I was raised in total freakin' financial ignorance in the 1960s & 70s. For those of you who think it's not a good idea to share the general family finances with the kids-- shame on you. I never felt comfortable about family money and I usually learned about issues via the "lightning bolt" method. When my father quit his job (bad work environment) I freaked out and had no sense of reassurance or comfort.
I never had an idea what my folks earned, how much we had, or how much we spent. College funding was never discussed because I went to a service academy. I learned budgeting & finances the hard way during college, and after college when I asked Dad about investments I was directed to the Business Week annual mutual fund rankings.
Spouse was ahead of me there. During the '80s & '90s we saved like crazy and put it into "good" Fidelity mutual funds. I didn't educate myself out of my blissful ignorance until well into the late 1990s through financial websites and books like Dominguez & Terhorsts.
I guess my parent's finances were OK. When my grandfather died (six years ago, or about a year short of Medicaid) my father disclaimed the small inheritance and passed it on to us kids. These days my father jokes about not eating as much in order to afford expensive prescription medications. At least I hope he's joking. It's hard to tell.
My father-in-law was a financial whiz in the '70s and '80s with rental real estate and individual stocks. Spouse learned a lot about saving, managing money, and rental real estate by watching him. But they never talked about money with their kids, either, and today we suspect that these children of the Depression have their portfolio 100% in fixed income and losing to inflation. Now that interest rates have started dropping (and their Treasuries are rolling over at lower APYs) we are not looking forward to the phone calls. Spouse feels impaled on the horns of a dilemma-- "If I don't send a check, they'll keep calling. If I do send a check, they'll never call me again-- until next year. Hmmm."
In typical Boomer fashion, we've totally overcompensated by teaching our kid about financial management as soon as she's shown the motivation. David Owens' "First National Bank of Dad" book rocks. She's had an allowance since before kindergarten, "Bank of Kid CDs" at age 7, a checking account at age 9, a semi-annual clothing budget at age 12, and a credit card at age 13. Now at age 15 it's all worked out great; she has an $8.50/hour part-time job and a Roth IRA. Next step is a gas budget.
Our Nords family finances have always been discussed in terms of whether something was in the budget or not, and as she started middle school we started talking about her own budget. A couple years ago she came into the room one day as I was working on the Quicken ER portfolio, looked over my shoulder, and said "Holy sh-crap, Dad, is that how much we have?!?" In my best Cosby imitation I pointed out that her mother and I had the money but she was broke. Then I talked about how it seems like a lot of money today but it has to last for 40 or 50 years.
We freely share the data on spouse's Reserve pay, my pension, our spending, and occasionally our stock-market performance. We go into great detail on what it costs to live at college, buy groceries, eat out, own a car, set up a first apartment, and buy a house. When she expresses fondness for a luxury item we say "Gosh, you better get a really good job and save up for that." Now that she's achieved both of those goals we help her research her purchases and see if they're really necessary for her lifestyle. She's decided that she doesn't need a monthly cell phone bill or a Palm Pilot until she's in college, and her savings are getting to the point of starting up a taxable brokerage account. But she's treated herself to some really good drafting equipment and school supplies.
We have the usual "In Case of Emergency" folder with all the financial info, account numbers, logins, and passwords. Spouse's brother, a CPA, is the guardian for another couple years. When our kid turns 18 she'll become our executrix. Spouse and I haven't decided yet if we're giving it all away or giving it all to our kid. Plenty of discussions but no decisions.
So for now we tell her that we're doing our best to spend all of our money, that we're planning to attend her 75th birthday party, and that we're not leaving any inheritance. She "knows" she's gonna have to make it on her own, and we wouldn't spoil that motivation for anything.
