Money is an emotionally charged subject. Many adults are uncomfortable with their financial situations and therefore reluctant to discuss money with their children. Some parents have feelings of guilt, anger, or confusion stemming from their childhood experiences with money. They may go out of their way to create a different climate in their own homes or may treat their children exactly as they were once treated.
Children’s lifelong attitudes toward money are based on what they learn at home; they’ll pick up their parents’ feelings whether finances are openly discussed or not. For that reason, parents should give careful thought to talking to kids about money.
People often wonder .how open they should be about the family’s finances. Should children have all their questions answered? Do they need to know how much the house cost, how expensive the car is, and how much the family paid for last summer’s vacation? Finances are a very private matter for most adults, and it’s difficult to know how much to share with a child.
At the least, kids should feel it’s acceptable to ask questions, and they should have their questions answered in a way that will satisfy rather than frustrate them. That doesn’t mean parents have to provide all the details. However, they shouldn’t make money a secretive subject. No child should constantly hear, “I’m not telling you how much I get paid,” or, “Don’t ask. It’s none of your business.” It’s fine for parents to say at times, “The price of this feels private to me. I really don’t want to share it with you.” Then, at other times, they can be open about costs.
When children ask about money, their parents have an opportunity to start a discussion: “How much do you think our house cost? Do you know how much people pay for houses?” Parents can use financial questions to introduce subjects such as borrowing and saving.
Such discussions are valuable because young children have only vague ideas about money. They try to organize the little they know into general theories: “If you don’t have enough money, just tells your boss.” “Go to the bank and they’ll give you more money.” “Sue somebody and you’ll get a lot of money.” “Just trade in your change for dollars and you’ll have a lot.” A six- to nine-year-old has little understanding of buying power. Twenty-five dollars may seem like a lot and the $150 a week her mother spends on food may seem a fortune. A child this age also assumes that bigger means more expensive and she may not understand that a small piece of jewelry can cost more than a piece of furniture.
It’s difficult to give kids a clear picture of where money comes from, -how it’s spent, and how financial decisions are made. A child, not seeing the difference between necessities and luxuries, watches her parents purchase shampoo, food, clothes, and gasoline. She assumes they can buy whatever they want. Then, when they place restrictions on her purchases, she may feel confused and unfairly treated.
Children are quite sensitive to their parents’ financial concerns. When parents argue or worry openly about money, kids worry, too. A child may feel responsible for financial disagreements because her parents have told her the things she wants are expensive. She also may feel guilty if her parents say, “We buy you nice clothes and you don’t even wear them,” “Stop asking for new toys. You’ve got plenty already.”
On the other hand, children can make their parents reel guilty. When a child says, “Benjamin has new skates and so does Eve. Why won’t you buy me some?” her parents may feel inadequate and unable to make her happy. It’s important that they keep such demands in perspective. All young children want what their friends have. Parents should buy or not buy according to their own values and circumstances. They can tell their child, “You’d like to have what Eve has, but we’re not going to buy it,” or, “We have different buying rules in our home.” They should try to answer their child’s requests for purchases appropriately and realistically, without becoming angry or defensive.
Talking to your child about money is not easy. Try to respect her point of view, understanding that her knowledge will increase as she gets older. She’s not capable of adopting your financial concerns, and you shouldn’t expect her to. If you work outside the home, don’t burden your child with guilt by making such statements as, “We work hard to pay for your things.” Listen to her questions and engage in conversations (without lecturing) about money. And decide on what attitudes you want to teach her. How do you ultimately want her to feel about earning, spending, and saving?
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