Your child asks how much money you make. Is it appropriate to give a 10-year-old an honest answer? What about a 17-year-old?
It’s generally not a good idea to provide a dollar figure to a child who is 10 or under, experts say. For one thing, she may be indiscreet with the information. Additionally, it’s the rare fifth grader who “has the perspective to truly know the difference between $50,000 a year and $500,000 a year,” says Nicole Francis, a New York City–based certified financial planner. What she may really be requesting is reassurance that her future needs will be met (particularly if someone in her life has recently undergone financial hardship). Explain to her that she has nothing to worry about and that your family is comfortable enough to afford the necessities of life.
This approach also works with teens. But if you feel comfortable sharing more specific information with them, sometimes it helps to do so. A 17-year-old in particular may have real concerns about college and what your family can afford, says Brad Klontz, Psy.D., a certified financial planner and clinical psychologist based in Kauai, Hawaii, and a coauthor of Mind Over Money ($10, amazon.com). Either tell her your salary or give a range so she knows whether her ambitions match your budget.