Breaking the Taboo: Why Discussing Family Finances with Kids is Essential
As a parent, is talking to your kids about the family finance considered taboo? This question comes up often, and while the answer may vary from household to household, in my family of four children all born in the 1970s, it was anything but.
Our Experience with Transparency
Transparency regarding family finances has been a hallmark in our home. My wife and I felt that if our kids asked a question, they deserved an answer. By the time they were eight or ten, they understood our net income, college savings, mortgage payments, car payments, and insurance costs. While they could comprehend the broader picture, younger ones grasped it at their level, which was more than enough for them to know what was coming in and going out.
Empathy and Action
Our children had a say in our charitable giving, and frequently, they chose organizations such as the SPCA or UNICEF. When times were tough, we explained the situation, emphasizing things like tightening our belts. Conversely, when we were flush with cash, we shared those happy moments too. Our kids learned about financial growth and volatility, which helped them understand the world better. They also gained the opportunity to see more of the world than I did, thanks to our family’s fortunate financial decisions.
Is It a Taboo in Your Family?
Interestingly, not in our family. From a young age, as they started receiving an allowance, we began discussing finances. This practice continued throughout their education, particularly when they went to college. They quickly understood the importance of budgeting and how to manage their money effectively.
However, my experience conflicts with that of my wife's siblings, who described discussing family finances as the most taboo topic in their families. This discrepancy highlights the importance of cultural, familial, and individual perspectives on financial education.
Empathy and Financial Savviness
While all of my children grasped the economics of family finances, one daughter in particular demonstrated exceptional empathy and social skills. She developed a keen awareness of financial situations based on our discussions, even if she didn't fully understand the numbers. Conversely, another daughter struggled with basic financial concepts but excelled in empathy and social interactions, indicating that a well-rounded education goes beyond just numbers.
The Benefits of Early Financial Education
One of my daughters who is just striking out on her own thanked us for the early financial lessons she learned. She credits her early education for avoiding many of the financial pitfalls faced by her contemporaries. This experience reinforces the idea that early financial education can set a strong foundation for future financial success.
The Taboo in Modern Families
Interestingly, while not a taboo in our family, the stigma around discussing finances with kids is still prevalent in many households today. This reluctance can stem from a variety of factors, including discomfort, a lack of knowledge, or a belief that children should not be burdened with financial stress. However, research and personal experiences suggest that open communication about family finances can lead to better financial decision-making and resilience in the family.
Conclusion
In the grand scheme, discussing family finance with your kids is far from a taboo. It empowers them with the knowledge needed to navigate the financial challenges they will inevitably face. Whether your family is flush with cash or struggling, sharing the details of your financial situation can provide your children with the tools to make informed decisions and build a secure future for themselves.