‘Are we rich?’ Kids want to know
“Are you rich,” the 8-year-old asked me, which in rapid-fire fashion was followed by “how much money do you make?”
Say again sweet pea?
Kids often think in concrete terms, so it’s not surprising that many of the questions they ask about money involve cold hard cash. Adults, of course, take money for granted and don’t have the same sense of wonderment. They’re also often thrown off guard by these types of personal questions that can come out of nowhere, and their natural response is to ignore them.
That’s a missed learning opportunity. In my case, I’m not sure what triggered the questions from my nephew’s daughter during a recent vacation visit to the family cottage. But the questions popped right after she took a quick tour of the cabin and noticed there were two full bathrooms, three bedrooms, and four burners on the stove.
While I could have dodged her questions, I took a breath, then asked why she wanted to know. That was a trick I learned long ago from interviewing a financial pro about kids and money topics. Although I didn’t get a clear answer, that strategy bought me some time to rebound and respond.
I briefly explained I made enough money to pay the bills, cover the trips for groceries and pizza and keep the lights on at the cabin. I also briefly explained that I got my money from working. Her curiosity was satisfied, plus I didn’t have to share my bank statement.
Whatever the age, your kids at some point will ask you about your personal finances, the role money plays in your household, and how the economy works. Depending on their age or maturity, you can respond as deeply as you want. For example, how would you respond if your grade-schooler wants to know if “we’re rich or poor.” As in my situation, the best starting point may be to ask a question of your own. Why do you ask?
You might discover that kids have been running around in the neighborhood bragging about how their family has a lot of money. Your youngster may really want reassurance from mom and dad that the family has enough money to put food on the plate and a roof over his or her head.
To satisfy your child’s curiosity and to alleviate any worries, you could start by saying you’re somewhere in the middle — there are people poorer and people that are richer. Then explain that you have enough money to pay for food, clothing, housing and all the other things the family needs.
With older kids, you could use this as a chance to talk about family values about money and the different priorities you might have than your neighbor. For example, you might point out that your family chooses to go on nice vacations filled with lasting memories rather than buying a new car every two years.
Should you share your paystub with junior? No, you don’t want your salary blathered all over the neighborhood. Rather some experts suggest shifting the discussion to explain how the value of education, different career paths, hard work, and just plain luck all play a role in determining financial success.
Most kids become aware of money at a very early age, so be prepared!