Mom, how much money do we have?
Recently, my friend Jennifer was talking with her 7-year-old son, Jackson, about his allowance. She was introducing the spend-some, save-some, donate-some system, and he was excited about this step toward being a more responsible big kid.
Jennifer said the conversation was breezy yet earnest as they talked about what he liked to use his spending money on, what he might save for and what charity he might donate to.
She felt like a great parent. Then he asked how much money she made a week. And she told him.
Their positive discussion came to a halt. First Jackson was bewildered, then angry.
How could she make so much money and he make so little? Why is life so unfair?
As a freelance writer, I know just how Jackson feels. But I digress.
I was impressed that Jennifer fessed up the number. Not many parents would.
Unnecessarily secretive parents
Interestingly, it seems that affluent parents in particular tend to avoid telling their children facts about their finances.
At least, those are the findings from a recent survey of affluent families conducted by Spectrem Millionaire Corner, which showed that just 17 percent of respondents said that they have or will share their income or net worth with their children by the time they’re 18.
New York Times money columnist Ron Lieber, who was given the opportunity to add questions to Spectrem’s survey, wrote about the findings this past June.
And the reasons that parents gave for not sharing the information were particularly interesting — 32 percent said simply, “It’s none of their business.” Thirteen percent said they were worried how the information might affect their kids’ behavior (presumably they worried that kids would act spoiled or entitled), and another 9 percent said they worried about kids sharing family financial information with others.
Of course affluent families may have more complicated financial lives than those of us with a lower net worth or income, but these reasons for not being open about finances are, according to Lieber, counter-productive — and I think this line of reasoning holds true across income lines.
Why they need to know
Take the No. 1 reason: “It’s none of their business.” Actually, as a member of the family, it really is their business. It affects just about every part of their lives. When we avoid our kids’ questions about our income, it makes money feel even more mysterious to them.
But money shouldn’t be a mystery, and the sooner kids learn to understand earning, spending and saving, the better. Not only do they learn about how their in-app purchases are costing real money, but they also can get a grounding in what it takes to make smart decisions about things like college loans and new cars.
Demystifying money doesn’t have to mean sitting down with your family budget and going through every expense. Another friend of mine recently pulled into a gas station with four kids on board and asked them all to predict how much it would cost to fill the tank. Answers ranged from $2 to $15.
When it turned out the answer was $58, the astonished kids took their education even further by converting that figure into things they were more familiar with: How many packs of gum could you buy for that much money? How many bars of clay or crickets for the bearded dragon? How many tacos? How many hours would you have to babysit to earn that much?
We can find little opportunities like this every day.
Honesty and financial realities
The other reasons parents gave for not being truthful about their family’s finances — that they’re worried the information will affect their kids’ behaviors or that their kids will blab too much — may reveal some distrust.
Having an honest conversation with kids about our expectations for them as well as the sanctity of personal information would be healthier than withholding information.
As for my friend Jennifer, she’s since realized she’d missed an excellent opportunity to discuss how money’s spent with her son: He might’ve felt a lot less angry after he saw how her income disappears each month into taxes, mortgage, insurance, car payments and fun stuff for him and his sister like restaurants and movies.
Who knows, he might have felt a lot more appreciative of his mom’s hard work!
Eric Braun lives in Minneapolis. Send comments or questions to firstname.lastname@example.org.