This Father’s Day, you may want to spend some time with your kids having a family conversation about money and values. If this makes you feel a little uncomfortable, don’t worry — you’re not alone. Many parents feel uneasy talking with their kids about the family’s finances.
“But once we talk to the kids about money, it will be like opening Pandora’s box. Who knows where the conversation will go?”
Well, first of all, the box is probably open already. Second, it will be soon, no matter what you do. And third, it might be better for you to go ahead and open the box now. When we turn money into a taboo subject, we’re teaching our kids that there is something scary about it, and that we don’t even talk about it. If that’s the lesson we teach our kids, we’re not starting them off on the road to forming a healthy relationship with money.
Here are three suggestions for talking with kids about money and, perhaps, just as importantly, ideas for acting consistently with what we say.
Rule 1: Money is like sex
Just as with sex, when it comes to money, kids know more than we think they know. But they’re probably confused about what they think they know. Most of them will figure out money eventually by watching adults. Or they’ll figure it out from their friends who have either sorted things out themselves or observed their own parents.
But while kids may know more than we think they do, they’re often confused about what they think they know. That’s because, irrespective of their age, kids often don’t have the right context to make sense of what they know.
Rule 1 should help us get over any delusion that we can keep our kids in the dark about everything. And it also helps us to define one of the tasks ahead of us. We want to help our kids begin to create a context for their knowledge so that their knowledge is helpful and empowering, not dangerous or frightening.
Rule 2: Think before you talk
Determine your own values about wealth before you discuss money with your kids. Many parents have a fairly clear sense of the values that they’d like their kids to develop with respect to money, but they may be less clear about knowing what their own values are. Therefore we need to be honest with ourselves and examine our own values about wealth.
It’s one thing to say we want our kids to understand that material possessions are not the source of happiness and fulfillment. But if our own lives are driven by conspicuous consumption, our kids will quickly come to see that the values we say that they should develop are not aligned with the values that shape our own behavior.
Kids are the most sensitive lie detectors on Earth. If there is a discrepancy between what we say and what we do, they’ll be quick to see it. The more clear we are about our own values before we talk with our kids about money, the more successful we’ll be in managing the conversation and delivering a message that is consistent with the way we live our lives.
Rule 3: Talk with them, not to them
“Mom? Dad? Are we rich or poor?” Are you worried about being asked this question by your kids? Well, now you can look forward to it because it gives you a chance to engage your kids in a conversation about the meaning of money and happiness.
You can ask your kids, “What makes you the happiest? What makes you the saddest? Does any of that have to do with being rich or poor?”
You may want to say something like this to your kids, “Rich means different things to different people. It means some things that we measure with money and other things like having a happy and healthy family that can’t be measured with money and that no amount of money can buy.”
“As far as money goes, we are fortunate to have enough to buy all the things we need and many of the things we want. And we have enough money to take care of you, so that you don’t have to worry about money. So many people would say that we are rich.”
It’s best to be honest. We make so many sacrifices for our children, and we devote so much attention to giving our kids the best opportunities we can. If we neglect having ongoing conversations about money and values, we are denying our children an opportunity to think about how their values drive their actions.
This Father’s Day, see what your kids have to say about the subject of money. What they say may surprise you.
David Enemark, CFP® is a Family Wealth Advisor at Morgan Stanley who specializes in helping families achieve financial security both for themselves and future generations. Now that his newborn son is finally sleeping through the night, David is once again riding his mountain bike whenever he can.