How much do they need to know?
July 1, 2014 7:53 PM   Subscribe

We have two kids who are 12 and 14. From an emotional/psychological standpoint, how much or how little should they know about some minor, but real financial difficulties that we have as parents?

We recently hosted a religious coming of age party for one of our children and had my parents pay for the whole thing (several thousand dollars) because we didn't have money for that just laying around. I told my kid to write a thank you note to my parents for helping make the day even possible, and my father was very upset. He said that children should not be made to feel that their parents can't financially provide for them, in whatever way, as it would make them insecure. Is there anything to that notion? I thought nothing of telling the kid that grandma and Grandpa paid for the event. Thoughts about divulging financial shortcomings to kids?
posted by teg4rvn to Human Relations (33 answers total) 3 users marked this as a favorite
Oh absolutely, tell kids when others pay for things so they can practice expressing gratitude but this might be a cultural/generational thing, so ask first about how they'd best like to be appreciated in future.

On your minor but real financial woes: talk about careful financial planning, practice money skills with kids, talk about a budget, but don't share any worries, concern or anything else you have about money with kids. Don't give any sense that everything is going to be anything but perfectly fine. My Mom gifted me with terrible anxiety about money by sharing her anxiety about money with me. My family was just fine but like yours had to budget and take care at times. Don't give your kids this load to shoulder.
posted by arnicae at 7:59 PM on July 1, 2014 [4 favorites]

I was around 14 when my mother said that we might have to move because we couldn't afford to live in our house anymore unless I got a job. (This is how I remember it anyway.) That's obviously much more pointed than what you told your kids, but it worried the hell out of me and I felt anxious for years. I remain paranoid about money as an adult. It's probably not altogether a bad thing, since it means I'm a bit more prudent than I might otherwise be. But still.

Saying that Grandma and Grandpa paid for something special and should be thanked doesn't have to involve "because we have real financial problems" though. Are you having trouble keeping a roof over your head and food on the table? If not, I wouldn't worry them.
posted by Athanassiel at 8:01 PM on July 1, 2014 [12 favorites]

I think so much of this depends on the emotional tone of the disclosure. I remember, growing up, some kids literally bragging that something was so expensive their families couldn't afford it. Just because of their confidence in their families just naturally being fine and right, it made the other kids, whose family had bought this thing, feel embarrassed and not as cool.
In this case, the message can be that you didn't have thousands of extra dollars but how nice that you have a supportive extended family to lend a hand. If the message is cast in a positive and calm light, it should be comforting -- that you are in a caring extended family network -- while still being realistic that you aren't rich.
posted by third rail at 8:04 PM on July 1, 2014 [4 favorites]

I think letting the kids know is healthy - and having them write thank you notes is important. They don't need to know the hard numbers, but in my opinion showing honesty about any financial issues that will impact them can only help them be more financially responsible as they grow up.

I noticed you posted a prior question about your parents' issues with you talking about their finances - is it possible this blowup was an offshoot of this issue, and nothing to do with your telling the kids per se at all?
posted by Mchelly at 8:07 PM on July 1, 2014 [1 favorite]

I don't have an answer for you on what they SHOULD know, as each kid is different. Maybe someone with kids or a psych background can help on this part. All I can tell you is what I experienced.

I grew up knowing a lot about our financial situation from around, maybe 10? I knew my parents couldn't afford huge things. We always had old cards. We often shopped sale racks and thrift stores. I started to know more and more as my parents marriage got worse and they split. By the time I was 15 it was just me and my dad. At 16/17 was contributing to the household income with my after school jobs. Being able to contribute helped me feel like a working member of the family and I was proud to bring in my paycheck and help.

I knew how much life cost and how much I could spend on clothes. I knew what rent was, how much electric was, how much groceries were, and that my paycheck helped.

Because of all that, I'm pretty damn good with money now. I know what it's like to struggle. Things were even more transparent when applying for college and managing student loans and buying books.

Was it stressful sometimes knowing that we were tight on money? Of course. But I would have felt that stress even without knowing what the bank account balance is. Kids, especially teens/pre-teens can understand more than you think and I bet the "we can't get that now" gives them a hint.

It helped me know how to live during college and after. How to budget and plan. And now that my husband and I are bringing in a decent amount of money, we know how hard we have to work and where it all goes. We understand how much goes to bills and what can be fun, and what should be saved.

So, I say at a bare minimum they should start understanding the family budget. Whether that means you tell them how much you bring in is up to you, but they should know how much things cost. But hey, that's what worked for me. I enjoyed my background even if things were tight, because I knew my dad was doing his best. Being able to have transparent money discussions with my dad really prepared me for adulthood.
posted by Crystalinne at 8:08 PM on July 1, 2014 [6 favorites]

In general, I think it is good to help children understand that money is not an infinite resource. To that end, explaining that you cannot afford every whim and luxury, and that you have to make decisions about how to spend your money, is a good thing to do. So maybe you cannot buy another $70 Lego set every time you go to Target; you have to decide which one you want the most and save up for it. This is basic financial literacy, and it is really important that kids learn this.

Sharing financial difficulties (i.e., the inability to provide necessities) can really be a burden for kids. They don't ask for things they need or small things that they want because they are worried about the cost. I would avoid this to the extent possible. Being able to shield your children from this is a luxury of a sort in and of itself.

Telling your kid that their grandparents paid for the party is not sharing the kind of financial difficulties that would make things seem disconcertingly unstable for a kid. However, you have the choice to frame it as "grandma and grandpa love you and wanted to give you this fantastic gift" or "we have financial difficulties and so grandma and grandpa had to pay for your party." The former is obviously much preferred. "Making the day even possible" seems to edge into the latter territory, and it is probably more information than a kid needs.
posted by jeoc at 8:10 PM on July 1, 2014 [9 favorites]

He said that children should not be made to feel that their parents can't financially provide for them, in whatever way, as it would make them insecure. Is there anything to that notion?

Based on my personal experience, your dad is right. Your kids can't provide for you (at least not now, and maybe not ever), so telling them about ways you can't provide for yourselves is needlessly stressful for them.

A party is kind of borderline in terms of "providing for yourselves or the family," but since this particular party sounds like it was a right of passage rather than just some random fete, it therefore likely felt and genuinely *was* necessary in a way that parties generally aren't. I do think that saying that you can't afford it, rather than that the grandparents *wanted* to throw it for him, was *slightly* over the line. But in general, I think that the line is, if something seems like it isn't actually a luxury, it's something that you have to buy (especially if "have to" isn't limited to just the necessities of life but is expanded to include the expenditures necessary to participate in your community/family/culture, which, personally, I think is a fair definition since nobody can live by bread alone), then you shouldn't tell or even hint to your kids that you can't afford it.

Telling and showing them how to manage money (as in, their money) or ways that they *can* help the family is generally a good thing, though (managing money is a practical and psychological skill).
posted by rue72 at 8:33 PM on July 1, 2014 [4 favorites]

I think that there is a happy medium. You don't want them to feel insecure, but I think it's healthy and normal and nice for them to thank their grandparents for a generous gift.
posted by radioamy at 8:40 PM on July 1, 2014

Based on this prior question, I'd say your dad is a bit of a kook when it comes to money, and you'd be better off ignoring him.
posted by selfmedicating at 8:53 PM on July 1, 2014 [6 favorites]

My first thought was wondering how your kids will develop money management skills if you hide your financial life from them. They're both definitely old enough to get involved with the finances.
posted by zug at 9:18 PM on July 1, 2014

My parents NEVER told me when there were money problems, and when it finally came to a head my sophomore year of college, I was completely blindsided when they suddenly asked me to take on an utterly miserable job to help pay my way. I also have no idea how to handle money problems, because it was never modeled for me, and right now I am in debt and scared out of my mind about it. I am therefore in the camp of "tell your kids, have no shame, and model the mindsets and problem solving behaviors that will serve them well later in life". Your dad is projecting right now. Ignore him.
posted by Hermione Granger at 9:49 PM on July 1, 2014 [9 favorites]

My parents were never very well-off, I knew this, but it wasn't ever discussed. As a teenager I stopped asking for things because I assumed that we couldn't afford them. In Grade 11 I turned down an offer of a foreign exchange place without even telling my parents about the offer, because I thought we would not have the money for airfares and so on. Years and years later, this came out, and my mum was (still is) very upset and insisted that if I had wanted to take it they would have found a way to make it happen (like selling a car or one of them getting a second job, or asking my grandparents to contribute).

So my advice is, tell your kids, but don't just tell them once - be open about the discussions, and be open about the trade-offs and involve them in the decisions where you can. You're teaching them valuable skills, and to prioritise spending towards things that really matter.
posted by girlgenius at 10:21 PM on July 1, 2014 [2 favorites]

I think it is absolutely essential to let kids this age know about just how much it costs to run a household. While you don't have to disclose your earnings, you should probably start discussing mortgage, insurance, grocery, clothes, utilities, insurance - the works.

It will help them make good decisions as soon as they leave home. I think we learned about this stuff in Grade 9 (14 years old) when I was in school, so they are ready.

I am not sure if I would paint this as "financial difficulties." The goal really is to explain how much it costs to run a household.
posted by KokuRyu at 10:26 PM on July 1, 2014

I'm going to have to go a tad against the grain here.

We have ALWAYS been very low income. It has NEVER been a secret. The phrases "No, we cannot buy that [random thing at the store] because we cannot afford it", "we'll need to save up if we want to do that" and "we need to choose between [thing #1] and [thing #2] because we can't afford both" are words my children have been familiar with pretty much since the day they were born.

However, because we DO carefully save for fun things, including vacations, video games, extracurricular activities and the like, they do not feel deprived and they've learned to be careful with their belongings, appreciate what they have, work hard for things they want, and never expect something to just be handed to them. I've also [literally] never, ever had any of my [four] children - now ages 18, 16, 14, and 12 - have an "I want"-style meltdown.

We HAVE experienced some pretty severe hardships at times financially, where things were very close - and they were aware of this. Even when our landlord was foreclosed on, and we spent two months homeless, sleeping on couches and floors, with all our belongings but a rubbermaid tub of clothes each, and our school stuff, in storage, they weathered it well. They know that we are a family, and so long as we have each other, nothing else matters - certainly not mere things.

If kids are living in a la-la land of everything is always just fine and dandy and there's always enough money to go around:
1) that IS spoiling the X out of them,
2) they're NOT getting a real view of the world, and
3) THAT is what is going to screw them up, both a) if things go wrong at some point while they're with their parents, and b) as adults on their own.
posted by stormyteal at 11:07 PM on July 1, 2014 [14 favorites]

My parents had serious financial issues when I was about 9/10. My mother was pretty honest with me about it, the potential consequences, and also about the stress it was placing on their relationship. On one hand, I appreciated the honesty, so that i knew what was happening. On the other hand, it's given me a number of neuroses about finances, particularly with regard to my parents giving me anything or spending money on me as an adult. I think there's a fine line to walk with making it clear to your kid that your money is not infinite and that proper money management is important, and making your kid feel guilty/anxious/etc about it.
posted by olinerd at 2:34 AM on July 2, 2014 [1 favorite]

To the question of the party in particular, that feels more like an etiquette concern. Should the kids thank whoever made the party possible? Sure. Do they need to know that their grandparents paid for it? I don't see why it's relevant as long as they're thanking them for the party.

Planting the idea that their grandparents paid a lot of money because their parents couldn't afford it, I just don't see the point of that. What's a kid supposed to do with that information?

To the larger question of should parents clue their kids in on finances, I think there's a good middle line.

I'm a single parent of three kids and I generally frame our finances by using takeout pizza and Chinese food as an analogy.

Chinese takeout is expensive. Pizza takeout is cheaper.

If we are financially okay, I let my kids know it's a Chinese week. If things are tighter, it's a pizza week. If I get a bonus, we can have both.

If things are really tight, it's pizza once this month.

And if I'm saving for a vacation, it's no takeout for a while.

Along with the takeout food analogy, my kids all had part time jobs starting when they were 14 and they learned how to budget their own money.

I think it places a tremendous burden on kids to know their parents are financially struggling when the kids can't do anything productive with that information, but it's fine to give kids a general lay of the land of things we can afford as a family and things we're going to pass on for now.
posted by kinetic at 4:28 AM on July 2, 2014 [1 favorite]

You can make your kids understand that you (as a family) have to be careful with money, without inducing fear or insecurity. If your financial situation requires you to make lifestyle changes, try to let them know what's going on in a way that makes it sound like you are still in control of the situation: "we're not buying a lot of new clothes for school this year, because we're saving the money for other things" sounds better than "we can't aford that because we're broke". (This assumes you're more-or-less in control of the situation, obviously).
posted by mr vino at 5:09 AM on July 2, 2014

I think it's possible to "have it both ways" because that's how I was raised.

I never knew anything about my family's money troubles. What I did know was that my parents were frugal and thrifty and didn't believe in wasting money on luxuries, paying for brands, taking "flashy vacations," etc. They taught me that it was more important to save for the future than to indulge and that spending time together, anywhere, was better than skiing in Vail.

The upshot of all this is that while I learned to be a frugal, fiscally responsible adult myself, I never had any idea that my parents were on a tight budget and couldn't afford things. I really believed they thought that playing Scrabble at home was better than going to Disneyworld (maybe it is! I kind of believe that now!). The luxuries that they thought were important, like music lessons and summer camp, were paid for secretly by my grandparents, but I didn't find out until I was an adult.

I'm a strong advocate for this approach. Even when I found all this out many years later it made me feel... momentarily destabilized. I'm glad I never knew as a kid.
posted by telegraph at 5:15 AM on July 2, 2014 [3 favorites]

My parents were always open about money, but in a matter of fact kind of way, not fraught with emotion.

We would bank our birthday, Chanukah and other gift money with them, they'd write it down in a little spiral notebook. If we wanted something in the store, the answer was always, "use your own money." Then we'd think about it, and decide if we really wanted it enough to actually spend OUR money on it. My sister and I pooled our dough and bought a TV together. The deal was we could watch "Here Come the Brides" to our hearts content. In our room.

From the time I was a little kid, until I was out of high school, both of my parents went to grad school. So we were ALWAYS strapped for cash. As long as I can remember, we'd go to weird places to buy groceries, Mexican baby-food, giant heads of cattle for sale, langustinos. My parents did one of those things where if you bought a side of beef, that they'd include a freezer to store it in. So that freezer sat in our living room at University Village and for some reason at dinner time, friends of my Dad would 'drop in.' So we'd sit at the table, me on a phone book, and Sissy in the high chair and chow down on Paella. One of the students asked my mom, "What are the kids eating?" She said, "langustino." He said, "your kids eat langustino?" Mom said, "Our kids eat everything."

There were weeks when it was a struggle. I remember my mom saying, "I've got $10 until payday, what is an absolute necessity for me to get at the grocery store?" Sissy and I thought about milk, or flour. Daddy said, "Relish." We all still joke about that.

We'd roll into a place like Bob's Big Boy and my Mom would tell us, "Okay, whatever you order can't be more than $4." So we'd know, and we could plan.

My point is, we're all in it together, but it's a fact of life. You have to manage money. It shouldn't be a secret. If you can't afford to buy Air Jordans, you have to be honest about it. "I can't afford to get those for you, but if you mowed lawns this summer, or babysat, or ran a lemonade stand, you could earn the money to buy them for yourself."
posted by Ruthless Bunny at 5:21 AM on July 2, 2014 [2 favorites]

I grew up pretty financially strapped. I mean my parents were always able to provide food, shelter, love, education, occasional vacations, and sturdy economical clothing, but they always struggled to do so. They tried to keep us kids as ignorant of the full extent as possible, but we knew and we could see how it stressed them. It wasn't always easy when my friends had more, but it was also too hard to hide the reality of the situation. My parents often took out "loans" from my grandparents that were never really ever meant to be paid back. This was for important stuff. Somehow they were able to teach us financial responsibility and self reliance while not always being so self reliant. So anyway, to your question, kids know. They see way more than you wish they saw. Your dad is wrong. A family is better equipped to learn from an experience if they know what is going on. They don't have to know all the nitty-gritty details, but be honest with them.
posted by The 10th Regiment of Foot at 5:26 AM on July 2, 2014

How much they should know depends on the kids. One little worrywart who broods needs a different picture than their more happy-go-lucky sibling.

The first thing that struck me here is that this is about their grandfather, not the kids. Presumably you were sailing along serenely, maybe worried about money but not worried that you were Telling Your Children Too Much and Warping Their Childhood. I think you should still be confident you have probably kept the kids properly but not excessively informed and look at what grandfather had to say as being much more about grandfather than about the kids.

Grandfather is worried, chagrined and alarmed that he has been caught paying an important bill for you guys. The bill he paid for was one that creates your social standing in the community more than anything else. It's not about a roof over your heads, bill collectors harrassing you, cutting back on groceries, missing school, going without medical care. It's about a party. There is a big difference between the kids having to know that they might lose their home and the kids knowing that they might not be able to show off the size of their Bat Mitzvah (Or Hindi equivalent, but whatever.) In other words Grandfather wants his grandkids to have a strong sense of entitlement, to presume that of course thousands of dollars will be spent on them to enhance their status.

If your kids have a strong sense of entitlement this majorly will effect their chances of getting into a better university, or getting much higher wages when they work, of being picked for promotion, of getting higher grades for mediocre work, of marrying up instead of vertically or down... Yes, grandfather is right. It's an important thing for your kids to have a sense of entitlement. It's what sets the upper class apart from the struggling classes.

Of course you want to balance that serene and sunny self confidence that they are entitled to the special good things in life with an ability to handle money, good manners, gratitude, realism and resilience. But you are probably doing just fine on that score. You know your kids and tell them what they need to know, I expect. What you've just learned is that their grandfather cherishes and values them even more than you knew. For him it's not just a matter of kids ought to have the big coming of age party, but that his grandkids ought to aim for and get the best.
posted by Jane the Brown at 5:31 AM on July 2, 2014

"Your grandparents love you and were so generous, and you ought to thank them" need never be confused -- by your father or, it sounds, you -- with "That generosity was indispensable because we're up against it."

Your children probably get most of the relevant aspects of your financial constraints, and you should tell them as issues arise, but giving them the bigger picture at this age -- as in, "Here is the problem we face, even though it has no bearing on anything else at the moment" -- is more likely to convince them that Something Is Really Wrong And Another Shoe Will Be Dropping. So just a soft caution about taking the discussion beyond the immediate.
posted by Clyde Mnestra at 5:39 AM on July 2, 2014 [1 favorite]

children should not be made to feel that their parents can't financially provide for them

I can think of little parenting advice I'd disagree with more. Family, to me, is a mutual support network, and even at 3 I'm helping my kid to understand that there are ways we can make each other's lives easier or more difficult. As a very young kid I was aware that money was a finite resource and that my choices could help--my mom got laid off when I was 10 or 11, and I stopped getting school lunches without being asked because I knew a pb&j from home was cheaper. By 14 we were having conversations about different ways of paying for college, and I was very aware of the fact that I needed to pay for most of my own schooling through scholarships, loans, summer jobs, and just plain going to cheaper schools. I'm sure I would have known if my grandparents paid for an expensive special treat. I don't know what my mom's budget looked like, but I knew we had enough to have food and shelter and doctors, but not enough for some school trips.

Did that knowledge sometimes cause me stress? Yes, but my burden was always less than my mom's, and I took pride in the fact that I could help in small ways. As an adult, I'm very careful with money and have been able to help other family members in their turn, and I feel very fortunate to have had a parent who equipped me with those tools.
posted by tchemgrrl at 6:42 AM on July 2, 2014 [3 favorites]

I think these are two separate issues.
1) The grandparents helped Kid have a really awesome party, because they love Kid. Kid should express gratitude (and mean it).

2) Everyone needs to learn to live within or below their means, regardless of income. I know plenty of doctors who live paycheck to paycheck. Kids need to learn that money is not infinite; that you can choose between buying multiple small things or saving up for a big thing, but you can't have ALL the things. Discuss, from an educational standpoint, that it's great to follow your dreams, but "following your dreams" needs to include a plan for how you're going to make a living at it. My parents did a great job of instilling the importance of saving for retirement from a young age, and of being frugal, and it's very much carried over into my adult life.

Also, we were not financially strapped, but we were absolutely given a maximum price for what we could order off a restaurant menu, and we were only allowed to get water for our drink.

That said, I'd be careful how you tell them about actual hardship. When I was little, I internalized things in really weird ways without telling my parents. For example, I used to never call home (literally, not once, not even an "I arrived safely") when I went away to summer camp, because back then there were only collect calls and collect calls are expensive and I was trying to save them money. I'm certain that that took years off my mother's life.
posted by telepanda at 7:23 AM on July 2, 2014

I grew up knowing every detail about the money we lost. I wish i didn't know, because it is such a burden to know all the details of why the money was lost. It's enough to teach them how to handle money responsibly, because that was something i was never taught. I was told about the problems, but never how to manage or solve the issue.
posted by aivilo91 at 10:10 AM on July 2, 2014

I want to add that I get your dad's point, because just telling children that you're having money problems and no plan or solution is something they can't understand. All they will do is stress about it.

When I was little, my mother always made a point of telling me how broke we were, and I (now) remember wearing shoes with holes in the bottoms, stealing pencils and paper from school, and refusing to buy school lunch because I didn't understand how much money we actually had. I thought if I got new shoes we would be homeless. If I bought school lunch we'd be evicted. I didn't understand because she didn't it explain it all that well...just that we were broke.

So if a person IS going to talk to their kids about finances, you have to ensure you're explaining things in a non-scary, results-oriented type of way.

Because it's too easy to scare the crap out of kids because they don't really understand money.*

(*to this day I order the cheapest appetizer off the menu, saying that's all I want. I still shop at Goodwill. I only buy groceries on sale. I'm saying, these things live deeply within you and it's not always a good thing.)
posted by kinetic at 10:20 AM on July 2, 2014 [3 favorites]

There is absolutely no reason to get your kids involved in your finances. They can't do anything about your financial troubles, and this can create a great deal of stress and a lifetime of "poverty mentality". The feeling of security they can have is much more valuable than any potential lesson they might learn from how late your electric bill payment is going to be this month or why you are taking a hardship withdrawal from your retirement account.

I grew up poor, but at the time I just thought my parents were frugal. I would have been stressed out of my mind if I believed my parents might not have the whole "providing for me" thing on lockdown.
posted by Willie0248 at 10:22 AM on July 2, 2014 [3 favorites]

Thanks for all the thoughtful comments. The example from my dad was just an eyeopener for me as I never thought about what level of knowledge would be appropriate for children. Despite my dad being a little crazy about money in general as the slight derail from the original question was for some, I still thought it was something I wanted to hear about from others at AMF.

My kids do not want for anything that is a necessity, but their friends are a bit more well off (appearing?) than we are. Same schools, same neighborhoods, even the same non-necessities (e.g., they each have an 3-year-old ipad), but the other kids lives are the flashy and frequent vacations and other trappings that we simply cannot pull off.

A side issue (and one that might really be another AMF topic) would be that we as parents are uber-savers in that we have taken every pre-tax opportunity (529, HSA, 401K contributions, etc..) to the max and have hoarded money into these vehicles, that we cannot obviously touch without penalty, to the detriment of our actual bank account. I don't know, maybe we are saving *too much* I realize other people have real financial problems, I get it.

I had just not ever thought of it from the kids' perspective.
posted by teg4rvn at 10:29 AM on July 2, 2014

Given what you just said, I'd opt for more transparency with your kids. If they have their basic needs met, plus some extras, and you can afford to max out tax advantaged savings, you guys are doing fine and explaining that you're prioritizing their college funds and your retirement over fancy vacations or events seems totally appropriate. I do agree about not sharing your stress, just the facts of the situation and why you're making the choices you're making.

As a single data point on the pro-sharing side - I grew up in what sounds like similar circumstances to your kids - pretty well off compared to most people in the US but much less rich than a lot of other kids at my school (I also lived in a much worse neighborhood, but I liked it there compared to where my friends lived so harbor no angst about that).

My dad handled the family finances and started explaining the most basic stuff (savings accounts, grocery shopping & coupons) when I was very young - maybe 6 or 7, then moved on to how much do our basic needs cost, how do mortgages work, etc when I was about 13 or 14 and, once I started working at 16, told me everything about our money (how much he made, savings and investments, the stock market, bonds, credit cards, real estate, our budget). He also made me start and contribute to an IRA as soon as I started working (and gave me a little match as an incentive to keep saving after I put in my first $2,000) and hassled me until I promised to max out my 401k at my first real job (which I did).

I totally credit my dad's openness and hectoring (plus some lucky life circumstances) for the fact that I have my financial act together. I wouldn't hesitate to explain how your family budget works to your kids (though you may want to hold off on telling them exactly how much you make until they're older unless you want all their friends to know too). Hearing from you about saving and planning for the future will be a really important message for them.
posted by snaw at 12:34 PM on July 2, 2014 [1 favorite]

If you're comfortable with it, teach them how to write checks and update a checkbook, and then have them make out the checks at bill paying time. That's a ground-level lesson in how money comes in and goes out.
posted by Flexagon at 12:41 PM on July 2, 2014 [1 favorite]

but the other kids lives are the flashy and frequent vacations and other trappings that we simply cannot pull off.
It's not that you can't, it is not you choose not to because you value things like financial security, money for your kid's education, and being self-supporting in retirement over flashy ephemeral things like vacations. To me this is a statement of your family values and you should be proud to share those values with your kids.

You don't have to go into the details of the budget to talk about things, even with younger kids. Yu can just talk about some specific examples where you could spend money on something but you would rather save your money. (eg. It might be nice to vacation in Africa/drive a BMW/get HBO but it's not really worth it - I would rather save the money and have it for more important things later)

Now, to balance your message of frugality, you should also talk about when you spend more because it is worth it to have the higher quality experience. A simple example: when grocery shopping, I taught my child to look at the unit pricing and buy the one that was cheapest. However, there were a few exceptions (Kraft Macaroni and Cheese is one) where it is totally worth it to spend more to get the better quality. We can't do this for everything then our groceries would cost too much money but we can choose do it on a few things when it seems worthwhile.

Finally, i just want to echo earlier comments that telling the kids to be grateful that the grandparents helped out is extremely appropriate. Another one of our family values is that people in families are happy for each other and help each other out. It's not that your child wouldn't have had the life cycle event (I'm sure you would have found a low budget way to do it) but grandparents decided that for them, this was one of those special events that was worth a spurge and so they gave you money to help it happen in a bigger way. You did fine.
posted by metahawk at 2:09 PM on July 2, 2014 [1 favorite]

Man, I would want to know. I grew up vaguely aware we were poor but never understood we were POOR. I couldn't analyse the situation in any meaningful way and I think that was a real mistake on my mother's part not to even attempt to explain it to me, other than to bark "we can't afford it!" at me when it came up, while my dad always explained it was because it was "your mother's fault." That said the two of them never even told me they were getting divorced, so there's that.

Understanding what financial troubles mean gives context to a kid. I was younger than yours are but I really wish I had a bit of help in understanding what it all meant. It would have made a huge difference growing up.
posted by scuza at 12:06 AM on July 3, 2014

I come from a different situation on the "kids knowing about money" debate. I grew up in a well-to-do family. I never knew how well-to-do until my senior year, when my dad had to fill out a FAFSA for my academic scholarship I earned to my first-choice college. The space about assets available had 6 spaces, and he filled in 9s for all of them.

I learned absolutely nothing about budgeting, financial management, any of it, growing up. I had a large allowance, and if I needed more beyond it, all I had to do was ask. I had chores, but they were in no way tied to my allowance. (I did have an economics class in high school, but it was taught by an idiot, and contained nothing about personal finance, it was all macroeconomic principles.)

So when I dropped out of college and moved across the country to marry a guy I met online, I had no idea how to manage what little money I had. It's only been in the last decade that I've started to feel like I had a handle on personal finance, and most of that has been through owning and operating a direct sales business, and the training I've had through the company with which I'm associated. And I still struggle sometimes (in my mid-30s) with wants vs needs, and sticking to a budget. (For example, I NEED to eat a gluten-free diet. I WANT gluten-free bread and gluten-free baked goodies like brownies and cakes from the gluten-free bakery up the road. But oh my goodness do I struggle with that bread!)

The kids showing gratitude to their grandparents is, in my mind, a completely separate issue. It's always appropriate to thank people who give us extra-special things.
posted by The Almighty Mommy Goddess at 6:48 PM on July 5, 2014

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