Talking to your kids about money

[RoseFI]

IMO this is one of the best articles I've ever read about kids and money. Brilliant advice, great examples.
http://nyti.ms/1v9ssm8
The only part I balked at was the advice to rich parents who don't work, to explain "it requires a great deal of money to throw off whatever dividends and interest contribute to the family budget, and that the investments that do so may not last or may not fall to the next generation if the children don’t make something of themselves in college and beyond." (emphasis mine - bad language about human worth, and would sound hypocritical coming from parents who aren't working themselves. But the trend of inherited wealth dissipation over generations is a really important one to raise with kids, imo.)

I was one of the "none of your business kids" -- and so I've studied/worked with money ever since. So there mom!

What does it bring up for you, as a parent? I'm sure a lot of people here do similar things to what they mention here -- do you? What else do you do to work with your kids around money?

[razz]

When my two girls were around 10-13 years of age, I put them on a budget which they were in charge of with the exception of winter coats and boots. I showed them my income and expenses in detail and told them that their dad paid the mortgage, car payments, insurance and taxes. They learned a lot, made some poor choices from which I did not rescue them so they really understood. That said, they still got led astray with credit cards at first when they attended post-secondary school but in the 40's now are very much in control of their budgeting and spending.

It takes time and experience to make such informed one's decisions one's own.

[Lainey]

I also liked this article. I had a working-class upbringing where my mother was in charge of my Dad's paycheck which she managed to (barely) stretch to fit a household of 8. But unfortunately she would express her worries in front of us as very little kids which I think gave us anxiety about a money situation that we could not actually do anything about. I remember as a young girl worrying about the water bill, for example. Geez.

So in raising my now grown son I had to tread the line between making him understand he could not have everything he wanted but knowing that I had emergency funds and I would always be able to take care of him. Kids have enough to deal with growing up, so if teaching about money can be as matter-of-fact as possible, I think that's a positive.

[Gardenarian]

I like the part about bringing home the bag of cash and showing where it all goes.

I enjoy giving my dd the things I went without, and while I have tried to show her the realities of money, I have never wanted her to feel like she was a financial burden (as my parents did to me.)

I do think homeschoolers, who go to the bank, grocery, and often to work, with parents, have a slightly clearer idea of money - simply from exposure. For example, my dd would help me add up columns for the bills, and write out checks for me. (She started public school this week at 15yo.)

I need to read the article again and do more research on this. Thank you for posting!

[ctg492]

I wish I had done something anything to teach money to my sons. I will stand up and say I did nothing. At the time I did what I thought was correct. I was of the mind set of "they have their entire life for that so let them be kids". HIT me with the wet noodle please. I actually kept a bucket of change by the door. Not a small bucket but one that at the end of the year would have $800 in it. I figured they needed money. Dah......
I assumed they would learn by watching us. Ask me how this worked. One son grew up and budgets to the penny, one son took till he was 26 for the bad credit to catch up. He has worked through it and now lives way too frugal, cash only.
So summarizing; I did it all wrong, but would they have turned out different? Never know, but I don't think so.

[ApatheticNoMore]

I guess it might have been more useful if they had talked about work than money (though one might not always have good things to say about work ). Money at least sometimes you see your parents spending at the grocery store etc., work whether one or both parents work you never see it, it's the great big mystery, the complete unknown.

I never for once worried we wouldn't have enough and I'm glad, but there were always intense moral taboos against spending money, like the worst thing a kid could become was "spoiled! spoiled for life! spoiled rotten!" and the horrible dreadful process was always said to be underway whenever we got anything "those kids are getting spoiled" (not a lot of objective reasons for this "spoiled" accusation though), plus children were starving all over the world.

[rodeosweetheart]

I grew up hearing all about work AND money, so I felt I was well prepared. I talked a lot with my kids by necessity after I got divorced. They range in their money relationships; very different in the way the handle money.

My favorite money story was one I did not hear until the year. My mom lived through Depression and the family lost much of her dad's business, lost the membership in the country club, she couldn't join Girl Scouts because could not afford the uniform. The other day she mentioned, "I couldn't figure out why we could still swim at the club pool, and then I realized that nice Mr. Jones let us swim there because my dad supplied the greengrocery account for the resort."

That nice Mr. Jones was Bobby Jones, the golfer!

[catherine]

My favorite money story was one I did not hear until the year. My mom lived through Depression and the family lost much of her dad's business, lost the membership in the country club, she couldn't join Girl Scouts because could not afford the uniform. The other day she mentioned, "I couldn't figure out why we could still swim at the club pool, and then I realized that nice Mr. Jones let us swim there because my dad supplied the greengrocery account for the resort."

That nice Mr. Jones was Bobby Jones, the golfer!

Wow, great story indeed!

[bae]

... and that the investments that do so may not last or may not fall to the next generation if the children don’t make something of themselves in college and beyond." (emphasis mine - bad language about human worth, and would sound hypocritical coming from parents who aren't working themselves.

I suppose that all depends on what you mean by "working". Most of the extremely wealthy people I know who "don't work" are in fact working just as hard as anybody else, they just aren't working *for* anyone else but themselves. Community service work takes time and effort. Managing your estate takes time and effort. Etc.

My wife and I haven't "worked" since our mid-30s, but we both usually put in more hours "not working" than we used to put in hours for pay.

We've discussed this, and finances, and wealth management, and civic duty quite transparently with our daughter throughout her life.

We've made it quite clear to our daughter that she is not to sit around and wait to inherit - if indeed that is the course of action she chooses, there won't be anything *to* inherit....

We didn't go quite so far as a billionaire friend of ours did with his kids, where he set out an elaborate reward system based on attaining certain levels of accomplishment and entering certain fields, we thought that was overly-controlling.

See also:

http://carnegie.org/fileadmin/Media/..._WEALTH_01.pdf