Talking money with your kids

[jdd2]

I've read various articles about what to say when your kids ask questions about money--how much do you make, are we rich/poor, how much does X cost. etc.

So it's tax time, and our older daughter (25), and I have again been trying to get some paperwork together and done. This is not for here, but for the IRS (which should be known as the International Revenue Service), and the other thing, the required FATCA reporting.

While her taxes are done automatically here (if you have a single source of income, your company handles it all), I have a CPA that does my US stuff, and who tacks on her US return for a minimal fee. But for that I need the local equivalent of her W2, and for the FATCA thing, you have to list max account value for bank accounts for a given calendar year. (other assets too, but that's not applicable to us)

Anyway, while I haven't shown her savings, she has seen to the penny what I've made for the last year or two. And will again soon. She seems responsible enough, tho even if she weren't I'm not sure there'd be many negatives about showing my income. And since she's showing me hers (has to, really--both income and max bank balances), it seems like the quid pro quo is a matter of course.

My wife and I also keep track of monthly expenses (food, utilities, etc), and we've looked that over and talked about it, too. While that doesn't track everything, with a little A minus B, she's probably got an eyeball sense of what I might have left over.

Tho not yet, I've also wondered about showing her savings in order to prep her a little for possible estate/inheritance issues, so that she doesn't have to at that point learn about, comprehend, and help manage that on the fly.

OTOH, our younger one is still in uni, and doesn't know a thing about all this.

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So back to the initial Q--do you talk money with your kids? Anything like this? Something different?

[brucemacneill]

We never tried to keep finances a secret. I don't think our son ever asked if we were rich or poor but he knew when things were good and when they were not so good. My pay stubs probably sat on the table until they got filed so he could see them if he looked but I don't remember him saying anything was a kid. Now, he knows all the estate stuff since he's the executor if we both die.

When I was a kid I had no concept of money and I figured he'd be better off knowing more about it than I did growing up. I don't see a reason to keep it secret from your kids but I wouldn't give them your credit card or check book.

[RickW]

Same here, Bruce. We talk about it a lot, a we are helping them with university, but they are expected to contribute and do what they have to to get by. So, they know how much everything costs, and have definitely known when times have been good and bad. The eldest is reasonably savvy - but she came to use at 18, and was already relatively frugal. She doesn't value goods that much, and has little debt, and some savings. The little one is extremely frugal, hates spending money, always looking for deals. Middle one is a bit more spendthrift, but she is in first year university, has a job, has a budget, and is doing pretty well by it all.

It's all something they need to know, sooner rather than later.