6/28/2013 2:00 PM ET|
One way money is a lot like sex
Your family’s wealth may seem like a taboo subject, but it’s best to speak early and often to your children about financial values.
My husband and I are fairly private about our finances, so I was a little unnerved to discover that what we earn, and our family's wealth in general, is a hot topic on the playground.
It's not just us. Our 10-year-old daughter informed me that she and her friends -- who come from middle- and upper-middle-class homes -- regularly discuss how rich their families are.
Of course, they're measuring wealth in terms of who's got the latest game console and who gets to go to Hawaii or the Wizarding World of Harry Potter this year ("Lucky!" being the universal expression of envy to such revelations).
Parents often bobble questions about money -- from "Are we rich?" to "Why don't we have what they have?" -- because we're leery of revealing too much, or just not comfortable discussing these topics.
"Money is a taboo subject, kind of like sex," said psychologist Gary Buffone, author of "Choking on the Silver Spoon: Keeping Your Kids Happy, Wealthy and Wise in a Land of Plenty." "Parents tend to evade the questions or give vague answers that don't give much information."
But we should get comfortable with the subject. These questions are a great entrée into important discussions we should have with our kids about money, according to therapists and financial literacy experts.
Handled right, we can turn these inquiries into a broader discussion of our family values, our financial choices and what we expect from our kids when it comes to money.
Here are some suggestions for the next time your kid wants to talk about money:
Find out what they're really asking. Financial literacy expert Susan Beacham made a rookie mistake when her firstborn daughter, then 6, asked about sex. Beacham gamely launched into a discussion of the mechanics, only to have her somewhat horrified daughter explain that she was asking because a friend had said he was a different sex than she was. She wanted to know what the word meant.
"We really don't know what's going on until our kids tell us," said Beacham, who designed the segmented Money Savvy Pig bank and the Savings Spree iPhone app, which both help children learn about budgeting and saving. "What's in their heads is not what's in our heads."
A question about income or wealth could stem from curiosity about how your family stacks up against others, or your child could simply want reassurance that you have enough. Maybe she's getting teased at school about some gadget she doesn't have, or perhaps a friend's parent has suffered a job loss and your child is worried that could happen in your family.
"Step back and don't just respond immediately to what you think they're asking," Buffone said. "It can be a question with a lot of variations."
A gentle, "Why are you asking about that?" can give you more information to help frame your response.
Tell the truth (within limits). You don't have to hand over your W-2s or disclose your net worth -- and you probably shouldn't, said psychotherapist Thayer Willis, author of "Beyond Gold: True Wealth for Inheritors." That's too much information for most kids, who wouldn't be able to put it into context and might broadcast details you'd rather keep private.
But if the question is about wealth, you can explain that you have more than most people in the world, since even the poorest American family is typically better off than most people on the planet. You can talk about how your family is able to buy what it needs and some or much of what it wants. If your income or wealth happen to be above average, you can talk about what you did to get there (a good education, hard work, consistent savings).
If you're asked why you don't have a 70-inch television, a powerboat or some other toy another family owns, you can explain that you choose to spend your money in different ways.
Expand the conversation beyond spending. Here's a great chance to talk about choices and values. Maybe instead of buying video game consoles, you're saving for your kid's college education or you're donating to the local food bank. Perhaps you've made financial mistakes in the past and are trying to get your family back on track. Match your response to what you think your child can absorb, but make the point that money is for more than spending -- that every family makes decisions about how much to save and how much to share. Talk about the other forms of wealth your family enjoys, such as good health, close relationships and leisure time.
Talk about what's expected. The "Are we rich?" question can have a subtext with older children, especially teenagers, and that's, "How much help will I be getting in life?" Will their college education be paid for or are they expected to contribute? Will you be able to help with future expenses, such as a wedding or a down payment, or will they be on their own? Talk about what they can expect, and what you expect of them.
Even if your family is very well off, Willis said, you'll probably want to make it clear that you won't be paying the bills forever.
Willis likes to quote a colleague, who suggests telling children of wealth that they're getting a great "starter kit" for life.
"You tell them they're getting a great education, money to get started buying a home or to start a business," Willis said. "But they're not going to get so much that they'll never have to work. . . . They're expected to make their own mark in the world."
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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No you tell the kids, "are WE rich? No your mother and I are rich. For WE to be rich you need to get a job, make a lot of money and then WE would be rich."
I thought the answer was going to be that you have to work like hell for both.
I thought our money was going to get you an education and a good job so you could help support us when we retired...
But, after 20-years of living in our basement and eating at our table, you are out of here.
My parents were very direct about what assistance I would receive. They would help out as much as they could with college, and I was expected to work and make up the difference. After that, graduate school, marriage, whatever, I was on my own. There were three kids after me in line looking for help. My parents followed through on what they said they would give me. There were no apologies for not providing more, and none were expected at my end. Anything one gets after one's 18th birthday is a gift. And should be viewed that way. That is the way I was raised, and that is the way I'm laying it out for my own kids.
There seems to be an unspoken assumption in this article that parents owe their progeny an explanation about their finances. Maybe I'm reading something into it that isn't there. However, assuming I'm correct, I find this odd. I think it is a good idea to let children know what may be available for them in terms of help in the future. Assuming plans made come to fruition. But I'm not opening my books to my children, so to speak. Forget it. It's none of their business what I have or don't have.
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