Not that your children would ever do this, but sometimes kids ask the darnedest questions. And money and the variation between what you have and the things or houses of others, may be the focus of some of those questions. An article by Ron Lieber had a few suggested conversations.

How much do you make?- Kids compare height, running speed, and all manner of things when they are together. A child may not be looking for an actual amount when they ask what you make. Maybe they are worried about paying the bills, or wondering how come some people live in a bigger house than you. With older kids you could make a sample budget in a range of expenses. Include a mortgage and explain how much one house might cost if you save for a mortgage or buy it without saving. Show another mortgage and the difference because of the location or size of the house and the benefits of that. Add electricity and food costs and talk about what kind of job or career might be coupled with that needed income without getting specific about your family or others income or education.

Are we rich?- For everyone having savings means spending less than we earn. But kids probably don't know that. Maybe you could let your children understand either what percentage of what you earn goes into savings for emergencies and retirement or get a book about storing up what you get today for tomorrow. Don't tell them specific dollar amounts but do explain the concept of setting today's money aside for the future and the sacrifices that entails.

Doing without- Things happen and explaining the financial reversal to kids can seem complicated. Kids have no idea about money unless you tell them without telling them the real details. Kids need to know if they will eat if you lost your job. The article suggested getting older kids to help figuring out where to cut back, ask for ideas on free fun family days or stay-cations ideas.

When a stranger at the grocery store asks, How are you? It's more a question of being polite and less a deep question about everything on your mind. The questions kids ask are sort of the same. Teach them principles about money that will help them in their own lives. Don't tell them everything that is really going on in the household checking account.

Citation:

http://www.nytimes.com/2010/07/10/your-money/10money.html


Marion R. Syversen, MBA - President
NorumbegaFinancial
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