How much do you share with kids about household finances?? - Mothering Forums
Frugality & Finances > How much do you share with kids about household finances??
Saiahma's Avatar Saiahma 10:18 PM 05-02-2004
I'm just curious about everyone's opinions. I'm a single mom to DS, I work full time (actually I'm on mandatory overtime about 8 months out of the year, so I guess more than full time...). DS is 6. I want to be honest with him about money, but I don't want to burden him with it, KWIM??? I was laughing at my friends daughter because she wanted something at the mall and her mom said no because she couldn't afford it, she insisted that she just go to the ATM, the girl is 10...I would think by that age you would have taught your child that money has to be earned, and doesn't just appear out of the ATM when you want it.

We're not poverty stricken, but being a single parent I'm not rolling in money. Some weeks (like this one) I have about $30 until next Tuesday. We live in a nice neighborhood, but we rent...I have 97 Honda that runs great, but has some body damage I cant afford to fix. DS is starting to notice that so and so has this nice SUV and has this big house. How much do you share with your kids?? I tell DS honestly if I don't have enough money for something, and I make sure if I promise him something I follow through. I don't want to make him worry though...SO what are your thoughts??

sagewinna's Avatar sagewinna 10:39 PM 05-02-2004
I am pretty open about finances... How else will kids learn about them?

My 10 year old has helped me balance the checkbook for several year, and we've gone over our budget together. Once he saw where the money goes, he better understood why we can't spend on eating out or impulse items all the time. I also explained to him the some things on the budget were fixed and necessary expenses (mortgage, electric) and some are more discretionary (food, entertainment).
Colorful~Mama's Avatar Colorful~Mama 10:58 PM 05-02-2004
also pretty open here. I was a single mama from the time dd was 3mos till she was just shy of 6. She knew what "we can't afford it" meant. She understood 'budget' and other key words. She understood by the time we met dh and she was 6 that i was paid for my job and that money was used to pay our bills and buy things and that when the money was gone it was gone. By the time she was 8 she understood that if we bought one thing we might not be able to buy another thing. At 12 she started babysitting and earning her own money. at 13 she was given a bank account for her birthday by her gramma (with our consent) and a bank atm card (not a debit, its for atm only) and she can use her money as she wishes. She has made mostly wise decisions. She adds to her bank account from babysitting jobs, birthday money etc.
Her last big expenditure was to pay for her participation on the church mission trip. She asked for donations from family and friends, dad and I gave a bit, and she paid for the rest from her money.
at almost 15 she has a full grasp on how quickly money goes - how not to spend her cash on junk etc. She buys all extras with her summer work money, dvd's and other things she wants. She knows I'll always give her cash when we have it if she needs it..and we do give her plenty lol, but if she wants to blow $20 at the mall? thats her cash, not mine. I buy her clothing every year and school supplies but if she wants a $50 backpack vs a $10one guess who has to come up with the cash? lol

hey. even my 3. 5 yo told her dad the other day "the shrek yogurt wasn't on sale, but we bought it as a treat so we didn't get as many yogurts this week.". She understands that sometimes if you buy something more expensive you have to choose to buy less of it, so instead of 10 yogurts she got 6. kwim?

i think it is important that kids understand money doesn't grow on trees
EFmom's Avatar EFmom 11:14 PM 05-02-2004
I try to teach my kids about money and financial responsibility. I agree though, that they should not be burdened about the family finances.

We discuss that some people have more money than others. My dd recently asked me why we couldn't buy one of the new mansions being built in a nearby development. I explained about some people having more money than others, some jobs paying less and some more, but that there can be tradeoffs. Dh is a teacher, so doesn't make a lot. But he gets to spend tons of time with the kids. DD readily admitted that she would rather have time w/ dh than a fancy new house and hardly ever see him.

I also used this example to talk about debt. Our mortgage is fairly modest, and we'd like to get it paid off. Sure, we could have afforded a bigger house, but we wouldn't own it for a long time.

What I don't want is for my kids to be worried about the family finances. It's good for them to know that we have to be careful and responsible with money, but I don't want them worried where our next meal is coming from.
jeca's Avatar jeca 12:40 AM 05-03-2004
I haven''t really gotten into details about money with my oldest yet. If he asks for something that I don't have the money for I usually just tell him I don't have the money and to wait until whenever if I'm going to get it for him. THat usually satisfies him. He's going into first grade this year so I think I will start teaching him about earnings and such then.
mamawanabe's Avatar mamawanabe 12:43 PM 05-03-2004
I can't remember not knowing how much my parents made or how much our rent was. I do remember being stressed once - 4th grade- about whether my Dad would get a job after graduate school (assistant prof positions were rare even in 1981), but otherwise, though we were always on the poor side, the money knowledge I had was more empowering than stressfull.

I also remember being a little stressed about money my parents owed to our ped and to my dad's parents (same time period). But, honestly, I attribute my debt-phobia (which I consider a good thing) to this childhood awareness of obligation.

So maybe a little stress is OK as long as it doesn't cross the line into feeling like life is not secure or into a feeling of responsibility to help in the family finances.
Momma Aimee's Avatar Momma Aimee 08:24 PM 05-04-2004
I don't know.

I vote nothing. but that might be right for you. Our kids will not know aboout the family $$$; we are the parent's; they don't need to worry.

I grew up not knowing anything about bills or $$ -- oh I knew you had to pay them on time and how to keep a check account and that Mom got paid for working adn that is how the bills got paid. But I never knew -- and still down't -- the house payment or mom's salary. I never knew when she got a raise. never thought about it. (she is high level nuseing admin at a hospital). I was the kid; I didn't need to know.

I learned to shop for good deals; and to look at prices -- compare the rent of 4 apartment I was looking at. But again that was a all realted to me; not to the family.

I was safe and secure and never worried. We had enough. sometimes when I asked for stuff I got it, uallly not, bu that wasn't money that was "learning to wait".

DH grew up poor. (I did not). He knew they were poor and knew why he could play little league or go to cub scouts. but again he didn't know how much rent was; or how little his mom (single mom of 5) had int he bank. He was the child; it wasnn't his responiblity.

I am a fair believer that a child can learn the value of money; to be responible and everything necessary without details about the family $$$ situation. I did; DH did.
mamaduck's Avatar mamaduck 08:49 PM 05-04-2004
My kids know there are certain luxuries we can't afford, but certainly some others that we *can* afford and enjoy. They know that certain things at the grocery store can only be purchased when there is a sale. They are aware that we postpone some purchases until we find a good price, and that we plan and budget for some purchases. They know that we have "wish lists" for "someday" and they have their wish lists too. They know that money is earned by working and deposited in the bank, and that there is a limit to how much we can retrieve for spending.

They do NOT need to know when we are feeling stressed/anxious about money. They do not need to know when things are "tight." I don't want them to be anxious about it. They are not privy to bill paying or budgeting disscussions between myself and DH.

I was homeschooled growing up and one of my "assignments" for several years between about age 10 and 12 was to pay the family bills and balance the family checkbook. I knew for a fact that there was never enough money to pay all the bills in full, or to stretch from one payday to the next. It was an incredibly stressful position to put me in at that age -- particularly as I was too young to work or contribute and I felt very powerless about the situation. I would dare to go as far as saying that "assignment" was mistreatment.
Britishmum's Avatar Britishmum 09:22 PM 05-04-2004
I think there is a difference between understanding the fact that budgets have to balance, and placing pressure on children to worry about parents' finances.

Even if I can afford somethng for dd, she doenst necessarily get it. She tells me about things that she would like, usually books. I tell her to write a list and that if and when I have enough money to spend on amazon for books, we will choose one or two to order. This satisfies her. I almost always say no to whims in shops, and my girls understand that I don't have quarters to put in machines for rides in malls etc. (well, I do have them, but I wont' spend them.) They often comment that something is cool but that we can't afford it. It's just a fact to them.

Dd does occasionally tell me to work harder though so I can earn more money and get her books ordered quicker. And she sits and does some writing 'work' too, to help out. I love it that she understands that it takes effort and discipline to earn money.
mirlee's Avatar mirlee 10:00 PM 05-04-2004
I don't think children should be burdened with the details, but I do feel that they need to know when money is a little tight and that just because so and so has the latest greatest toy, etc., doesn't meant that he would get it even if you had a million dollars.

My sister and I were just talking about this today. Our other sister is having a tough time and we are helping where we can. The problem is that her kids have no idea just how fragile their financial situation is. We think they really need to understand it.

Kids need to know some. Maybe not the gorey details of having to juggle one thing to pay another if that is the situation, but they need to have it explained in terms they can relate to.

We do tell our son when money is tight, and believe it or not, he actually gets it when I say that "x" isn't in this week's budget.
Suzannah's Avatar Suzannah 02:23 PM 05-05-2004
I grew up pretty poor, and definitely feeling (and seeing) the stress about money. I vote that no, children do not need to know about financial stresses. We don't have much money now, but we never say "We can't afford that," we just say "That's not in our budget." The latter is absolutely the truth and conveys, I think, an understanding of how you decide where your money should go. We also give DD an allowance ($1 a week, in quarters), and we are teaching her to count her money and save it for what she wants.

With regard to questions about why we don't live in a bigger house or drive nicer cars, we focus on the quality of what we own, how great it is that we have these things and how important it is to take care of and appreciate what you own (instead of treating cars and such as "disposable" and replacing them every two years). We also talk about other people and their situations, and we dream about what we'd like to do or places to go. Money has been a terrible problem for me my entire life (I declared bankruptcy when I was 21!!), but I'm trying to get better at it for my sake as well as my daughter's.
Piglet68's Avatar Piglet68 03:36 PM 05-05-2004
I have strong memories of being a young child and being told (in response to "why can't we have....X'") that we "couldn't afford it".

It made me feel really bad, like there was something wrong with us.

For example, we lived in a nice suburb growing up. On our street were a family with a pool. We had a huge lot of land, and I asked why we couldn't have a pool. They said "because we can't afford it", which immediately felt like that other family was somehow better than us.

Honestly, I wish they had just been a bit more honest. The fact is, having a pool is royal pain in the butt, and even if we could have afforded it, there's no way my Dad would have given up his extensive garden. I wish they had just put it that way.

We had older cars. When I asked if we could buy a new car, they said "we can't afford it". Instead, I wish they had said "why? our car is safe, it runs fine, it would be a waste to trade it in" and maybe throw in some comments about car culture, etc...

I think when children are older, maybe they can understand better. But I'm going to steer clear of the "we can't afford it" as much as possible, and offer other, just-as-plausible, explanations. Because there almost always IS another explanation.
Geofizz's Avatar Geofizz 04:06 PM 05-05-2004
There are many places where I can only hope to do as good a job raising my daughter as my parents did with me. Money is one of them.

Now that I have a sense of my parents' finances, I realize now that I had no sense how touchy my parents' finances were when I was younger or how easy things got for them when I was older. The entire time I was growing up, money was always discussed in terms of priorities. I only have vague recollections of things when I was very young, but my mom recently told me that the reason we ate beans and lentils all the time when I was in preschool (a distinct memory for me) was that was what they could afford. I just thought we were the weird family that didn't eat meat. Things got a bit easier for my family when I started 4th grade and my mom went back to work. However, little changed in how my parents lived. Regardless, "We can't afford it" was rarely used as an explanation, but instead my begging for a Cabbage Patch Doll or Guess jeans was turned into a discussion of how we spent money as a family and setting priorities. I was given the means to save my own money and was encouraged to use my own money for such desires. I distinctly remember being in 7th grade, and being the LAST one to get Guess jeans. The deal I made with my mom was this: she'd put up as much money as she would normally pay for a pair of jeans and she'd help me get to the outlet store where they were discounted. I made up the difference with money I earned by washing the windows. I only now realize that there was no way my parents could have afforded to buy me such expensive clothes on a regular basis.

When I was in high school, my mom got a job that more than doubled their take-home pay and included very valuable stock options. I knew my mom was happy with her new job and that she was earning more, but I had no sense that anything significant had changed. They didn't change how they lived at all. All discussions about non-essentials were as they were when I was younger.

When I was quite young, I think my parents kept money woes from myself and my sister as means to protect us and keep us from worrying about adult matters and let us be kids. When I was in high school, my parents didn't let on about family finances because they liked the way we were handling our own money and priorities and they didn't want to change that.

Anyways, teaching kids our priorities when handling money is important. I think they need to know that only by putting something into the bank account can you withdraw money from an ATM. I think it's important to teach our kids that there is more to making a purchasing decision than whether or not you can afford it. If this is how we are going to raise our children, however, it requires additional support and discussion. My mom had me take the bus to music lessons and soccer pracitices. I now know that she did this because she wanted to make sure that I knew how to use public transportation, not because there was no other way for me to get there. It was tough being called "Oliver Twist" by other kids (and their parents!) because poor me had to take the bus. In retrospect, I think I would have benefitted from my mom letting me in on her reasoning on this and related things than letting me try to stand up to cruel moms making fun of me without having much support.

All that being said, I hesitate to let a child know just how dire things are. It's hard enough being a kid, and I don't think that adding adult stress to their lives is necessary.
Momma Aimee's Avatar Momma Aimee 05:45 PM 05-05-2004
I agree with Moma Duck.

They need to have responiblity for money -- but that has nothing to do with how much mom has in the checking account.

Again -- my parent could afford most of what I asked for. doesn't mean I got it. My parents would ask why i wanted it; and if i had a good reason -- encourageing me to think WHY, no just cause Erika had it -- then it went in the "we'll see" group. I was encouraged to make lists so when my Aunt or grandma asked mom and dad could share things I wanted. Sometimes I got told "you don't need that" (and they were right) but never that it was too much money.

I feel the main focus of childhood should be safty. If our kids know too much we are making them little adults, not kids. something are a parent's responiblity.

setting priorities is a good thing to teach. Like my folks asking why i wanted something. Haveing their own money to learn with is good to.

But I'd never let our kids know about the family $$$. That is for me and DH to worry about.

A child might worry even if there is enough; if they know too much. They might worry dad will loose his job -- or hear ont he news that heating bills are going up. kids can't grasp the biggness of the family $$ situation and shouldn't have to.

I plan to focus on the blessing we have -- or will have -- with my kids. My 4 year old nephew is learning that he is blessed with a SAHM but not every toy in the sotre. It is all choices, priorities and looking at our blessings.

mamawanabe's Avatar mamawanabe 06:55 PM 05-05-2004
If your child asks you how much money you make or how much teh rent/morgage is a month etc, will you tell or evade?
Momma Aimee's Avatar Momma Aimee 07:14 PM 05-05-2004
most likely evade.

"momma and daddy pay the house payment -- that is our job. don't worry we will always take care of you".

"We are blessed that daddy makes enough money for momma to stay home with you and to meet all our needs. we should be grateful for this"

honestl;y I still don't know how much my mom makes. enough. that was all i ever need to know.

Maybe -- when they get older a discussion of how much the cable bill is vs how that money might otherwise be spent would happen; but not till 13 or older I'd say. "say we can take the money we spend on movies channels that we don't want, and each buy 3 books a month..."

Or maybe something like (to a 15 year old) you can go to one camp this summer and you need to shose which one; or you can go to two less expensive camps or one that cost more; again you need to help us choose. but not till thay are older 14, 15 and can grasp budgets and money.

I worry that if you tell a little kid "we don't hae money for that (toy)" they are going to wory you might not have money for food.

Now if they want something totally out of limits -- a convertable when they are 16; then sure "not in this family; that is not how we choose to spend our money. We choose to spend our money...."

I grew up with a lot of anxity and I worried about money cause I heard about the ression on the news back int he 80's when I was little. Depression and Anxiety run in our family -- I want to protect our kids as much as possible. I was anxious without knwoing about the $$; I see no reason to risk it.
EFmom's Avatar EFmom 10:50 PM 05-05-2004
I would tell the child that how much money mommy makes is private. I would not tell her my salary or dh's salary. I never knew how much money my father makes--it was none of my business. I probably also wouldn't tell her about the mortgage payment.

My kids were adopted. We don't know why they were relinquished for adoption, so we tell them about the wide variety of reasons why birthparents cannot parent, poverty being one of them. The last thing we need is for our kids to be worried that we wouldn't be able to take care of them due to finances.

However, my response about what to tell kids wouldn't be different if my kids were my biological children. I just think the nitty gritty of family finances are for the adults to handle. There isn't much the kids could do about them anyway, other than worry, so why dump it on them? You can teach them financial responsibility without it.
sagewinna's Avatar sagewinna 12:50 AM 05-06-2004
I guess I don't understand why showing a kid the household budget can give them too much to worry about. Kids might even worry about poverty if they have no clue as to how finances work!

We have income, we have outgo, it balances... The kids don't see our tax forms (Of course, I would probably show them if asked..) and don't know how much we make exactly, and we are not struggling right now. You know what, though? My DH DID get laid off for 9 months last year, and the kids knew that things were tighter because we told them. I think being honest and open to dialogue is much better than whatever they might overhear or imagine. We talked about how we planned to pay our bills (unemployment, savings, family help, etc) and what could happen if we couldn't make the house payment (we have 2 sets of parents who would never let us be homeless) because my oldest wanted to know. We kept it age appropriate and talked a lot about how we'd be ok and together... Those are the things that mattered most to them.

My parents shared nothing at all with us about finances, and I feel I would have been more prepared for handling my own if I had had an example modeled for me.

Money can be such an emotional thing for people... I just don't get very anxious about it anymore (I've been pretty down and out when I was a single mom) so I don't worry about passing that vibe on. I am sure our own experience with money causing stress can color how much you feel comfortable sharing with kids.
mamawanabe's Avatar mamawanabe 01:18 AM 05-06-2004
Saiahma - yes, I agree, it must depend some on the way you feel about money (anxious or not), which probably depends on your childhood experiences and on personality. I had really good experiences growing up with complete knowledge of my parents finaces (their income, house rent, debt to ped etc). I always felt safe, probably because my parents were never worried about our lack of money or stressed about doing without (they were laid back hippie types and so never cared too much that they had to borrow money from grandparents for groceries and had to live in a house without indoor plumbing because it was all we could afford when my dad was in school). It they were anxious, sharing their precarious finaces might not have been the best strategy becuase then we would have become anxious too. But since they weren't worried, it was only neutral information. Same as any other question/topic. Make sense?

I amazes me how we can all come up with such different answers to these kinds of questions and how our answers depends so much on what we felt right and wrong with our own childhoods.
Foobar's Avatar Foobar 01:19 PM 05-06-2004
Ok- Goo is ONLY 21 months, but she already understands the basics of money.

She knows I go to the bank to get money out of the money wall (ATM). She knows that mommy and daddy go to work and this puts the money IN the money wall. She knows that a tool booth means we pay money. She knows that if we want to take something home from the store, we have to trade money for the thing we want.

As she gets older, I expect that we will share more and more about the household finances. I think it is fair for her to understand our decision making. I don't think I would use "we can't afford it" as a reason not to buy something. I might use "I think that it is too expensive for what you are buying. What else could we use that money for?" to help her learn how do decide on purchases.

If she asks how much we make, I think I would tell her that I am not comfortable giving out that information. I would assure her that we have enough. As she gets into her teens, we might share it, but we would also share how we budget things and how we make decisions on what to purchase...

My parents made me feel like we were dirt poor and we weren't. I want my children to understand that money is a tool, but it is not something that makes you happy like the TV says. I want my children to understand how to work with credit and cash and how to save and invest....I wish someone had told me.....
Geofizz's Avatar Geofizz 01:59 PM 05-06-2004
Originally Posted by Foobar
Ok- Goo is ONLY 21 months, but she already understands the basics of money.

She knows I go to the bank to get money out of the money wall (ATM). She knows that mommy and daddy go to work and this puts the money IN the money wall. She knows that a tool booth means we pay money. She knows that if we want to take something home from the store, we have to trade money for the thing we want.
Ok, that's cute! My daughter (just a tad younger) pretty much just understands that mommy gets a bit upset if she takes the cash out of my wallet and stuffs it under the desk!

Seriously, all good points here. I think that it may be something to take on a case by case basis depending on how you feel about money yourself and how anxious your child may or may not be about knowing if there is "enough."
slightly crunchy's Avatar slightly crunchy 01:43 AM 05-07-2004
My son is only 2, so this hasn't come up for us yet, but I am thinking about it.

I think children should be free from worry about the financial state of the family. That is why the child has parents, to deal with that stuff and to care for them. The child ideally should not have to think about these things.

I do think it is important to teach financial responsibility, but in a positive way that does not make the child feel bad or guilty. Kids who are poor, will know it, they do not need mom and dad to talk about how we can't afford this or that. At a certain point growing up, it was obvious to me that we didn't have money. We certainly were provided for, but I wore all hand-me-downs from friends, got free lunch at school, sometimes got new shoes for a birthday gift, etc. I never knew how much my dad made, or how much the bills were, or the car cost, but by example my parents instilled in me the importance of paying bills on time, paying credit card in full every month. My dad worked an extra menial job at night at different times, in addition to his fulltime day job, to make ends meet and have a few little extras. My mom clipped coupons and did rebates and we went grocery shopping with her at different stores and comparison shopped when we needed to buy things. I always had one extracurricular activity, but I was aware that my mom got a discount because she had explained to the teachers that she couldn't afford the full tuition. I think these things were more important than knowing specifics about the family's financial situation.

When I was in high school, the family's financial situation was much better. My parents did pay for my college but I suffered a lot of guilt trips from my dad about this. This is something I do not wish for my own child.

The hard thing for DH and I will be that we will probably be able to afford most things that ds asks for. He will probably also attend schools where most children are from affluent families. Saying that "it is not in our budget" may not really fly. I really don't want him to grow up having everything handed to him without understanding the value. Because of our upbringings, DH and I are pretty frugal with our money, so that will help. I am glad that ds will have to suffer the pain of being a "have not" in our society like I did, but I also want to find ways to help him learn to appreciate the worth of a dollar.

If my child someday asks how much our income is or how much our mortgage is, I will say that that is not something that he needs to know. Once he is a teenager, maybe that type of knowledge would be more useful in teaching something about finances; until then, he doesn't need to know those things.
Suzannah's Avatar Suzannah 11:17 AM 05-07-2004
I think you can still say that it's not in your budget, even if you have the money. Just because you have money doesn't mean that you don't have to have a plan about where it goes and what you spend it on, and that is what a budget is, KWIM?

Kids should not get everything they want, period. I have taught in public schools and in private schools, and kids who did receive all of their desires were less motivated all the way around (and less understanding of other children about pretty much everything) than those kids who needed to save their allowance OR who came from families with a lot of money but still had parents who insisted on having their children work for some things. There is this serious sense of entitlement (brought up also by a previous poster), and I think in some ways it is more difficult to raise a financially responsible child when you have a lot of money (although I would not shrink from that challenge!!!).
Violeta's Avatar Violeta 04:07 PM 05-07-2004
hmmm. this kind of a hard question to answer and i have younger children so i don't know what to tell a 10 year old...i know though from growing up relatively poor, i still have anxiety over money parents had to borrow money from me to pay bills and buy groceries while i was a teenager..though they always paid me back..i think that it has caused me alot of problems with money, not having enough, you know stuff like that..but i do think kids should be taught how to save and spend money and of course keeping a check book and all of that stuff...
DebraBaker's Avatar DebraBaker 04:10 PM 05-07-2004
What Suzannah said.

We have been very poor at times in the past. I tried to keep the stress away from the children but there was no way to keep it from them.

Things are much better now and we're able to live well within our means.

I get sick of being teased about being frugal but it's sort of turned around and is a virtue whether you need to be frugal or not.

My children are all good workers, they know that if they really want something they must work and save the money for themselves.

I like the parent who paid the price for regular jeans and made the child work for the difference. That's my style.