I remember the first time my 4-year-old son asked the question: "How much money do you and Daddy make?"
I eyed my husband across the table and realized that neither of us knew how to respond. In fact, I felt downright awkward. It was the only time I could recall my son asking a reasonable question that completely stumped me. Would the number make sense to him, or somehow skew his perspective of our financial situation? Would he think we were rich? Poor? Also, what would my son do with such private information? Tell his friends? His preschool teacher? It all felt terribly uncomfortable.
Finally, I said, “Why are you interested?”
He shrugged. “I just want to know.”
Of course he did. We were a family that spoke pretty openly about even the most awkward subjects, but I still wanted to run from this hugely important one. I even knew the source of my reluctance: As a kid I was told that I shouldn't talk about money. Not unlike sex, income was typically an issue shrouded in secrecy.
In fact, I think parents today are more open with their kids about sex than they are about money, at least in any real way.
I did my best that evening not to shut my son down. Instead, I hesitantly gave him a ballpark figure of our household income and watched him try to process that number. I could tell it didn’t fully make sense, but it at least started the conversation.
But the truth is, as I sent my son off to college last week, I realized something. I hadn’t actually explained enough to him about budgets, saving, expenses and banking. As we looked together at his bank account and talked about what he could spend that first semester, I wished that that my husband and I been even more forthcoming with information when he was still under our roof.
No, your 3-year-old doesn’t need to know the exact bottom line, but your 5-year-old can certainly start to process what it means that you have a salary and expenses.
If you’re wondering when you should you start talking to your young child about money, the answer is probably right now.
And not in a cowardly manner that dances around the question or deals only in piggy banks and the profits from lemonade stands. Rather, talk and answer your young kids' questions with full frontal honesty, including sharing facts about your family’s financial status.
As in, here’s how much we make and here are our expenses. Show them with Monopoly money and break it down into entertainment, expenses, savings. Show them what you put in the bank or why you struggle to save.
No, your 3-year-old doesn’t need to know the exact bottom line, but your 5-year-old can certainly start to process what it means that you have a salary and expenses. Basically, if you’re children are old enough to see things at a store and ask for you to buy them, they are old enough to start understanding the power of money.
Still stuck? Here are five ideas to get the money conversation started with your young ones:
1. Give kids as young as 3 and 4 a small allowance in exchange for doing some simple chores, like putting their toys away or clearing their plates. Stick to the allowance system, by scheduling it in your phone each Friday. But also talk about how they will use their money. For spending? For saving? Offer guidance but let them be the decision-makers.
2. Bring your kids with you to the bank to open an account in their name. Show them how the number grows when they put money in. Keep them interested in knowing what that number is. Maybe talk about a long-term savings goal.
3. Answer their questions about your income without making them feel bad. And get over your own awkwardness. Give them increasingly more information as they get older.
4. When you use an ATM, explain why the money is there. (Basically, because you worked hard to earn it.) If you use credit cards, explain how they function and how you have to pay them off each month or suffer penalties. If you've made bad mistakes with credit, help them learn how not to do the same thing.
5. Talk freely about your own situation, so it becomes a comfortable topic of conversation as your kids grow up. How did you earn money as a kid? A teen? What did it feel like to have your first real job? And teach them that working, setting financial goals and sometimes making sacrifices is how your family affords things.
But, most importantly, get the conversation going.