Money matters with the kids

How much do you share with your children about your current finances?

Sharing with your children about the current state of your finances could feel a little awkward and there’s of course the fear that you’d worry them. However, not letting your children

know about your finances especially if you’re having problems is kind of like closing your eyes and wishing that the problems will disappear.

Remember that there’s no hoping that your children will develop good financial practices because these skills need to be taught. It’s just the same as teaching them how to tie their shoelaces and eating their vegetables; important and healthy!

There’s also the question of how old the kids should be to understand what you’re telling them. So when should you tell them and in what way? Let’s find out.

Little children 

When your children are young, it’s best not to confuse them with too much at once. Teach them things such as how money from the ATM isn’t endless and comes from your salary from work. Teach them where the money comes from by giving them a job where they do simple chores around the house and earn an allowance. Make it a rule that they’ll need to save their allowance in order to buy the things they want.

It’s also important to take your kids to the grocery store and let them see how much things cost. Let them read the prices and compare the pricing of similar things, then ask them which one they should buy. Give them a budget and teach them how to stick to it and there’s no better place for practice at the grocery store!

Teenage years 

Your teen will be able to grasp more financial details such as interest, credit and salaries. This is the age where they may work part time so it’s a great time to give them sound advice on finance so they can manage their wages better and not spend it all in one place.

Speak to your teen on the important things that need to be paid first such as bills, taxes, groceries and insurance. Additionally, show them how much money actually goes into paying all of these.

This is also a great time to get them to save for college or university, depending on what they want to pursue in the future. Let them know that the more money they save, the less they will need to borrow and thus, less debt will be incurred.


Many adults may not want to admit to their children that they incurred debt from making mistakes but that can be turned into a teaching moment. Nobody is perfect and everyone makes mistakes. What matters is that you pick yourself up, understand what went wrong and make changes to rectify that mistake.

Before you do unload all this information on your kids, think about things such as whether your child is sensitive; will it exacerbate his or her anxiety or scared feelings if you tell them about your financial difficulties? Contrary to belief, not all children are worry-free and always happy.

Have a good think about when to properly tell your children about your debt and financial situation in order to minimise negative feelings.

The most important thing to keep in mind if you do tell your kids about your debt is to tell them that the debt isn’t their fault. Let them know that the debt was your mistake but you will take the problem head on and share your action plan with them too. Better yet, get your family involved in the solution by setting up a change jar for any loose coins lying around. Sure, you won’t be paying off your debts any time soon with spare change but it is a good way to show your children that you’re all in this together and every little bit helps. Additionally, make decisions as a family such as asking them on where to cut costs in order to help pay off the debt.

Speaking of debt, teaching your kids about credit cards is also extremely important. Show your kids how paying the minimum amount that you owe the bank can snowball into a huge amount of money, thus leading to debt!

Adult children 

At one point or another, you’ll have to let your adult children know about your finances to allay some of their worries about you. Being open about your financials could prepare them to help you out if it doesn’t look too good. Additionally, it could also better their understanding of how much or how little you’re able to help them, especially if you’re still their safety net.

In the event that one day you suddenly become incapacitated, you’ll need to inform them of your will, trusts or any medical instructions along with where all of these documents are kept.

Do discuss with your children especially if you’d like one of them to be the executor of your estate, along with the name of your attorney and also funeral plans.

If you don’t feel at all comfortable with revealing any and all information such as bank accounts, life insurance policies, real estate, investments and such to your children, this can all be passed to your attorney. In the event that you become incapacitated or pass away, your children will be able to get all this information from your attorney.

All in all, it is important to be open with your kids when it comes to your finances but do gauge their reactions and it’s best not to give too many details when they’re still young. This is a great way to teach your children how to manage their finances and also to learn from their mistakes.

It is a two way street because your children may also be able to help you with your financial troubles too. 

Reference: National Debt Relief (USA).