Sunday Conversation #8 – Kids and Money Matters Edition

Welcome to Sunday Conversation #8! If you would like to participate in next week’s Sunday Conversation, simply ask your question in the comments section of today’s post and I will respond next Sunday. Remember, any subject is on the table (but keep it family-friendly).

Elliott of 21st Century Dad writes, “What are your thoughts on disclosing details to your children about having financial difficulties? While growing up, my parents had their own business so cashflow was always suspect. They did their best to insulate us from their money woes, but they weren’t very good at hiding the stress they were under. Despite these difficulties, they did managed to scrape together money (or debt) for school-related expenses, the occasional persuasively worded request, birthday gifts, and Christmas gifts.

What’s your take on this?”

Elliott, yours was the lone question this week, but one worthy of an entire post dedicated to its response.  When I was growing up, money was a taboo subject between parents and kids, and I think for the most part it should stay that way while kids are small.  I don’t particularly like the idea of sharing money woes with kids because it adds to the stress they already feel from the normal pressures of growing up – academics, fitting in, peer pressure, etc.  However, I do believe in talking about general personal finance concepts at an early age and instilling a healthy fear of large debts, overspending, etc.  My daughter has known about credit cards and their potential danger since she was five or six years old.

As kids grow older I think it is fair to clue them in on some aspects of your financial situation, but only in general terms.  I think is perfectly fine for teenagers to know you are working to pay off debt, or to save up for a down payment on a new home, etc.  Sharing these details with them will make the “no’s” to life’s wants more easy to accept because there is at least some tangible justification behind them (although “because I said so” is the official, universal parental justification for responding to any request – no explanation required).  I’m not sure I would share specific details with my kids such as my exact salary, or the exact amount of debt we owed, or the amount of our mortgage.  Stick to general terms.

Even though we may not intend to share the stress of money problems with our kids, children are intuitive and will eventually pick up on the strained relationship between parents.  This is just another reason to avoid debt, and work towards debt freedom if you are in debt.  It’s often quoted that money fights are one of the leading causes of divorce.  And many of those fights happen between couples deep in debt and struggling to make ends meet.  If you can’t get motivated to get out of debt for your own financial peace, at least do it for the peacefulness it brings to the rest of your household.

I’m interested to hear how readers feel about Elliott’s question?  Do you share money woes with your kids?

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