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Family Finances
How Much Should Your Kids Know?
By Gina Roberts-Grey, LCSW
Langille advises his clients to devalue the significance of money to balance a child's ideals. "Teaching them that riches include health and family helps to maintain a clear perspective," he says.
Let children know what it takes to run a household without imposing guilt or pressure. As a parent, you work to provide food, utilities, etc., not just a trip to the amusement park. Explain that the electricity to power the computer or cordless phone is not a free and unlimited resource. Factual and simple information for younger children helps develop the association that we're all "buying" utilities as we use them.
"We try to gently impress the importance of responsibility," says Maura Robinson, a mom of twin 4-year-old girls from Addison, Ill. Wanting her children to understand the reality of living in a home, either rented or owned, Robinson occasionally mentions that leaving the television on "eats" electricity or that a dripping faucet uses money that their parents would rather spend on going to the movies. "I don't want my children to be surprised when they're out in the world and have to pay their own way," she says.
Cheryl DiCanni is a certified senior advisor and a registered investment advisor in Houston, Texas, whose clients prepare for their future, plan for college and take vacations. She recommends talking with older children to teach them how to portion their allowance, monetary gifts and babysitting or lawn mowing earnings into three separate "funds" to help instill solid financial responsibility.
"Guiding a child to disperse his money between a long-term savings account (for college, etc.), a short-term goal account (for new toys, video games, etc.) and a 'slush fund' (for going to the movies with friends or a new pack of baseball cards) offers valuable lessons," DiCanni says.
A child's healthy curiosity coupled with images and stereotypes all around him usually leads to him asking this loaded question. Base your answer on your child's age, understanding and respect of your family's leel of privacy and the ability of the child to fully comprehend a dollar figure. If you're uncomfortable divulging an exact figure, "We earn money to support our family," provides a reassuring answer without assigning a dollar amount. Understand that most children under 10 believe their parents are "rich" and are very proud of the work you do regardless of your paycheck. Easing his fears of not having enough money or curiosity about your family's financial situation can often be accomplished with honest and simple information. 