Do you tell your kids exactly how much you make?

[Anonymous]

Anonymous wrote:Please teach your kids about finances. You can't do that without disclosing the details of your income. My parents did and I was able to put into perspective what it cost to have the type of lifestyle I wanted (we were upper middle class). So many people I grew up with had no concept of how expensive it is to simply live, let buy a home, travel, have kids etc. Without an understanding of what income it took, good or bad, to give them the lifestyle they grew up with, you're setting them up for failure.

+1. I plan to disclose more finances (e.g., savings, mortgage, salary, etc), once they are in high school. Now they are in elementary school and we talk about the price of clothes, vacations, weekly groceries, presents, and day-to-day stuff etc. I really can't imagine letting my children enter the "real world" without a "real understanding" of how much things cost. Plus, as my parents always noted, you need to disclose income to a variety of strangers: IRS, scholarship people, etc. Why do strangers see your income and not the people you have to financially educate?

[Anonymous]

My kids are in elementary school and I mention how much things cost and say things are too expensive or aren't in our budget. They both have savings accounts and have savings goals and things they want to buy.

As they get older, I don't think I'd tell them exactly how much we make. I'm not sure how that's relevant. The point is however much you make, you better be living within your means and planning for your future. So I agree the way to go is to give them practical life skills about what it means to have a budget, make good decisions, have saving habits, have a realistic idea what things cost, etc.

[Anonymous]

We never told our kids how much we made but we put a lot of emphasis on the value of a dollar, savings, and buying smartly. We never lived to our incomes but we lived comfortably. Eventually my DH became the CEO of a public company so his income was available for all to see but I'm not sure my kids ever looked it up. But, they are smart enough to know he was making a lot of money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No. Kids can't handle it. They will disclose.

We give our kids a general idea that we do well enough to afford a nice house, but we have to save for college and vacations, etc. I actually have a lot in savings, but don't want them to know we are well off.

I plan on disclosing financial info to them after they are in their own career in their 20's. That's when my single mom went over her finances with me- for will and estate purposes. That was the right time I think

As PPs noted, explaining expenses is more useful. I've told my elementary school kids that the mortgage is $4000/month. The car cost $30,000. We're saving for a trip to Disneyworld that will cost $10,000. and that without a college degree, they may end up working at McDonalds or retail for $15/hour, or $2400/month which isn't even enough for a cheap apartment, food, clothes and bus fare. so I tell them, their job is to do well in school.

If you have that kind of income, can't you easily go to Disney for a trip? We make less than you and could easily pay cash for a trip to Disney no issue but our mortgage is 1/2. That's a pretty grand trip for Disney. We've gone 10 days several times, including a cruise and never spent that much. $4k on a mortgage is high and then to turn around to tell them $15 an hour, which isn't minimum wage everywhere is setting them up big time.

Its not useful if you have a grand lifestyle as kids will not get it at a young age.

[Anonymous]

Anonymous wrote:I don't think they need to know totals. They need to know about saving and investing. They need to know about how much things cost. They need to know that we have enough money to do x & y, but maybe not luxurious z.

My blue collar parents never shared any income or wealth totals...even now they don't share. They've alluded that they can cover their long-term healthcare costs, and they opened 529s for our kids, which they contribute about $5k / year each.

Agree

[Anonymous]

My kids are toddlers so not yet! My parents never told us how much they made but my Dad had very big jobs running some well known companies. When they built a beautiful vacation home I realized they had done very well. When grandchildren arrived and they funded 529's for each baby for $100,000 I was stunned. But when we're growing up we lived in a nice neighborhood, went to public schools and took one nice vacation a year but never lived like 1 percenters.

[Anonymous]

no.. and my HS kids have asked. I think the numbers are too big for them to put into context. We make 600k but tell them they cannot have a $50 video game or why I restrict . Actually sometimes I cannot even justify it to myself . Some times things slip. They see we give $x to church, which is roughly 10% of our income. They see how much we spent on Hamilton play and dinner out beforehand. I can see the gears spinning in my oldest' head. SHe has already asked if we are rich. We teach them how to manage money and high level percentages, like PP mentioned. They already understand our values and how we view money; and we may disclose more as they get older.

Also we have a lot of relatives in rural areas. our kids have already asked why we don't just give them money, when their families cannot make ends meet.

[Anonymous]

For us the focus with high schoolers hasn’t been so much the exact HHI (though we’d share if asked – they just haven’t), but over time it’s been talking about how much the life they are accustomed to/want post-college costs and how much various jobs pay ballpark range. They understand that right now the luxury one bedroom apartments in the city are going for 2400+; a new sedan will be 20k+; they realize that between taxes + 401ks and insurance, you basically bring home ½ of whatever a stated salary is. It has caused both of them to narrow down to career fields like med, law, finance, engineering where they’ll be able to maintain the life they want.

I know this wouldn’t work in all families – and I know many of my friends look down on it bc they have views re pursuing one’s passion; if you love what you do the money will come etc. etc. But reality is it works for our kids bc I know they would not be happy at a non profit or wherever even if it was an area that they were passionate about if it meant a dumpy apartment or no vacations or not being able to drop $500 shopping etc. Both of them are the kind of kids who need to chase the money – at least until they are financially established – in fields they like/that make them happy enough, even if they aren’t jobs they absolutely LOVE.

[Anonymous]

Anonymous wrote:My kids are toddlers so not yet! My parents never told us how much they made but my Dad had very big jobs running some well known companies. When they built a beautiful vacation home I realized they had done very well. When grandchildren arrived and they funded 529's for each baby for $100,000 I was stunned. But when we're growing up we lived in a nice neighborhood, went to public schools and took one nice vacation a year but never lived like 1 percenters.

I feel the same way! Last year my DH and I had an opportunity to buy a foreclosure for a steal but the terms were cash in 7 days which was a non-starter. I mentioned it to my Dad and he had the whole purchase price wired to me the next day. Crazy! I knew he had done well but he never talked about it. We did pay him back when we sold our house!

[Anonymous]

Yes. Our 12yr old is involved in all financial planning, and is part of our monthly "state of the union" he knows how much we make, our debts, our investments, and our expenses that we track at the most tedious granular level.

I will tell you, we make just over 500k. He has been going over his Christmas list and was cringing when he told me he really wanted a laptop, but knew it was way too expensive a gift. His main list of things he wants totals about $350. He is very well grounded in what is appropriate spending and absolutely loves tracking our investments. He has been worried about our 401k performance as of late and that has caused him unnecessary worry. We do try to explain the cycles to ease his fears, but he will eventually see the cycle himself.

They had a personal finance unit at school and it was basically so far below his literacy level even he was laughing about it. I'm very confident our approach is right for our kids.

Our 9yr old is not involved, though, he will be once he turns 12.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No. Kids can't handle it. They will disclose.

We give our kids a general idea that we do well enough to afford a nice house, but we have to save for college and vacations, etc. I actually have a lot in savings, but don't want them to know we are well off.

I plan on disclosing financial info to them after they are in their own career in their 20's. That's when my single mom went over her finances with me- for will and estate purposes. That was the right time I think

As PPs noted, explaining expenses is more useful. I've told my elementary school kids that the mortgage is $4000/month. The car cost $30,000. We're saving for a trip to Disneyworld that will cost $10,000. and that without a college degree, they may end up working at McDonalds or retail for $15/hour, or $2400/month which isn't even enough for a cheap apartment, food, clothes and bus fare. so I tell them, their job is to do well in school.

If you have that kind of income, can't you easily go to Disney for a trip? We make less than you and could easily pay cash for a trip to Disney no issue but our mortgage is 1/2. That's a pretty grand trip for Disney. We've gone 10 days several times, including a cruise and never spent that much. $4k on a mortgage is high and then to turn around to tell them $15 an hour, which isn't minimum wage everywhere is setting them up big time.

Its not useful if you have a grand lifestyle as kids will not get it at a young age.

Yiu are weird. Why are you so worried if she spends 10k at Disney? This is easy to burn theough at Disney.

Oh and we are taking a Disney cruise next month. It is costing our family of 4 12k. This does not include our flights to Miami, which are 2,290 (Christmas rates) and 2 nights hotel in Miami.

[Anonymous]

OP here. Thanks for all the great insights and advice! This forum has been really helpful over the years.

My oldest (9 yo) asked point blank how much DH and I make, and while he's mathematically savvy, I don't think his maturity is quite ready for the truth. I deflected at the time, but I think I'll go back and talk about our 401ks, Roth IRAs, etc. It sounds like the early teens is a good time for the financial full monty.

[Anonymous]

Anonymous wrote:Yes. Our 12yr old is involved in all financial planning, and is part of our monthly "state of the union" he knows how much we make, our debts, our investments, and our expenses that we track at the most tedious granular level.

I will tell you, we make just over 500k. He has been going over his Christmas list and was cringing when he told me he really wanted a laptop, but knew it was way too expensive a gift. His main list of things he wants totals about $350. He is very well grounded in what is appropriate spending and absolutely loves tracking our investments. He has been worried about our 401k performance as of late and that has caused him unnecessary worry. We do try to explain the cycles to ease his fears, but he will eventually see the cycle himself.

They had a personal finance unit at school and it was basically so far below his literacy level even he was laughing about it. I'm very confident our approach is right for our kids.

Our 9yr old is not involved, though, he will be once he turns 12.

I can't with this post. Where to begin.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes. Our 12yr old is involved in all financial planning, and is part of our monthly "state of the union" he knows how much we make, our debts, our investments, and our expenses that we track at the most tedious granular level.

I will tell you, we make just over 500k. He has been going over his Christmas list and was cringing when he told me he really wanted a laptop, but knew it was way too expensive a gift. His main list of things he wants totals about $350. He is very well grounded in what is appropriate spending and absolutely loves tracking our investments. He has been worried about our 401k performance as of late and that has caused him unnecessary worry. We do try to explain the cycles to ease his fears, but he will eventually see the cycle himself.

They had a personal finance unit at school and it was basically so far below his literacy level even he was laughing about it. I'm very confident our approach is right for our kids.

Our 9yr old is not involved, though, he will be once he turns 12.

I can't with this post. Where to begin.

It was pretty funny. Fortunately, it’s a gag.

[Anonymous]

No. We taught them about finances, how to budget, the importance of savings, ...But they don't need specific salary information. They were taught that it's super rude to ask about salary.