“Mom, are we rich?” I thought I was prepared to answer this sticky, complex money question. But then my six-year-old asked. And I blew it. First I tried to change the subject. Then I said no, only seconds later adding a caveat about how we are richer than most people in the world. Followed by a monologue about how some people look rich but really aren’t because of credit. By then he’d left the room, tired of the question and on to playing Lego.
Vowing not to goof it up the next time, I posed the question to three money experts who have experience answering the tough questions.
Beware the “fat word”
The word “rich” is a “fat word,” with different definitions depending upon the person and the context, explains Susan Zimmerman, a financial therapist and co-founder of Mindful Asset Planning in Apple Valley. “Everybody has a different number or different idea of what it means,” she said.
Turn the question around
Whenever Ross Levin’s daughters asked this question—and yes, it was asked more than once—he turned it around and asked them the same question before launching into an answer. “Their definition would change based on age and interactions,” Levin, author and founding principal of Edina’s Accredited Investors says. Knowing how they framed the answer helped inform his response.
Often, the question is prompted from statements made by peers. Berni Johnson-Clark’s daughter asked the rich question after being labeled rich by her high school friends, who looked at where she lived, the Toyota Camry her mom drove, and the trips they’d taken—and made a judgment influenced by their own definition of the word.
Johnson-Clark, a financial educator with FamilyMeans in Stillwater, recalls thinking her best friends were rich when growing up. “Funny now because I see they’re just like me today—comfortable.”
Parents are not obligated to share how much money they make, how much their stuff cost, or how much money’s in the bank. “Even to this day, with them as 19-year-old sophomores in college, they don’t have a realistic sense of what we have,” says Levin. “They know that we are paying for their college, that we still take trips, that we give 10 percent of our money to charity, and that we are happy with what we have. They also know that money has not been used to define us.”
Fancy things don’t tell the whole story
It’s common for kids to look at big houses, fancy cars, designer clothes, or giant Lego sets and make judgments about who is rich and who isn’t. Johnson-Clark knows all too well that unwise credit use can fuel the displays of so-called wealth that catches a child’s eye. “Being rich means having a high net worth. I’d discuss with them how assets minus liabilities equals net worth.”
Rich is about more than money
“Rich has to do with feeling good and happy with what you’re doing in your life,” says Zimmerman. Yes, having enough money to pay the bills and afford the things that matter to you is important. But making sure kids understand that being rich doesn’t necessarily mean having millions is a value most parents want to instill in their kids.
So are the McGuires rich? We don’t have millions in the bank. But we have our health, our freedom, and our family and friends. I’d choose that kind of richness over the money kind any old day.
Kara McGuire is a personal finance writer and a St. Paul mother of three. Send comments, questions and story ideas to