Teaching Friends of Children about Money

When my son was growing up, he socialized with kids from familiies with more "things" and with less "things" than we provided my son. I always tried very hard to point out to him that "things" were not the way to measure his friends and that to judge them by how loyal and trustworthy they were to him. I also pointed out that how many things we gave him was not the way to judge us as parents either. I think he learned that people choose to spend their money in different ways and having a lot of "things" wasn't an indicator of wealth. It seems to have worked although my son doesn't always spend his money the same way I would have. But he always has a plan and does not spend irresponsibly so I can't complain.
 
Culture said:
You know, you are probably correct that LBYM types are just as willing to discuss finical issues, but I think that type of information that the two groups want to talk about are very different.
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Well yeah.... We LBYMers need lots and lots of consensual validation that we're doing the right thing, lots and lots of ego building and a generous dallop of recognition. It's tough having your wealth hoarded in the bank where people can't see it instead of in conspicuous possessions.

I think what's really bothering you is the fact that your son's friend can't see your money in the bank and it's socially unexceptable to tell him about it but your son can see the toys and goodies at his friends house. Let it go...... It's OK. You're doing well and your son and his friend will learn more from your silence on the subject than any plan you create to "educate" your son's friend.

It's gona be OK Culture. You're rich, you're wonderful and everyone here knows it. Don't sweat the social unacceptability of telling your son's friend all about it! ;)
 
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Bestwifeever said:
I'm going to bet your son and his friend have discussed their families' financial status with each other ("my dad says we're rich," "hey, my dad says we're rich too!" "cool!"). So his friend probably does wonder why you don't act as rich as his parents do....
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Good point. We did not discuss our financial information with my son until last year. At that time we shared enough that he knows the important parts, i.e. generally what we make and generally what we are worth. I worry we shared too much, and you might be correct that he has shared it with others. However, we would not have given him the information if we did not think he could keep a secret.
 
youbet said:
Well yeah.... We LBYMers need lots and lots of consensual validation that we're doing the right thing, lots and lots of ego building and a generous dallop of recognition. It's tough having your wealth hoarded in the bank where people can't see it instead of in conspicuous possessions.
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Seriously, you are probably correct that LBYMers need validation from somewhere such as this board. Society validates those who spend everything constantly all day long. Even our president has indicated that spending is our patriotic duty. Those of us who save are given the message that something is wrong with us. It is a little uncomfortable.
 
youbet said:
It sounds like that from the outside you and your family appear to be "spenders" brewer. Is that what you'll need to explain....... that even though you appear as spenders you're actually LBYMers?
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Its a little more complicated than that. We specifically chose not to be in a more upscale neighborhood, preferring to remain in a "normal" middle class area. It fits us better and takes a lot of conspicuous consumption pressure off us and (eventually) the kids. DW's recent experiences with some county park system classes in the nearby expensive areas affirm our choice. We appreciate being in a "normal" neighborhood even though we easily outstrip all our neighbors except one in terms of earnings, and I suspect we are in the top 5 in net worth.

The recent purchases don't entirely fit our surroundings, although they were well within our budget. I don't want the kids to end up in a competitive consumpion race and I also prefer to continue living what passes for "normal life" in the burbs where we are.
 
I am not sure you can do anything about it without laying out your bank and brokerage account statements. He will not believe it due to your lifestyle. It will sound too much like sour grapes.
I have found that trying to make a 'horse' drink is a futile effort.
You intentions are good, but you can't tell others how to live their lives without causing some alienation.
Good luck to you. Let us know what you decide and how it comes out.
 
I would personally refrain from lecturing the kid about finances. After all his parents might have a hard time understanding why you, a person seemingly less successful than they are, have the nerves to lecture their kid about how to handle money. They probably think of themselves as successful professionals who are doing well financially (they make a lot of money after all!). They probably would not take it kindly if you proceeded to tell their kid that the way they handle money is wrong!
 
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Culture said:
Good point. We did not discuss our financial information with my son until last year. At that time we shared enough that he knows the important parts, i.e. generally what we make and generally what we are worth. I worry we shared too much, and you might be correct that he has shared it with others. However, we would not have given him the information if we did not think he could keep a secret.
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I'm sure your son is being discreet, Culture--he sounds like a great kid.

To this day I have no idea what my late parents' income was. My kids did not know ours until they were in college (although son had a good idea as he revealed). Money like s*x just not discussed on a personal level :) .
 
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I say talk to him or at least throw him some hints about being frugal because if you don't who will. Even if you fail at least you will have tried. I don't think you telling him that not everyone spends a large percent of thier income would cause a rift between the two boys. You remembered what your friend's father told you many years ago.
 
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i inherited from mom generational wealth of information passed down from her parents.

for as far back as i can remember, i've always known where my money goes. i never just spent frivolously. what i didn't know until just a few weeks ago was that this was a lesson passed down from my grandparents to mom to me.

when i was a kid, before i got my allowance or any extra money during the week, mom never let go of a dollar before i could account for every previous dollar i spent. "what happened to the money i gave you last week?" i used to have to write up a list of everything i spent each dollar on. (obviously training for my future creative writing.)

it never came across to me as a lesson. it was simply the way we lived. and i never even considered it until recently when an old friend of mom's was remembering mom. she used to think my mom was a bit of a jap simply because she came from a family that lived better than most of their friends. it wasn't until later in life that mom's friend realized that my mom was not at all a jap and that, in fact, even though her family lived well, they were actually tighter with money with mom than her poorer friends' parents were with their kids.

mom's friend told me that mom used to have to account to her parents for every penny she spent. i was stunned when my friend told me this because this was just how mom raised me. not that we ever discussed it. not that it was overtly a lesson in life. it was simply the way we lived.

sometimes people learn best when we don't teach. sometimes we teach best while just living our lives.
 
Seems like there must be a way to talk about some of the general principles with your son's friend without sharing any specific numbers or disparaging his family.

"It's too bad you guys can't afford a lake house. It would be really fun to be able to have you next door during the summer."

"We would have plenty of money to buy a lake house if we wanted to. But I want to quit working in a couple of years, and that takes a lot more money than buying a lake house."

or

"Lake houses just aren't very important to us. We'd rather spend our money on traveling around the world/having a longer retirement/a down payment on Jimmy Jr.'s first house."

You can emphasizing saving towards a goal; don't have to tell him that you've already achieved that goal if you don't want to.

Using the right wording and tone, this doesn't have to imply that lake houses are a less worthy goal, simply that you've chosen different goals than his parents have. He can make the leap to realizing that toys and lake houses aren't as attractive as the other goals himself.

And if he really is like an adopted son to you, you might consider sharing more with him than you would with most friends/acquaintances.
 
Culture said:
We did not discuss our financial information with my son until last year. At that time we shared enough that he knows the important parts, i.e. generally what we make and generally what we are worth. I worry we shared too much.
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I think you probably did. There's no obvious reason for sharing such details with "a young teenager".
 
aworkingrachel said:
Using the right wording and tone, this doesn't have to imply that lake houses are a less worthy goal, simply that you've chosen different goals than his parents have. He can make the leap to realizing that toys and lake houses aren't as attractive as the other goals himself.
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This is more-or-less what I do. I try to make him understand that there are choices other than spending.
 
Milton said:
I think you probably did. There's no obvious reason for sharing such details with "a young teenager".
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One thing we have been guilty of is treating our child more like an adult than would typically be considered normal by giving him opportunities and information earlier than most parents. We realize this can backfire and is not without hazard, but so far it seems to be working well, and he is remarkably mature for his age and has made only good choices to our knowledge.

The reason for given financial information was that he asked about it, and we felt he was old enough to understand why this type of information is generally kept confidential. If we did not tell him, we felt it would send the message that 1) we did not trust him (which would be the correct message to receive) and 2) our spending was driven by lack of "wealth" and not by choice. This also opened up the opportunity to talk about investing, spending, building dynastic wealth and capitalism. By the comments he makes, I think he has kept things confidential. My wife and I decided that if he told anyone this information, they would just believe it was typical teen exaggeration so we had nothing to loose.

I guess the real question would be, at what point is it appropriate to tell kids 1) how much you earn and 2) your net worth? A know a lot of people thing the answer is never.
 
aworkingrachel said:
Seems like there must be a way to talk about some of the general principles with your son's friend without sharing any specific numbers or disparaging his family.

"It's too bad you guys can't afford a lake house. It would be really fun to be able to have you next door during the summer."

"We would have plenty of money to buy a lake house if we wanted to. But I want to quit working in a couple of years, and that takes a lot more money than buying a lake house."

or

"Lake houses just aren't very important to us. We'd rather spend our money on traveling around the world/having a longer retirement/a down payment on Jimmy Jr.'s first house."

You can emphasizing saving towards a goal; don't have to tell him that you've already achieved that goal if you don't want to.

Using the right wording and tone, this doesn't have to imply that lake houses are a less worthy goal, simply that you've chosen different goals than his parents have. He can make the leap to realizing that toys and lake houses aren't as attractive as the other goals himself.

And if he really is like an adopted son to you, you might consider sharing more with him than you would with most friends/acquaintances.
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A reasonable idea, but I wouldn't get into specifics. Something more along the lines of "We have decided to invest our money in something other than a lake house."

It opens the door to the word "invest", and talks about choices (make sure you present it as a personal choice, and in now way degrade his parents' choices). If the kid takes the bait, it can lead to an informative conversation, though I wouldn't push it too far. I also wouldn't get into more details about myself, but maybe you can relate it to him. "Let's say you have xx dollars and want <whatever> but long term you really want <maybe something bigger and more practical>. You could buy <whatever> now, but maybe what you really want to do is save up for <that other thing>, which you might never be able to get if you buy things like <whatever> all the time."

If he doesn't ask anything, don't offer. At least he has an answer, and maybe someday it will hit him.
 
Culture said:
This is more-or-less what I do. I try to make him understand that there are choices other than spending.
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I missed that response. I don't know if there's much more you really can and should do.
 
Culture said:
The reason for given financial information was that he asked about it, and we felt he was old enough to understand why this type of information is generally kept confidential.... This also opened up the opportunity to talk about investing, spending, building dynastic wealth and capitalism. By the comments he makes, I think he has kept things confidential. My wife and I decided that if he told anyone this information, they would just believe it was typical teen exaggeration, so we had nothing to lose.
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Fair enough!
 
Culture said:
I guess the real question would be, at what point is it appropriate to tell kids 1) how much you earn and 2) your net worth? A know a lot of people thing the answer is never.
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I am 34 and I still have no idea what my dad makes. As far as his net worth goes I have an idea of the value of his real estate assets (RE is hard to hide and pretty easy to value), but when it comes to liquid investments until recently I had no idea. While visiting my parents last Xmas however, I used my dad's computer to check my email and he had left Quicken open on the desktop so I kinda know but I am not supposed to and I still pretend like I don't know a thing. So for my dad it looks like my sister and I are still not to be trusted with such private information!
 
I guess the real question would be, at what point is it appropriate to tell kids 1) how much you earn and 2) your net worth? A know a lot of people thing the answer is never.

----

When I was a teenager, this is what I knew about my parents' finances - they were saving for early retirement; the house was paid off; cars were paid for in cash; credit cards were basically evil and you shouldn't ever charge more than you could pay off. My dad told me what he made in a conversation we had when I first started working after college and he was making sure I was contributing the max to my 401(k) account right away. This was after he retired. At 39, I still don't know their net worth, but I have an idea based on conversations we have had over the years: I know they won't run out of money, but they are not "rich", and I know that they have more money now than when they retired. They won't need to look to us "kids" for help, and that's all I really need to know about.
 
HFWR said:
When I was a teen, I didn't listen to anyone... :duh:
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Hey, Culture, at least you're getting these questions from the high school kids and not from the high school teachers who are on the field trips you're chaperoning. I feel a bit weird when I'm teaching our kid's guidance counselor about saving for retirement, and now her chemistry teacher has started with the "What do you do all day?" questions.

What you're doing is going to work out OK. This kid may not be interested in learning from you right now and maybe not ever, but someday he'll recall his experiences with you and that will guide him in the right direction.

In the meantime you can assuage your conscience by handing out copies of "The Motley Fool Investment Guide for Teens". It has good advice (unlike the Fools' relentless merchandising of themselves on their website) and it's written with just the right amount of immortal teen attitude. Our 15-year-old has tremendously enjoyed it.

Another perennial teen favorite, although getting a bit old, is Marshall Brain's "A Teenager's Guide to the Real World".
 
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