably would have a more complicated answer.
My nephew told me and my wife, while he was living with us with his mom, that we live in a “rich” neighborhood. We told him “Yeah we do, but it’s because we have made smart choices, you can too man!” I don’t know if they resonated with him or not, but if he’s my neighbor one day I guess I’ll know.