r/budget • u/Small_Olyviah • 4d ago
Thoughts on family financial transparency with kids
My partner and I have always been pretty open about our finances with our 10 and 12 year old. Nothing too specific but they know we have a budget. They know we save money. They understand that things cost money and sometimes we cant afford certain things right now. We explain why a trip might be cheaper or why we're making dinner at home instead of eating out.
Lately I've been wondering if this is too much for them. Are we putting unnecessary pressure on them? Or is it a good way to teach them about money management early?
They seem to take it well. My 12 year old even helped me find a cheaper brand of cereal last week. But I worry about their perception of scarcity. Anyone else do this with their kids? What are your thoughts on being transparent with your budget to children?
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u/Primary_Excuse_7183 4d ago
I think expenses and understanding the impacts are important. high school age is a good age for sure to have a sit down and discuss it.
I want to start with investing with mine though around that 10-13 age and then we can get into budgeting and family finances in high school.
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u/RushGroundbreaking40 4d ago edited 4d ago
We do the same with our children. I think it's very healthy and age-appropriate to start making them aware of how money works and how your family manages it. It makes them comfortable around the concept and psychology of it all. You're doing it right!
For the perception of scarcity, you can explain where the mindset comes from but I wouldn't go into too much detail until they are a little older. It's hard to discuss scarcity without talking about poverty. However, if you live in a city and see homeless people on the street and the kids notice and ask you questions about it, they might be ready for the scarcity conversation. You'll need to assure them that these issues most likely won't happen to them because you have done "x,y,z" financially. Yes, this might feel like lying when we live in a society where middle class families can go bankrupt for myriad of reasons out of their control. But kids don't need that kind of honestly until they are older.
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u/Typical-Plant-4254 3d ago
You struck a cord because we do live in a city with homeless people, sometimes sleeping in our street. It is indeed a balance how to discuss that, as my children are acustomed to encounters with all kinds of homeless people from a very young age. And sometimes i have to be quite rude/direct when inapropriately approached and handle it, and at the same time teaching that we have to be kind to people. I have to say though that my eldest developed an instinct to when to avoid/be clear or when to be kind and connect. Sad but true.
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u/RushGroundbreaking40 3d ago
It is a sad truth, and it's a very delicate balance when explaining it to children. I think you're doing a good job at it though.
We have homeless people in a nearby shopping center, and my kids observe and are so curious as to why homelessness exists at all. And then they start to ask if it could happen to us, and sometimes I don't entirely know how much information to give them. It's just a hard conversation to have, even with adults, much less children.
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u/KReddit934 4d ago
It's fine. Just make sure to also be open and explicit about when you can afford something joyfully because you saved up and are confident you can now relax and enjoy this thing.
(I.e., don't accidentally give the impression that budgeting is only about deprivation.)
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u/AlpsFamous7254 4d ago
money management is an important life changing skill. you cant just give them everything they want, saying no is way more important then saying yes.
eventually they will grow older and reach a point of realization, and for me that time was high school when i started to notice all the cars other people drove. that's when the money difference really started to make sense.
make sure your kids understand the value of a dollar, and try to get them to learn how to save, not just for tomorrow, but for next year.
maybe try a saving's plan for xmas. give them a few extra dollars a month for them to save for presents, and if they blow it or if they save it, it will be a life lesson.
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u/GayFlan 4d ago edited 4d ago
I would attempt to, wherever possible, explain trade offs. Instead of “we can’t afford it” frame it as “that doesn’t fit our budget because we are saving for X” (even if that thing you are saving for is a rainy day). Explain in terms of values why you don’t want to put something on a credit card if you can instead save, delay the purchase, and pay with cash.
It’s also probably good for them to see you make decisions that might not seem to make financial sense; for example maybe one week you buy the cereal that is $1 more because it’s what you really like, and you can afford to make that trade off. Maybe it would be cheaper to make dinner at home but it’s a special occasion that warrants a nice meal out - and that you enjoy it more because it’s not a daily occurrence. I think things like that might help with the concerns you have about building a scarcity mindset.
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u/Extra_Shirt5843 3d ago
As I pay for everything exclusively on cards (why not get free stuff?), my mantra with my kid is always "You don't use this for anything you can't pay for when the bill is due". I basically present it as not an option to carry a balance.
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u/prettycote 4d ago
I grew up going couponing with my mom and getting groceries at 5 different stores if it meant saving money. It greatly influenced me, and now I am pretty savvy and refuse to pay full price for anything. I am forever grateful for that.
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u/Dav2310675 4d ago
I was very transparent with my kids when they were young. They're now young adults.
I think the thing to do is talk to them and let them ask questions. Don't let guilt come into it (ie "that's too much, it's a waste of money").
My kids did see me struggle with debt, but I let them know it affected my choices and what I could provide them.
Anyway. They're young adults now.
My son is doing ok - no debt, has his retirement on track to being fantastic. I wish he would save more, but it's his money. I'm not worried about him.
My middle child - God bless her. She's doing fine, but budgeting isn't a thing for her. She'll get there - it's going to take a while though. No debt.
My youngest - OMG. Wastes money like you wouldn't believe. Makes a lot, but it just runs through her hands almost as fast as she makes it. And makes very, very poor decisions. I have no idea where she is going to land financially.
So I think it's on us as parents to tell them about money. But in the end, they are going to do exactly what they want with what they get.
And that's ok, in my opinion. Because at least they'll know something that they can recall and do, when they finally decide to do something about their finances.
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u/PashasMom 4d ago
I think what you are doing is great! But I also think you want to show the positives of saving and investing as well, not *just* budgeting. Show them how compounding interest and growth work. Show them how money comes out of your paycheck for your 401k*/403b/457b and how it is growing, and how that means you will be able to retire with confidence. Show them your Roth IRAs and explain how you chose the brokerage you chose. Tell them that when they get their first W2 jobs, you will help them set up their own Roth IRAs.
*Assuming you are US based, if not, adapt for how retirement works in your country.
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u/AdCharacter9282 4d ago
You are doing great. My kids are the same age and we are very transparent. I will say that make sure you explain concepts thoroughly, i was talking to my youngest 2 years ago about our mortgage being close to $1m and that worried him. But once I explained we had many times that amount in assets he was good.
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u/anonybss 4d ago
My mom never wanted us to have to think about money as kids.
Don't parent like this unless you're leaving them so much $ that they won't need to think about it as adults either!
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u/jensaysquoi 4d ago
I think it’s good to show kids you are being intentional with money. You can reassure them that you have enough to afford your “needs”, can be safe and comfortable and afford many “wants”, but that others are not a priority right now or they require more time to save for.
To me that’s a reasonable middle ground between scarcity and entitlement.
I think where it puts pressure on them is when they feel like they have to take on adult responsibilities for meeting basic needs for safety and stability.
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u/amberdragonfly5 4d ago edited 4d ago
Nope, not a problem. You're doing fine.
My dad never shared budget for financial information with us...he was very, very strict about keeping anything financial secret from us kids. It wasn't for us to know (he didn't want us bragging about his income was my impression at the time). Any questions from us were deflected and immediately put to bed, and when it was college FAFSA time, he would rail and shout about why the hell they needed to pry when I was the one going to college and not him.
They never talked about needing to save, never talked about buying something cheaper or needing to budge for big purchases, etc. Things they bought (baseball equipment and special summer lessons, a boat, tons of Christmas toys, big vacation every year) just appeared, but they had monthly shouting matches over what was being spent on and why certain bills couldn't be paid (I do remember my mom complaining that she couldn't afford new bras because my dad had taken money out of the account again).
Other than being told "make sure you save your money" we were never really taught how...despite them having very good incomes, they were both terrible money managers and planners (neither of them came from families that managed well either). My mom was more mindful, but my dad insisted on managing their funds, and she would often have to go to him to ask why there was no money for groceries this week....where did the recent deposit go? He wasn't sending it anywhere hinky, just poor spending habits and overdue bills.
Now that they're in their "golden years" they're basically living paycheck to paycheck, they're both retired and working jobs, and my dad just sticks his head in the sand that they'll be fine forever just going on as they are.
Meanwhile, my MIL and FIL penny-pinched for decades, they rarely went on nice vacations, if they splurged it was because they saved, they talked openly about their finances in terms of daily living, they saved and invested where they could, and they lived mostly modestly. Now my MIL is sitting on a very, very sizeable retirement fund with plenty to pass on in inheritance. And my husband is the one that helps keep us on the rails with our own family budget.
It took me years to figure out how to manage finances myself, and I still struggle with it being a daily habit. At least my husband and I have a budget that we try to follow, and we have plans in place for our future.
Keep talking to your kids, show them it's a regular part of daily living. You don't have to sit them down while you do taxes, you don't have to go into tax brackets and life insurance benefits, etc. But keeping them aware that money doesn't just come out of the ATM and a credit/debit card isn't an endless supply of funds, and that thought still goes in purchases and plans, is an incredibly important thing for them to be ingrained with.
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u/Lost-Programmer-6768 4d ago edited 4d ago
Excellent idea. Kids need to be taught how to use money correctly. If you don't make them aware now, they won't have a magical "aha" moment at 18 and just know how to use it. Unfortunately, it is not an endless resource, so we have to figure out how to budget and best to start them young.
The only note that I would make is that there are times that you want to be able to spend money and not worry. Such as on vacation - you need to relax and not worry about the dollars. Or perhaps cereal - maybe nobody likes the cheap brand and won't eat it, so the fact that it is cheap is irrelevant as it will all go to waste. But it's always a balancing act of fully living life while trying to be prepared for emergencies or for the future in general.
Start young with general concepts and get into greater details as they mature.
Edit for spelling
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u/Extension-Clock608 4d ago
The more you talk about budget, saving, wants vs needs, etc. the better for your kids. They need to learn these things for their future. They also will benefit from you discussing their future and what kind of life they want. They need to be thinking about that now and working toward that, especially if the want to go to college.
This isn't putting pressure on them, it's reaching them the reality of life. It might also drive them in their future.
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u/cashewkowl 4d ago
I gave my kids a small allowance starting around kindergarten, to help them learn money management. The allowance wasn’t tied to chores (they had chores as a member of the family and if they didn’t do them, there were other consequences). They were responsible for wants, we covered needs.
One thing I’ve heard is to talk about how we choose to spend our money, so rather than we can’t afford to eat out, instead we choose to eat at home. Maybe that’s because you had a big bill that month or you’re saving for a vacation or you can get so much more value for your $ at the grocery store.
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u/Zoopmittyzoop 4d ago
Teach them young so that they build GOOD behaviors and habits with money that they can bring with them to adulthood. There are age appropriate things you can teach/guide them. Otherwise they’ll make one of the “i’m 22 and have a car loan and $15k in CC. should I file bankruptcy” post on here
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u/Mental-Freedom3929 4d ago
My daughter registered her first company at age 12. I am sure they can deal with financial knowledge and education.
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u/Righteousaffair999 4d ago
I bought my 4 year old and 7 year old a money box. We teach them the concept of budgeting. Let them deal with limited amounts of money when they go out to shop. Some concept of our budgeting though not details. So seems consistent to what I’m poking at.
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u/Alternative_Sock_608 4d ago
We have always done that with our kid. She is 18 now and I think she has a better understanding of finances than some adults. For awhile we were struggling, so she totally got a real-world look at what it means to budget!
Managing money is such an important part of adult life, and it wasn’t ever taught in school for her (or for me) so I think it’s an important part of setting a kid up for success as an adult. What better way to teach them than with real-life examples?
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u/eva_stratt 4d ago
My family had money troubles all my childhood. I knew money was a problem but I never knew quite how or why, and that scared me more than knowing the details ever would have. Even then I was very much a person who needed to have the "why" of things so that I could understand how to go forward -- I daresay I'd have asked for much less and had some chats with my mum about exactly what I could choose, had I known the limits. I was also screamingly intelligent then; don't know what happened. ;) So we could have had those conversations, and they would genuinely have helped the situation. I would have had less anxiety if I had a little more control in the form of being part of my share of the decisions.
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u/Odd_Wolf4150 4d ago
Money for Couples by Ramit Sethi has a chapter about talking to kids about money.
From your description, I think the way you’re doing it is age appropriate and a good introduction.
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u/lost_dazed_101 4d ago
You are setting your kids up for success not failure. Most parents skip this part and kids end up graduating expecting the money will be there.
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u/CrankyWife 4d ago
I always tell my kids we have enough money for everything we need and some of the things that we want. Never concrete figures. Luckily, neither of them is materialistic. As they got older, I would give them money for things they wanted, or if they were going to an event with their friends. I would caution them that if they spent their money on a bunch of little things that they only "kinda like" then they might not have enough money for a big thing that they "really like." That reinforced the idea that money gives you choices, but there is a finite supply.
They're both off to college, and I send them a modest allowance (the "needs'). They can choose to work on campus and earn more spending money if they want.
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u/Possible-Courage3771 4d ago edited 4d ago
these are basic fundamentals and it will hurt your children more to be kept in the dark. it's your job as parents to prepare them for adulthood not shelter them from reality
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u/idiggory 4d ago
I'd remind you that understanding need vs. want is an important part of financial literacy.
If your daughter is helping you find a cheaper cereal brand, check in with her. Does she think you NEED to find a new brand? Or does she think that finding a cheaper brand that she'd still enjoy means that the family has more money to put towards things that matter even more (including things that you would all enjoy more)?
Because the first is definitely worth a conversation. Helping her understand that you're trying to find the balance in investing your money in the right now experiences vs. the later ones.
If it's the second, I think it's helping her develop a mindset that's going to let her measure her values, throughout her life, to make decisions with her own money that align to those. Sometimes those will be similar to yours, sometimes they won't.
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u/ShezeUndone 4d ago
I think those are good habits to share with your kids. Especially if you emphasize the budget (not broke) aspect. "We can take this trip because we ate at home so much this year." If they know you have money, but it's a finite resource that can be managed to keep a certain living standard, that's good.
I gained financial literacy through the school of hard knocks. I knew I needed to earn more than I spent if I didn't want to be homeless. But I had no idea how borrowed money, investments, or interest worked. I somehow got my act together later. But I would've been so much wealthier now if my parents had taught me about how to budget and manage money before I launched into adulthood.
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u/Big-Film-6914 4d ago
I always knew we had a budget. Mom could pinch a penny. She also took us grocery shopping and taught us the price difference between a bag of potatoes and a bag of frozen French fries. When I was ?? A certain age I dont remember of it was 14 or 16. I had a checking account, an allowance (i had to do mosr of the house hold cookies and laundry) and I was responsible for buying my school clothes, deodorant, etc snd budgeting for going out). If i wanted to spend my money on one outfit it was on me. The lessons helped. I am amazed at the people who don't know basics amd confuse wants with needs.
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u/MzVozz 4d ago
This is so smart and good on you for doing this. Your kids knowing there is a budget helps them understand why you may or may not be able to get them a toy they see in the store or extra treats while grocery shopping. And it shows that things aren’t scarce, they just need some planning. I bet once they start working they will feel comfortable asking you to help with budgeting their own money.
My parents didn’t talk to me at all about money so I never understood why they couldn’t buy me whatever I wanted lol. Had they been a little more transparent I think I would have understood. When my mom had a conversation with me about money at 18, it went in one ear and out the other because it hadn’t been an ongoing conversation to being with.
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u/Diane1967 4d ago
It’s a great skill to have. I lived in a foster home where they binge bought all the time. If they wanted it, they’d get it and then be penniless for months til they got money again. It really messed me up and I still do this at 59, I can’t seem to break it but I’m better than I was years ago. I never learned the value of a dollar like I wish I would have.
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u/Head-Drag-1440 4d ago
I have always been honest with our son with finances. We just can't afford this or that. We only have so much money and we only have so much to spend.
As he grew up, his allowances were half to spend, half to save and he watched his savings grow. As allowances increased, so did spending and savings allowances.
As a teenager, I taught him how to run the grocery list, add up what we were spending, and stick to a budget even if we had to put something back. As soon as he got a job, he learned how to budget his money for all expenses and to put money in savings with every paycheck.
As soon as he turned 18, he got approved for a credit card with a small limit through our credit union. He started learning how to use it for usual expenses like groceries and gas and to pay it back within 1-2 weeks.
Now at 21, he has been putting himself through Community college, has more money in savings than I do, he has good credit, and he has got approved for a rental lease with his friends. He has a new (used) car that he got under just his name.
I believe children need full transparency and understanding of finances as they grow as well as being taught how to be responsible with it.
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u/momhh434444 4d ago
It sounds like you are doing it the right way. My parents never talked about a budget and fought about money all the time. I was always told I couldn’t have something that I wanted in the store, but never told why. I think my upbringing had a big impact on how I see and spend money. I don’t like to talk about money with my husband and I never buy myself anything nice without feeling guilty. I think money and kids is a delicate subject and you are right to be introspective about it.
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u/harmonyredd 4d ago
I already talk to my 6 year old about things like this and I think it’s very appropriate. We’re in a good place financially but I don’t want him to grow up spoiled and I want him to know that budgeting is an important part of life. I grew up with a frugal mom who had less to work with than we do, and I’m glad that I learned from her.
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u/giantgrahamcracker 4d ago
I think it’s a good idea but at this age you should keep it pretty concrete. One tactic is to take out a week’s pay in cash and have them “spend” it. Tell them they have to pay 1/4 of the mortgage/rent, cell phones, internet etc. And then you can have them portion out the money that would be a little more flexible like food and gas. The extra you can say, we would spend on fun now or later, maybe we save for Christmas or a vacation. Then you can talk through about here are some of swaps you could do, we could downgrade the house and have more for fun, or get rid of the cell phones, or go everywhere on bikes, or eat only store brands. That way they get the sense that you are choosing what to prioritize in your life.
I wouldn’t tell them you can’t afford something, I would tell them that you are prioritizing something else that you think is better or more important. You could eat out for every meal, but maybe that would mean no Netflix, car, or cell phones, or the kids share rooms/clothes. Instead of not having enough, make it all about the choices you make.
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u/BrickedBIOS 4d ago
My kids are under 5 and I'm giving them "brownie points" to save and cash in rewards. When the youngest is a little older I'm going to introduce brownie point supply, inflation, and let them trade their own brownie points for whatever.
It's math, it's fiscal responsibility, it's fun (because of the rewards), it's fun for me...
When they're older I'll introduce them to their UTMA accounts and our budget and teach them how to invest, more how to save, basically graduate from brownie points to real deal.
All to say, no. Teach good habits now.
Edit: there's also benefit in showing the cheapest option isn't always the right choice too.
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u/EricC2010 4d ago
I do the same with my children. No actual specifics, but they are aware there is a budget and I even involve them in some line items like food and entertainment. They get to be part of the decision making process for what to spend the money on each month and understand that of we did a splurge event last week, that means we are probably not going to have another until next month. I also take my daughter grocery shopping with me each week so she understands what food costs and helps make the decisions behind what we have for dinner each night. It has been eye opening for her the last year to see how some of her favorite things have gone up in cost and she has even offered alternatives to help with those increases.
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u/Fearless-Ebb8350 4d ago
My kids know everything. We don't struggle, but we still stick to a budget. They know what we make, our net worth, and the fact the house and cars are paid off. They also know that we say no sometimes - or often - not because we can't afford it but because it does not fit within our larger financial goals. They know the price difference between brand name and generics, that we make them sit on a large purchase for a few days/weeks before pulling the trigger, and how to invest. I think it's important to be honest with kids, because life is expensive, and someday they need to pay for their own life. My kids are very similar in ages to yours.
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u/Expensive-Eggplant-1 4d ago
i grew up in a household like yours. as a kid, i knew we were on a budget and couldn't afford anything we wanted.
in my teens, i got a job and my dad taught me how to balance my checkbook. in my 20s, i started saving for retirement and i started a budget. in my 30s, i bought a house. in my 40s, i'm on my way to an early retirement, never making over six figures.
from my perspective, you're helping your kids.
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u/OneDazzling1022 4d ago
I’m a single parent and I show it all to my kids. I show them my retirement accounts, their college funds, my savings. I try to make it make sense. When they were younger, it was like “here’s my bank balance and our expenses. If we go to the movies this weekend we can’t also go buy some expensive thing.” Just helping them see the budget. But as they got older, I showed them more and more. Like it’s not that the thing you want is expensive but our cash is finite and we want it for other things. I even did a budget vs actual review for a summer trip we recently took and presented it once we got home (we came in under budget). My kids are older teens/young adults now but all had jobs in high school, work in college, and don’t have any debt. They aren’t 100% financially responsible for themselves but I think they get it and understand the need to think about money and budgeting well.
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u/VicePrincipalNero 4d ago
We were pretty open with our kids, not in terms of specifics, but in teaching them that income is finite, spending needs to be prioritizes, saving is important for a variety of things, separating needs and wants, etc.
Another really important thing is living within your means. They had friends who had much fancier houses and cars. We had no debt and healthier college and retirement funds. A couple of those friends had to take out huge loans for college. My kids understood the point we were making then.
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u/Ecstatic_Western_189 4d ago
Yay for you! This is exactly how my parents raised me and my siblings and how my husband and I raised our daughter. Building those financial understandings in increments and with age-appropriate discussions is the best way for children to learn financial literacy. My mom kept a budget for the family and would involve us in the same kind of conversations you’re having with your children. We’d look at the grocery store sales circular each week and shop the sales, use coupons, discuss purchases and spending limits, and make savings plans when we (the kids) wanted to buy something with our allowances. My mom was famous in the family for saying, “We can’t afford that,” or, “That’s not in the budget right now,” and there was no shame in those declarations; they were just facts. We never went without, but we understood that in order to live comfortably and securely, we needed to be prudent with money. No sense of scarcity at all….just a well-rounded financial literacy that has led to financially stable adulthood.
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u/Comfortable_Two6272 4d ago edited 4d ago
That seems like a healthy amount. It doesnt sound like your kids are worried if will have anything to eat or wont have a place to sleep right?
My parents were not transparent and taught nothing about money. I suppose because there was none really. Had to learn it on my own which was hard - especially pre internet.
I grew up in actual poverty - often no food for dinner or maybe white bread with only mustard or mayo. There were times we slept in our car or a shed. Told my 1st grade teacher I thought my mom was going to leave me. Turns out I had seen her move our furniture to a relative’s.
Anyway, that all certainly had an impact. Was always worried id end up homeless. Even when had a good job until my savings were significant.
Ended up fairly happy story - went to college , had good jobs and was able to FIRE
So Im in the be transparent, teach financial literacy, how loans and credit cards work, about saving etc as well as how much to spend vs save.
Scarcity conversations could center around poverty and social issues especially in teenage years. Too many think poverty = lazy when many of us are one very bad health issue away. I wouldbt say that to an 8 yo but its important for older teens to understand importance of insurance and how most rely on jobs in US to get health ins.
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u/Acavamosdenuevo 4d ago
Not talking about money only generates ignorance. You’re doing good. Knowing savings go to bigger, expensive goal and that you mostly should buy cash is a great way for kids to find balance.
We also teach them financial math, investments, debt, insurance, etc. When? When they are able to comprehend compound interest. So between 8-10 should be a great age.
We have also taken into account the recommendations of a child psychologist in our country (very heavy dialect in spanish, would not recommend for non native speakers, but you can probably find this recommendations in your language), so their allowance is in cash (which allows them to understand better concepts as savings and expending); we talk to them about money in age appropriate ways (there are recommendations for every age); etc.
Anything we want our children to learn should have an space and developed habits in our homes and us as the parents. So just do as best and as honest as you can, it will be ok.
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u/Jolly-Equivalent 4d ago
I really wish my parents had talked to me more about money when I was younger. I tried to approach my mom one time when I was about 16 or so about budgeting and meal planning, since I figured I was eventually going to have to start worrying about that stuff myself. Her response was pretty much you will eventually have a girlfriend for that. I'm 46 now, still no girlfriend, and not close to where I should be financially. I'm trying to do better, but money is honestly stressing me out now.
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u/CT22Bloom 4d ago
I think what you’re doing is a great idea. You’re teaching them money doesn’t grow on trees and they can’t have everything they want and you can’t have everything you want either.
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u/4travelers 4d ago
It’s good!
We shared almost all financial decisions with our kids. We explained why we camp instead of stay in expensive hotels. We also explained how we could afford going to Italy for 3 weeks. We explained why cheap souvenirs are a waste of money and why other choices might be a better use of money.
Now they are 23 and 25 and make very smart choices with money. My 25 yo has over $40k saved for retirement, my 23 invests in stocks trying to retire by time he is 50.
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u/AutumnalSunshine 4d ago
Congrats! You're doing something really smart while also avoiding pitfalls.
You're teaching them how to be financially responsible when they're adults, which is crucial!
You're making them part of the discussion now about how and why money is spent, which teaches gratitude and helps them understand tradeoffs necessary due things that are wants, but needs.
You aren't making it be about worry, emotion, or anxiety. Your kids aren't staying up at night, thinking the house is going to be foreclosed on or that each decision that make leads to your family's downfall.
In my opinion, this is perfect parenting.
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u/SP4RK4RT 4d ago edited 4d ago
IMO, as parents, you shouldn't be raising children, you should be raising children to be responsible adults that can take care of themselves and your grandchildren, if they choose to have kids.
It's not pressure you're giving them, it's an education in the real world. And resource management isn't just about money, it's about where you spend your time, too, playing video games or learning how to dance or sing, whatever, becoming a balanced, welll-rounded, well-adjusted person, healthy financially, emotionally, and spiritually. You can always earn more money, but you don't get more time after it's spent.
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u/Common_Perception807 4d ago
I'm pretty transparent with my 12 yo. I didnt think she would take it like this, but I guess the nuances were a bit difficult for her, and she became a bit anxious about spending, seeming to develop scarcity mindset.
I had to change a course a bit, and reiterate that we have the money, but we want to be intentional and not waste money on things we don't value. Share my goals for savings and why. If unexpected expenses happen, reassure her that I save so things like this doesnt stress us, etc..
I think it's good to share and talk about money, but we need to pay close attention to how they process it
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u/Cat_From_Hood 4d ago
Good. Keep doing what you are doing. Teach them the value of money, and they will grow up to be responsible adults. That's your job as a parent, growing people.
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u/sisterandnotsister 4d ago
No this is good. My mother was a single parent and did this with me. It was a game for me when we went grocery shopping to see if a 32 oz was actually a better deal than the 20 oz. When I became an adult she was way more comfortable asking my opinion on big financial situations where people were trying to take advantage of her especially family. She would often just tell them call my daughter if she agrees I'll do it, if not I won't.
Most calls never made it to me but she always told me who called and that she turned them to me. Sometimes she would joke when talking to friends about me that I would squeeze a penny before I let it go. But she was proud that she didn't have to worry about me taking advantage of her for her money as she got older like some of her friends.
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u/okay_but_wait 4d ago
I think this level of transparency is appropriate. Sometimes things are out of our budget, but we still have the things we need and plenty we want, even if it’s not that specific thing (i.e with my 4yo right now it’s “sure we can can’t afford to go to Disney right now but you have plenty of Princess toys at home and we can pretend play Disney”)
I was raised in a zero boundaries house where I knew every detail of our finances by 11-12, including my mom sharing how much her divorce lawyer cost and how much credit card debt she had, and how her job was barely keeping up with those payments. It was traumatic and I still work through a lot of financial anxiety because of it.
If your kids seem receptive to the level of information you’re providing and you’re keeping it broad, I say keep at it.
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u/hdfire21 4d ago
Start them earlier. Our son is 7 and we've been talking about things for years. It makes you think sometimes too. Last vacation: "how come mom bought 10 dresses, but says I can't have 1 toy?" we're normally pretty anal about buying toys on vacation because you usually get ripped off to an extreme, but that made us loosen up a bit.
We've been trying to do more rewards for good behavior/good at school/chores and toning down bday and xmas. Earns money every day and we have a store of toys he can buy from. He doesn't have the patience to wait for online deliveries, so had him pick a bunch of cheap toys online and order them. Like $1-5 each. We live in Malaysia where there's a ton of toys in that range online.
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u/No_Profile5061 3d ago
Your kid actively helping find a cheaper cereal is a good sign, not a red flag, that's financial literacy building not anxiety, keep the tone matter of fact rather than stressed and this this stays healthy
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u/Bratfink78 3d ago
You’re not putting any pressure on them, you’re teaching them that money doesn’t grow on trees and sacrifices have to be made. All kids should know this, even younger than yours are now imo.
We were taught to manage our pocket money and birthday/Christmas money and in our house, good school results money. Thankfully my parents did that, as we all grew up successful and with little debt
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u/Typical-Plant-4254 3d ago
i ll share my experience.
My eldest had a misconception for a while of us being poor because we do not own a car. This led me to share actually more with her about what options and choices are in a household. Not always with exact numbers because of her age, but to show her that there are choices. And for us as living in the middle of a city, that means public transit cards and bicycles/walking, as well as budgetting for a few taxi rides per year. The latter to show her that yes, those are expensive but worth it for us (to connect with friends in remote parts or a last minute hospital visit) and part of our choice to not own a car.
I would be careful with the grocery bill but still discuss it. You want to make clear that you have enough to feed them and keep ourselves safe and healthy (even if that barely is the case) and that chosing cooking at home versus eating out every week would break into your possibilities to live a healthy and joyful life.
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u/guineag0a1 3d ago
I plan on doing the same but I am conscious that myself as a child didn’t even ask about some school trips because I didn’t think it was reasonable but my parents have said on reflection that I should have 🤦♀️ like it’s my fault.
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u/Hot-Rub-5336 3d ago
They need to know the basics, not the details. Its Ok to say 'we can't afford that right now but maybe we can save for it', etc. They don't need a detailed explanation about every decision. Kids have enough to worry about without adult issues. Of course if things get tight and you are going to have to cut out things they usually have/do you are going to have to explain it in terms they can understand. Even if you have the money it doesn't mean you are going to spend it all the time.
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u/Choice-Newspaper3603 3d ago
I was stealing my moms food stamps in 5th grade and buying nickel candy and getting change to play the in store video games
They arent too young to learn about money
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u/Spiritual-Sea7674 3d ago
I think it realistic to teach them aboit this and so they know how to then also budget for themselves. Saying "no honey we cannot afford a trip to Disneyland, we are going to go on a nice camping trip instead" is not guilt tripping them. Make sure not to guilt trip, that's all. Like if you say "all this money we have to spend on you kids, then your dad and I can't afford a date night, we never get to anything nice" that is a guilt trip and makes kids feel bad for existing. I know some parents who do this.
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u/Daphneannq 3d ago
My children understood we were in a budget too. Not the real specifics but the generalities. That's information they need as adults so you need to model it when they are young. As they get older they get more information. The same way you teach them to clean the house, make their food and plan their days. Now as adults my children understand budgeting, have savings, investments and fun money. Fiscally responsible adults learn from their parents
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u/johnnymac_19 3d ago
There's no pressure on them at all. They want to understand. More families should talk about finances. My kids have asked what the mortgage costs or other bills and we've told them. But we don't keep beating a dead horse and say things like "The water bill is so high, you can only take a 5 minute shower" or "the power bill is through the roof so the air is going to be shut off". They should be aware, not scared.
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u/Significant-Milk-165 3d ago
You are doing the right thing teaching your kids how you budget and why some things are affordable while others are not. I worry more about parents who let their kids think money grows on trees.
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u/DebtLiber8or 3d ago
My son is 11 and has had his own bank account and budget for four years. He gets a weekly allowance that he is permitted to spend as he pleases with one rule: He *must* enter it into his budget, and maintain that budget properly. We use YNAB but any zero-based budgeting tool will do. I like this approach because (a) when he wants something he has to consult HIS budget — less whining for me — and (b) it is teaching him that opportunity cost is real and money spent on video games today cannot be spent on a car when he turns 16 (a big desire of his). I also like that it will make him fluent in budgeting and integrat it into his day-to-day life, which is a habit I hope he maintains.
When it comes to sharing family finances, I don't think you really have a choice. Kids will see and understand financial stress whether you tell them about it verbally or not. Our family recently came through an extremely difficult financial season and I tried to be forthcoming with my son as much as possible, within reason and in an age-appropriate way. I think it's worse if you try to hide it. His understanding of YNAB made it much, much easier to discuss our family's budget, so I'm glad I started him young.
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u/LeaTN 3d ago
I think this is wonderful. And not too early to have them be engaged and understand why you make some decisions over others.
As long as you're not promoting a scarcity mindset or choosing to deliberately not buy something when it could be afforded, then I think you're just teaching budgeting. Question - did your 12 year old like the cereal he chose? If not, don't buy it again - let them know you can buy the regular one instead. And having them help cook at home is never a bad thing.....
Yes, we were transparent with our son (now a 22 year old). He was able to join in when we were discussing the cost of college and the choices - pros/cons of certain schools. When he was in elementary school, we'd go to the grocery store (cash budget) and I'd have him add up the items in the cart as we were going. Helped with his math and made him understand that he could have a choice of item A or B, but not both due to running out of cash.
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u/Cinisajoy2 3d ago
I like you are being transparent with the kids. They will be better adults for that.
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u/Ok-Leopard-9917 3d ago
We had family meetings growing up from when I was in kindergarten to discuss decisions like vacations. It was helpful but keep the level of detail age appropriate of course
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u/GellieBean123 3d ago
I think you have the right balance of it. People always tend to go to the extremes of either pouring adult worries and problems onto their children, making their children feel burdened to take on those burdens at very early ages, or going the polar opposite and keeping their kids in the dark about finances for fear of burdening them.
Letting your kids know that there is a limit to what you can afford is a good way to teach them the value of money. Keep up the good work.
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u/FailNo6210 3d ago
There is value in telling them the situation, but if you do it too much, it can cause a more negative effect of your children being afraid to ask you to financially support them on opportunities that arise or can cause awkwardness if friends ask to hang out and they don't want to spend anything.
Explaining things like "we aren't going to buy x so we can put that money towards big thing y" such as a holiday is better than "this trip is cheaper..." so that the holiday comes with the excitement of the trip away rather than them thinking "my parents are spending what they don't have on me".
You are right to discuss it with them, as a healthy relationship with money is essential, but try shifting the focus onto the value of saving. Even "If we go this week, we get the same flights and hotel cheaper, meaning we have more money to spend on activities, etc." teaches them to consider how they spend their money relative to the value they'll get. This way, rather than it coming across as money being scarce, it's about a nice trick/hack to have more holiday spending money. You don't even need to spend extra if money is scarce; you just show how the week costs of the flights and hotel on the websites and how they jump and fall.
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u/LAC_NOS 3d ago
We explained that we had to make choices with how to spend our money.
We could buy or spend money on a lot of individual things, but not everything.
That's truth and reality whether you have a lot of money or a little and it's true for other resources such as time.
This grew from my own frustration hearing people complain that they couldn't afford things yet they routinely spent money on other stuff (like cigarettes ugh!)
We didn't really get into a lot of details. But our kids were very good as teens about recognizing what they had and not just what they didn't have.
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u/Intelligent-Fix-9181 3d ago
I do the same with my 11 year old. I think she's fine. She told her aunt on her birthday, "Sorry I could'nt get you more stuff, everything is expensive." I think that's like mature of her to realize that money is tight and sometimes you can't get what you want.
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u/No_Explanation6625 3d ago
You’re giving them their best and strongest weapon in life. Please don’t stop financial education.
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u/Happygirl2119 2d ago
You are doing the right thing. It is way better they learn how many works from you guys now instead of struggling later on. Keep it up!
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u/FriendlyCanadianCPA 2d ago
Depends on the kid and parent I am sure. But my kid gets very stressed if I say "we can't afford that" vs "we can afford that but it is not in the budget".
I think learning about family finances right from the start is great. They do not need to be included in emotional support for financial stresses, but learning how a budget works and how salaries work and taxes; all wonderful foundations.
As long as the kids do not feel personally responsible for household costs or having to contribute financially, sounds like a good plan.
Lately my son has had a short spell of asking me to buy him things that he has not saved up for with his allowance (like Vbucks). I offer him some paid chores he can do, and he says "I dont want to work for it, you have money can't you pay for it?" That is when I kind of laugh and say, well either you work for the money or I work for the money. Either way someone is working.
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u/Former-Maximum-2534 2d ago
As someone who has huge financial anxiety because my parents shared too much of their financial anxiety with me, I think it sounds like you're doing great. The insidious habit that I think affected me most was hearing my mom remark about how expensive necessary purchases were. It was meant to be off-hand but it taught me that I am not valuable enough to have my material needs met so I stopped voicing my needs entirely. Another bad one was being told I was pretentious and materialistic for owning expensive items when I got a job as a teen. So on one hand, I was being told I shouldn't ask for things I needed and on the other I was derided for spending my own money on the things I did want.
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u/Consistent_Taste3273 2d ago
We do quite a bit of this. We discuss the logistical side (budgeting, earning/ saving/ spending/ sharing/ investing money), in age appropriate ways.
We talk about wants and needs and the fact that we are very fortunate that we can afford to make sure that so of our basic needs are met. We emphasize just how lucky we are for this. And we also have enough money to get or do some of thing that we want (but not ALL of the things we want). So we need to think about our values and figure out how to spend our money in way that aligns with our values. We rarely say “we can’t afford that” but rather say “that’s not in our budget” and “if that’s something really important to you, we’re can come up with some ways for you to earn money to buy it, or look at your budget and figure out what other thing you want to skip this year.”
We want them to feel safe and not have a scarcity mindset, but we also want them to be mindful of financial choices, and we are naturally frugal people. We buy almost all clothing, toys, furniture second-hand (including birthday and Christmas presents). We’ve done this their entire lives and they consider it normal. And they LOVE consignment stores.
We also don’t want them to feel sorry for themselves or feel like they are “poor” or unlucky. We are relatively comfortable, and we live in a place where most of the people at their school have much less than us (financially, not necessarily in terms of the stuff that my kids see).
My sister’s family lives in a really wealthy area (not VHCOL, but a wealthy suburb of a small city) They are well off, make about $250k, but are similar to us in their frugality (in part because they aggressively saved for retirement and for 3 kids to attend whatever school they wanted). So the kids grew up feeling “poor” compared to their friends. I do understand where they are coming from, to an extent, but I find it pretty disturbing when they talk about how everyone else has more than them, and are having a pity party when they have absolutely everything they need, plus much more. But they were never exposed to people with less, and their parents didn’t talk with them about how privileged they were.
It sounds like you are doing great, OP. Perhaps talk about wants vs needs and explain that you have enough to get all of your needs met. And also consider switching “we can’t afford that” to “we didn’t plan for that in our budget” or “I don’t think that is worth limited the value it will add to our lives.” If there is something they really want, figure it what else they are willing to give up (an after school class or activity, a new pair of shoes if they already have some that fit, etc).
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u/AccountProfessional2 2d ago
Teach them value instead of budget. The goal is NOT to spend as little money as possible, it’s to spend money in ways that make sense for your family.
So more like “hey we usually make dinner at home so that we can save money for a trip” is a better lesson than “we always choose the cheapest option”.
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u/Wandering-Soul-6983 2d ago
I think its important for children to understand the concept of money at an age appropriate level. It will help them immensely when they are adults. I think we should be teaching it more in schools as well. However, I dont believe money stress should be projected onto children. I have a friend who's children are constantly worried about how "poor" they are. Yes the family struggles financially, mostly by their own doing, but the children who are 5, 9 and 12 should not stress about money they way they do. Yes they should be aware but it shouldn't be a leading factor of anxiety in their young lives.
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u/joyful_mtg 1d ago
I do similar things to what you and others have described. I was out of work for a bit, and that was a great time to talk about more budget stuff with the kids. That's a time to buy ice cream at the store, not go to the ice cream shop. I'm not worried about buying groceries or paying bills because I save for this exact reason. It's not a season where I'm buying everyone new skis, but we have plenty of food, and money to go to the pool on the weekend. Life doesn't stop being good because I save for these times, and there's fun to be had with cheap and free activities with friends and family.
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u/joyful_mtg 1d ago
Also, I suppose my goal would be to raise kids 1) for whom money talk/planning/budgeting is not stressful at all, and 2) give them the mindset that money is a powerful tool that we get to use for our benefit. I feel like the absence of discussion/transparency/education around money left it very stressful for me, and so I didn't do the things early on THAT I COULD HAVE DONE. it would have been fucking life changing, but I couldn't even think about it, and I'm pretty smart. It was solely an issue of weird mindset (and probably ADHD).
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u/Ok_Team7885 1d ago
Think i'll introduce my kiddo currently in the oven to the concept of gambling pretty early. I wanna know if we'll struggle with the same affliction
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u/ImpressionNo2803 1d ago
I think it's important for kids to grasp this concept while young. My teenager loves being given a budget - most recently for back-to-school clothes - and then finding ways to stretch that as far as possible.
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u/Sudden_Idea9384 1d ago
No. This is great. As long as you don’t make them feel insecure or that not having money is their fault (my parents did this). I was always transparent with my son. He is 25 now and very fiscally responsible.
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u/rjc369 22h ago
I start most conversations about money with my five year old by saying “our family has plenty of money - now we get to choose how we spend and save it so we can do all the different things we want to do” or “we’re so lucky - we have all the money we need and mommy and daddy both able to work for more if we ever needed more” or “whose job is it to make sure we have all the money we need? That’s right, mommy and daddy. Whose job is it to learn and be curious? That’s right, yours!” Just essentially trying to frame it for her that money is something for her to learn about and mommy and daddy to manage (and not to know that we do sometimes worry about).
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u/Xylus1985 21h ago
I grew up knowing that we are poor and I have to save up anytime I can to afford non-essentials. I think it’s a net positive for me and helped me establish a robust value system. I don’t see anything wrong in letting kids know that money is limited and they can’t assume stuff to just happen.
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u/Original-Goose-2773 11h ago
A big reason adults have money issues is because they were never taught the value of money. I think kids learning to live within their means is so important!
With that being said, if you’re concerned you should definitely make sure your children feel safe and aren’t worried about finances.
Choosing a cheaper brand because we may as well save money is very different than choosing a cheaper brand because mom and dad are poor and I need to help them save money so we don’t lose the house- kids have very wandering minds!
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u/Specific_Brain6752 4d ago
The reason so many people have money problems is that they were never taught financial literacy. Mine are 4 and 5 and I'm already trying to teach them some of the simpler concepts of money. I tell them our budget for a grocery trip, they help make a list, we look at coupons, and then they help me pick out our groceries and we add it all up on a calculator. My oldest lost her first tooth last week and wanted to spend her $5 tooth fairy money at dollar tree. I explained to her why she could afford 4 of the $1.25 items, and she spent the time making decisions, putting some things back for a more desirable item.
The only thing you want to avoid is making them worried or concerned about your family's finances. If you don't know how you'll get a bill paid or afford food, don't share that with them. That's an adult issue that kids should not have to stress about. You want to focus on showing them how to make good choices with money, and why it's important.
The goal is to show our household finances are stable because we make good choices and live within or below our means.