Are you a good money-role-model for your kids?
I recently came across an article that argued – quite convincingly – that parents are poor financial role models for their kids. Here is a quote from the article:
“Most parents (77%) say they are not always honest with their kids about money; 15% lie weekly. Half are willing to discuss saving and spending issues but almost no one talks about tougher concepts like inflation (19%), investing (16%), diversification (11%), and asset allocation (8%). A third avoid talking about the family’s finances altogether.“
Let’s break that down, piece by piece.
Most parents (77%) say they are not always honest with their kids about money. As a parent, I will say that it’s incredibly difficult to always be 100% honest with your kids about money – but that depends on what you mean by honesty. Some parents might view full honesty as requiring them to tell their children about every financial issue that might affect them – otherwise,
aren’t you being dishonest by exclusion? I think that it’s very valuable for parents to be fully honest with their kids when
financial questions come up, butthey don’t need to be privy to every financial discussion, particularly when they are young.
15% lie weekly. This part is a bit awkward, though. If your financial situation is in such disrepair that you feel the need to lie to your kids about money weekly, then something is awry.
Half are willing to discuss saving and spending issues. Only half? Also, discussing these kinds of things in the abstract isn’t a good way to reach teenagers or younger children. You have to make it tangible and connected to something in their life that they care about.
A third avoid talking about the family’s finances altogether. A third? That’s a third of children who will have no idea what to do about family finances when they reach adulthood.
I draw two conclusions from all of this.
First, there are many families in financial distress. If you’re lying to your children on any regular basis about your financial state, then there is some aspect of your financial life that you do not feel comfortable with, which is usually a sign that there’s something out of whack.
Second, many parents simply can’t find a way to communicate money issues with their children, whether it’s because of an uncomfortable topic or because of their own lack of financial knowledge.
Neither one is an adequate reason to skip out on discussing a money topic with your family. If you skip talking to your kids about a life issue because it’s uncomfortable or because you don’t know enough, you have to get yourself up to speed and do speed and make a change.