How Much Should I Tell My Kids About My Finances?

I would bet everything I wish had in my bank account that my kids think my husband, Peter, and I are rich. At 10 and 8, my girls know money doesn’t grow on trees—they see how hard the adults in their lives work and know things (most things) are “expensive.” (They know this because they hear us say the word so much.) Still, Peyton truly thinks that every time we leave the house we’ll buy her something. And Addyson really has no idea how much, say, $100 is worth or how long it takes to make that amount of money.

As their parents we blame ourselves. We all know it’s wise to start talking to kids about finances from a young age, and it’s no secret that financial literacy is crucial. (In fact, I wish Peter and I had learned more about it when we were kids, teenagers, in our twenties and in the first 11 years of our marriage.) But when it comes to our own bank account, do our school-aged kids need to know we’re mortgaged up to our eyeballs and never, ever in the black?

“I made so many dumb financial choices when I was a teen and young adult because I simply didn’t know any better. Who actually pays off credit card balances in full, right? Personally, I have a lot of respect for kids and their ability to process information. They almost always understand way more than we give them credit for,” says Kira Vermond, a journalist and the author of The Secret Life of Money: A Kid’s Guide to Cash. “So I don’t think it’s an issue to use your own family’s financial situation as a learning tool for your kids. Hey, it’s not like they don’t know the jig is up if their parents always seem to be stressed out about money.”

That said, says Vermond, it’s important to take kids’ ages into consideration. “No five-year-old cares that your home-equity line of credit is growing, or that you’ve invested in a tax-free savings account. Kids that age are trying to figure out the difference between dimes and quarters.” But once your brood hits double-digits, Vermond is all for getting them involved in the family’s cashflow. “I don’t think it’s weird to have them come sit down beside you as you pay bills online or pay off some debt. These are real-life examples that money borrowed must be paid back—even if you don’t feel like parting with the cash,” she says. “Watching your bank account dwindle after paying off a big credit card will leave an impression. In a good and realistic way.”

Originally published in the Winter 2018 issue.