Spilling the Financial Beans to the Kids

[Nanita8140]

My daughter is 10 now and last year I sat her down for the "talk"...no not the birds and the bees(that's coming up soon though). Anyways, I sat her down with our pay stubs and our bills, bank accounts, etc. I told her about our budget and about living below our means and why and how much we save. She's never been a big spender as she grew up watching me be very thrifty. She started getting a weekly allowance for chores this year also. This past month she wrote a report on the importance of compounding interest and the affect of inflation on one's savings. She presented the report in front of her class.....the teacher was amazed and really proud....you can imagine how proud I am of her.

[cute fuzzy bunny]

Quote:

Originally Posted by Culture I still have nightmares about the stories where the kids kill their parents in order the receive their inheritance .

I'm shooting to give my son many reasons to want to kill me, besides the inheritance. That way, I figure we both stand to feel a lot better about the whole thing.

[Bestwifeever]

Quote:

Originally Posted by cute fuzzy bunny I'm shooting to give my son many reasons to want to kill me, besides the inheritance. That way, I figure we both stand to feel a lot better about the whole thing.

Are you timing that for right before you're taken to the LTC facility?

[HFWR]

Too many kids, and many adults too, have no frame of reference. Kids don't know how much it takes to live, or retire, and many adults have no concept of saving/investing...

Loose lips sink ships...

[REWahoo]

Quote:

Originally Posted by HFWR Too many kids, and many adults too, have no frame of reference. Kids don't know how much it takes to live, or retire, and many adults have no concept of saving/investing... Loose lips sink ships...

To my way of thinking there is a huge difference in discussing earnings and net worth with your kids vs. discussions of savings, investing, spending, budgeting, and LBYM. To do the first serves no good purpose; to not do the second is child abuse...

[Dog]

My husband and I were open and talked about money, bills, savings & investments in front of our daughter. Neither of our parents were very open about finances while we were growing up. We both subscribe to LBYMs, but we never felt like we could talk to either parents about money when we were first starting out. It almost felt like it was taboo. My parents became more open about finances in their later years. Interestingly, my husband is the executor for his parents, but he still has no idea about their finances (just the account numbers and locations of the accounts).
Our daughter will be 25 this summer - she doesn't hesitate to talk to us about money issues. She is looking to buy a house in the next year or so - and we haven't noticed any problems from being open and honest with her on this subject.

[clifp]

I am surprised that people would want to kids in the dark about their financial situation. Hey most of us take polls on the forum for complete strangers.

I had a pretty decent idea as a teenage, since my parents bought fixer up houses in very nice neighborhoods, but were seldom in a position to keep with the neighbors with respect to other material goods.

When my dad announced in my senior year of college that he was taking an early retirement. I had an exact understand of their financial situation. Including the you are on your own for college!

It seems to me that since schools don't teach financial literacy it is up to parents to do so..`

[CuppaJoe]

Quote:

Originally Posted by clifp .... When my dad announced in my senior year of college that he was taking an early retirement. I had an exact understand of their financial situation. Including the you are on your own for college! ....

Come to think of it, my dad did let it drop, in my presence, but not to me directly, that parents are only responsible to get their kids thru H.S. And my mom let it be known that they planned to pay for no weddings.

That was my homeschooling, but I could budget within a penny how much it cost me to live one month, four months, a semester, etc. Served me well.

[Culture]

While I knew that it was not the norm, I had no idea that our path of complete disclosure was so unusual. Our modern culture is very strange about sex and money. Keep in mind that no too long ago, everyone slept in the same room, and everyone know exactly how many cows/sheep/acres of land you owned.

OTOH, I understand the difference between telling your kids about sex and telling them about your sex life. Not the same thing, and I guess this also applies to finances. Maybe it shouldn't.

[Notmuchlonger]

My folks kept me in the dark. Even when they retired it was hush hush. Good thing the public school system taught me how to balance a check book

[Rambler]

I've known for years what my dad made (not much). He made that clear to me in my youth so I would get a college degree and have a better life than he did. I find myself now in the opposite situation. I am not afraid to tell my kids how much I earn (and if they asked I would tell them about my investments). In fact, because we are able to live a pretty good life with frequent, nice, but not extravagant, vacations, homes in Asia as well as the states, etc, I make sure they are aware that the kind of money I make is not normal, and therefore the extras that they enjoy are also not normal.

Their friends at the American school here all come from similar backgrounds with fathers and/or mothers who are senior execs sent from the states and who are paid very well, and I make sure they are aware that this is also not normal. In fact, while not meager at all, most of their friends would think we live a pretty meager lifestyle, compared to theirs, even though we are not in a meager lifestyle at all, just LBOM, actually WAY below our means, and much simpler lifestyle than many around us.

I also make sure they are aware that none of the extra things we do is done on credit. After years of preaching the evils of buying on credit, my son asked me one time when we were on vacation in Hawaii, why I was using a credit card. This gave me a very good opportunity to explain to him that using a credit card was not bad, so long as he knew he had the money to pay for it as soon as the bill came, and that the bad thing about credit cards was "abusing" them...spending more than one could pay.

The point is that I don't want them to think that they can live this lifestyle fresh out of college, or without having to make some of the sacrifices I have made, to be able to have this lifestyle. I don't want them to think they can FIRE without a lot of hard work and savings. So yes, I let them know what I make, and I also compare that with the amount of money that my brother, sister and BIL make (I don't know exactly, but I know relative salary levels pretty well being in the position that I am). I let them know, not in a derogatory fashion, that the lifestyles they lead will likely be closer to my siblings' if they make the same kinds of choices (they are all very different, which helps my teenage kids put things in perspective).

The bottom line, I believe, is that it is not a bad thing to talk with your kids about this kind of thing. The figures don't necessarily have to be exact. But, without some discussion of this, how do they learn? On the other hand, you have to have a pretty good level of trust with one another to be able to have that kind of discussion, which also takes some work on the part of the parents from the time the kids are young.

R

[Martha]

I knew all the details of my dad's finances from the time I was 11. My father trusted me and I became trustworthy.

[ScooterGuy]

... then they started to ask for more money. Just hints. Than an out-and-out demand for large bucks (6 figures).

When we refused the demand, I made it clear that all financial decisions were in the family trust, and that, with DW as co-trustee, any monetary decisions would be a "we' process ...

So, they disowned us, and I haven't been communicated with for over a couple of years, as of now. No contact with grandchildren, either. (I send birthday and Christmas presents, and they fall into a couple of Black Holes).

DW and I deduce a sense of frustrated entitlement fantasies being acted out, as a result of two decades of parental alienation by wife #1, with the grown children's active consent.

Sigh!

[Martha]

I am sorry ScooterGuy. That sucks.

[Bestwifeever]

My mid-20s kids do share what they earn with us, with each other, and with whoever wants to know, including their friends. I do agree this is probably much healthier than keeping it a secret (but I don't remember anyone EVER sharing that info with their friends in our generation). Maybe the younger generation are so open about it and sharing the info because they are all moving from job to job (instead of the lifetime with one employer) and they use the info for negotiating salaries.

I don't think my parents would have shared financial info with us four kids anyway but we were on the poor side and there probably wasn't much info to share....

[CuppaJoe]

Quote:

Originally Posted by ScooterGuy ....I haven't been communicated with for over a couple of years, as of now. No contact with grandchildren, either. (I send birthday and Christmas presents, and they fall into a couple of Black Holes). DW and I deduce a sense of frustrated entitlement fantasies being acted out, as a result of two decades of parental alienation by wife #1, with the grown children's active consent. Sigh!

This is so unfair, ScooterGuy. I guess it happens in many families. I had three cousins I never saw again after their parents' divorce. Just wrote a painful letter to one of them who was probably too young to remember me. His sister just died at age 52, he lost his other brother 5 years ago at age 50. His step-mom wrote to say he was the only one left; I have no idea what happened to his mom, if the step-mom merely never mentions her or if she, too, is gone. Had to re-word the letter to remove, "say hello to your mom," because people I feel comfortable asking don't know either.

[firewhen]

Our children are still young, but we have only spoken in generalities: Daddy went to school for years, worked hard and saved money. We do not need to worry about financial problems, can do some nice things, and can retire early. Here are some of the downsides I see to telling more:

-wanting us to spend more since we have it
-seeing us as fall backs and a disincentive to trying harder in life
-talking about us to other relatives/friends

As the children grow into adulthood we will certainly let them know that we are self-sufficient and that they do not need to worry about our old age. I would also like to impress on them that they too can also be like us if they LBYM, and here is how. Perhaps we will get more specific in a few decades, but it would be at a very slow pace.

[dandetour]

In my most humble opinion to this very pertinent to me thread. firewhen above
has it figured out as best as I can figure it out. Let the kid(s) know that within
reason (in-state) college help is cyphered for, and if I get laid-off or retired next
week, we will still eat. And let them know they can/should do better. That is all
that kids need to know.
Dan

[kcowan]

Quote:

Originally Posted by ScooterGuy DW and I deduce a sense of frustrated entitlement fantasies being acted out, as a result of two decades of parental alienation by wife #1, with the grown children's active consent. Sigh!

I had to work really hard to maintain communications with both my sons after our failed marriage. Current DW was amazed at how often I turned yet another cheek. But it worked out in the end and she admits now (with great admiration) that I did the right thing.

But these situations are a test of our wills and ironically, they also test the values we have instilled in the offspring.

[bbbamI]

My parents were very poor, so money was only discussed in terms of the value of a dollar. I realize now that they did not want to worry me...that I would grow up soon enough and have to deal with such issues.

I do not have children, but if I did, I would discuss money issues with them. I would start at an early age, teaching the value of a dollar. I believe when they reached their teen years, I would discuss the fundamentals of money. Such as saving, investments and goals. I would explain the family budget because if they know the facts, they would be able to understand how and why decisions are made.

I hate to think of a child growing up too quickly, but I believe knowledge will benefit them in the long run. I think if my parents had shared more with me, I would have been better prepared.