Should we share our finances with our kids?

Always a good question, what is too much information or not enough information to give them the financial education that they won’t get in school. I want my kids financially literate so they become responsible adults that won’t rely on me to bail them out. I believe if we build the strong financial education foundation they won’t need the “bail out” later down the road, or maybe not as much….

So I was reading this article about sharing/showing your household expenses to your tweens and it made me think about how I will do it when my kids are ready for it. I think it is reasonable to show them the electric bill, phone bill, cable bill, these are things they have input on as a household member, as well as most households have them. Since you are still educating your kids it might be easier to speak about paychecks and big ticket items like Mortgage or car in percentages, you don’t need the neighborhood kids or school friends talking about how much you make or how much your mortgage is. IE, for ease of reference I will use round numbers; if you make 4k per month and mort was 1K it would be 25%, after you outline the big ticket items (house and car) and then show the percentage remaining for household expenses and show how much money is spent on those things they take for granted, they may begin to see that it isn’t realistic for you to shell out $20 every few days for their entertainment needs. As you advance these conversations, add in insurance, the importance of that, as well as an emergency funds, investments, savings, charity/tithing. This isn’t a one day conversation, it is an evolution that will happen as they grow, perhaps show a phone or cable bill to them when it comes in the mail. Or maybe a better one to start with is the electric bill. My son who is five, we now “save the polar bears” (we recently saw Arctic Tale, and there was a public service announcement regarding saving energy which will help save the polar bears). By conserving electricity, very easy to do, if you notice a light left on or standing there with the frig/outside door open, let them know that increases you electric bill, get the connection early and you will create life long conservation habits.

If you need help with this, shoot me a note, I will be happy help you outline a plan for your individual situation or concern that you are dealing with in regards to money and your children.

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~ by debt2dreams on July 9, 2009.

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