Yes, communication is important, and children deserve the truth. But not the whole truth! Best-selling personal finance expert Beth Kobliner, author of Make Your Kid a Money Genius, outlines healthy boundaries for this touchy topic.
Don’t Tell Young Kids How Much You Earn.
Whether your family is more than comfortable or living check to check, salary is something to keep to yourself. Young kids don’t have the context to make sense of such sums—and in revealing numbers, you run the risk of becoming the talk of the playground (“My mommy makes this much!”). The same advice applies when it comes to which parent earns more. Children can confuse a bigger salary with a bigger contribution to the family.
Do Help Kids Understand That Not All Families Have the Same Amount.
Some kids reach this conclusion early on, when they see a difference between Jane’s bike/boots/bedroom and their own. When the time is right, you might want to talk to kids about the many American families living below the poverty line—about $20,000 for a three-person household—and how difficult that is.
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Don’t Gossip in Front of Your Kids About Other People’s Money Habits.
If you need to vent about greedy Uncle Boris or your sister’s too-big mortgage, do it quietly and far from your children’s receptive ears.
Do Share Examples of Sound Money Judgment.
That time your friends decided to forgo lavish Christmas presents to make a donation to the American Civil Liberties Union. The 529 college-savings plan a coworker started for her newborn. The money Gramps set aside in his 401(k). All good.
Don’t Tell Kids How Much You Pay the Sitter.
Nothing undermines the authority of a caregiver like putting a price on his or her services. You never want to hear the words, “Oh, yeah—my mom pays you x, so you have to do what I say!” Also, some little kids assume the sitter comes over just because she likes to hang out with them. Don’t ruin that!
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Do Ask Them to Guess the Price of Milk.
The grocery store can be a playful learning zone where kids gradually develop a sense of basic costs.
Don’t Tell Kids You Have No Money on You to Get Out of Buying Something.
A little lie may seem harmless, but if you end up swiping your card a few minutes later, your kid will wonder whether she can trust you.
Do Explain Why You Won’t Buy the Impulse Item She’s Requesting.
An answer as simple as “I don’t think we need to spend money on that right now” sends a signal that purchases call for thought and judgment. When you have backup (“The dentist said to stay away from sticky candy”), all the better.
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Don’t Tell Your Kid How Much You Worry About Paying for College.
Tweens and teens might read your (reasonable) anxiety as a message that higher education is a terrible burden.
Do Talk Calmly About College Costs, Early On.
When your child hits high school, bring up the subject. If you already know your financial parameters, share them. You might even want to explain if and how you expect your kid to participate financially; studies show that undergrads who contribute to tuition actually get better grades. If you can remain calm during these talks, your kid is more likely to be able to do the same.