I was fortunate to grow up in a middle class home with parents who cared for my needs and occasionally indulged my wants. The cost of stuff, what we could afford, the value of a budget, however, was rarely a topic of discussion.
Was their approach right, in the sense of being helpful, in preparing me to responsibly manage my own finances, and maybe pass along a nugget or two to my kids? Before answering this, let me express my unequivocal gratitude for the foundation of love, comfort, and security provided by my parents.
That said, ahem, parents of all stripes would be wise to reconsider the benefits, or lack thereof, of this non-constructive approach, otherwise known as ‘our-parents-didn’t-discuss-money-with-us-so-we-don’t-discuss-money-with-our-kids-although-we-don’t-really-know-why-it’s-just-the-way-it is.’
As kids, our primary behavior models are our parents. Like ducklings, we imprint upon them, copying their behavior simply because this is what we’re wired to do.
Whether we know it or not (usually not), we learn their values, internalize their ideas, even subconsciously choose a mate resembling, in appearance and/or character, one or another parent (possibly scary, but often accurate). So why shouldn’t we also copy their relationship toward money and the silly silence and secrecy surrounding money issues?
The thing is, we do. Other than telling the teenage me that I spend too much, and that money doesn’t grow on trees (an oldie but a goodie), my family didn’t have money conversations.
Even as an adult, well into my forties and my parents in their seventies, a time when estate planning issues should be front and center, lips remained sealed. Their net worth, who would assume responsibility for their investments should one or both of them become impaired, plans for distributing assets post departure for the purely spiritual world, none of this was shared.
Thankfully for me and my kids, I don’t accept that imprinting is permanent. If you want to change your ways, with persistence and effort, you can escape generational hand me downs.
Break The Mold, Bear The Fruit
Here’s the question to ask your self: in staying silent about money issues, who benefits? And the answer is … no one.
As for kids and teens, they are wayyyyy savvier than you may credit them. It’s not difficult to connect the dots, piece together how much dough the parents have. I mean, if they’re so inclined, kids can go online to check your assessed home value, determine the cost of family car(s), piece together how much you’re dropping on family vacations, furnishings, clothes, etc.
And the middle-aged adults with aging parents? If it’s easy peasy lemon squeezy for kids to roughly calculate family wealth, then the +30, +40, +50 folks can do it that much easier. The point being, your wealth isn’t really much of a secret. And if you insist on staying the course, buttoning up money issues because you get all twitchy and squirmy and sweaty when even thinking about having THE TALK with your kids, oh boy, you’re missing an excellent opportunity not only to help them break the money taboo cycle, but to teach your kids about money.
Of course, talks should be tailored to a kids age. For example, more than once my 11 year-old son has asked how much money I have. In kidspeak, this means, ‘hey Dad, tell me how much you’re worth and I’m hoping you toss over a big fat round number because that would be so cool’.
So I tell him, $1,000. But he doesn’t buy it. Eventually, because I see no harm in playing the game, I go up to $50,000. He still doesn’t buy it but this is a huge number to him, one he can’t really place in any sort of perspective, and he’s thinking I may be getting close to the truth. Regardless, this isn’t information I share with my kids because in no way would it benefit them at this point in their life.
In addition to the cost of groceries, clothes, and restaurant meals, I do share the cost of a family vacation. And I share all of these expenses because I want them to know that life costs money, that I work hard for money, and that I do my best to make responsible spending choices, ones that enhance the value of our lives.
Ultimately though, it’s not about me. I want the kids to know that independence, grounding and self-esteem come from personal accomplishments, from work, not from being on the receiving end of gifts.
And when we work and earn money, our job is to then consider choices that life has to offer. To make good choices. To factor cost into our choices. And to know that we don’t get everything we want, that we don’t necessarily benefit from ‘having it all’, and that we’re successful when we learn to compromise and maintain healthy perspective on money issues.
Besides, one day, the Bank of Dad will close, or at least significantly reduce its operating hours, and the kids will be adults earning their own way and responsible for making their own money related decisions. And if I can help them along the way, encourage them to weigh the pros and cons of an intended purchase, and reflect upon how each purchase ties into their personal values, then I’ve done my job well.
Down The Line
I have two theories as to why older adults, those +70, avoid money talks with their kids. First up is the money taboo, ingrained, not changing. Second is the fear of mortality. The thinking goes something like this: ‘if I talk about my will then I’m talking about my own death and that’s just too much for me to handle because I don’t want to believe I’ll die’.
From a nuts and bolts viewpoint, if you want to minimize stress and headache for your kids, then find a way to look mortality in the face. Because, like the song goes, ‘we’re here for a good time, not a long time.’ And when we get our house in order in preparation for our unavoidable departure, we’re doing our kids a huge favor.
Once kids know approximately how much (if any) money they will receive as beneficiaries, they can plan how to make use of these funds. That said, there’s the common concern that some kids will place their lives on hold, waiting for an inheritance. Or that an unequal distribution among the kids will cause resentment and family discord. These are real concerns, no doubt. And that’s where open discussion comes into play.
It may be tough having talks like this, for parents and children alike. But hey, that doesn’t mean they shouldn’t happen. The talks serve to remove the destabilizing element of surprise, give voice to all concerned, clarify issues, and support realistic expectations all of which make for a smoother transition of wealth from one generation to the next.
So all you parents out there, me included, know that the responsibility to talk with your kids about money remains until the sun sets because the job of being a parent isn’t over til’ it’s over.