WHAT KIDS DON'T NEED TO KNOW ABOUT THEIR PARENT'S MONEY
Teaching kids about money is very important if you want them to be as responsible as possible with their finances and avoid debt. You want to do what you can to help pave the way for a life filled with monetary triumphs.

However, when teaching your kids about finance, there are certain topics that should be eliminated from your lessons. In addition, it is important that you do not associate the emotions involved with money and money issues to kids. It will be too much for them handle, leaving them beleaguered and confused.

Below are some ideas as what money information/teachings you should avoid discussing with your children.

How Much Money You Earn
Your child will most definitely ask you this question sooner than later. Expect this inquiry when they are very young. You won't want to disclose the exact amount of your income because there is absolutely no advantage to them knowing this info, and depending on their age, they may have no understanding of the number you tell them anyway. You can tell them you earn $100/week and that may seem like a tremendous amount to them. Think about what their reaction would be if you told them your actual salary of $40,000 or $250,000 if you are better off. They will likely think the family is rich no matter which number you tell them which may equate to a false idea that there is money to burn and also them asking for more expensive toys and goodies in a more frequent interval.

What the conversation should be: Instead of disclosing the information they are requesting, let them know that you earn enough money to take care of the family, put food on the table and pay all the bills. This info will let the child know that you guys are financially secure. You can still sneak a lesson in by discussing various potential career options they might find interesting and what those earning possibilities are.

When should the conversation be the truth? It is likely that your child will ask you this information several times while they are growing up. Is there are time when you should actually tell them the facts? There are several variables you will need to consider when making this decision: age of the child, maturity level and most importantly, why do they want to know this?. Since you know your situation and your child best, it will be your judgment. You don't even necessarily need to disclose an exact number, but instead a range will be sufficient. Another lesson can be sneaked in...let them know the hard work and dedication you put in to achieve your financial situation.

What Amount of Debt You Encompass
It is important that your children are aware as to what debt is and how one accumulates debt. They should also be taught the consequences of having too much debt as well as the rewards of minimal-to-no debt. You can let them know the family has debt, but the exact amount of debt you encompass is not a necessary disclosure.

What the conversation should be: You don't want your kids to worry about your debt. Especially if you have serious debt issues that cause you stress. Think what it will do to your young children...even your teenagers. If they think $30,000 is a ton of money, then they will surely feel that $10,000 in credit card debt is scary. Also, if you have student loan debt, them knowing that you are still paying those off as an a adult may discourage them to want to succeed with their education. They may think 'what's the point since mommy is still paying off her student loans?!'.

Another angle regarding debt to consider keeping to yourself is if you guys are having serious financial issues and can't pay your mortgage and/or car and are facing foreclosure/repossession. This info will cause serious stress to young ones. You want your kids to always feel that they are being taken care of by mommy and daddy all of the time. 

So, instead of discussing the families personal debt situation, use the opportunity to teach your children about debt. Teach them all that you can about managing debt and what they can do to avoid debt. This site offers a nice variety of links to sites that offer assistance in teaching kids the various topics related to debt. 

When should the conversation be the truth? There really is no situation where kids need to know precise amount of debt the family has. However, if your children are adults and you anticipate them taking care of you monetarily in the immediate future, then they should know the situation so that they can plan.

How Much the Family Has In Comparison to Others
Of course your child will be aware of the fancy sports cars in the neighbor's driveway or the flashy clothes their friends wear. Kids are going to notice the things that they do not have, that they wish they did. It is important that a topic like this is not something that you guys discuss as a family. Doing so can make your children feel insecure and inferior. It may even make them angry with you since you can not provide for them in the same manner. On the flip side, if your family is well-to-do and can afford the finer things that life has to offer, your child may feel like they are better than their peers.

Regardless if your family is wealthier or poorer than others in your lives, making comparisons is likely going to make kids want to keep pace with others. And as a result, they will likely further this problem into adulthood and cause monetary issues for themselves.

What the conversation should be: So, the best way to answer the questions of 'why can't we get that?' or 'why don't I have that?' is to not get mad or come up with apologies and/or excuses. Just let your child know that everyone likes to spend their money differently. Keep this conversation targeted on your family and not other families. Doing so will help your children do the same mentally beyond this 'talk'. 

When should the conversation be the truth? Is there ever a time for you tell the truth? No. There is absolutely no need for you to compare your family to anyone else. You want to instill appreciation for what you have to your kids.

Your Investments
Most adults are not fully knowledgeable as to how investing works, so kids definitely won't understand which may result in your child becoming inundated and believe that money is not only boring but even worse, something that is confusing.

What the conversation should be: A smart route to take is educate your children about money and finances gradually. You'll want to progress the topics as your children grow and become more mature. You can begin with teaching very young kids about how people earn money. Then proceed to budgeting and saving and then on to debt and credit and lastly investing.

When should the conversation be the truth? When to discuss each with your child will be your judgment.

Significant Monetary Losses
There are always going to be swings good and bad related to the families well being. However, the losses should not be discussed with your kids. As mentioned above, you want your kids to always feel secure. Discussing a pay cut or big loss in the stock market can cause un-needed stress onto a child. And for obvious reasons, never say anything like 'how are we going to pay for their college now?!'.

Instead of creating panic, just say something like 'we are going to look to save some more money nowadays and therefore we will be cooking dinner at home more and renting movies instead of going to the theatre.'.

When should the conversation be the truth? Determining when to tell your child the actuality of the situation will again be up to your judgment. You likely will want to wait till at least your child is old enough to work. So, they can not only start saving for college but can also begin to research student loans for college.

Educating Teens About Debt - Equally important to managing money, teens need to be familiarized with how debt works.


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