The economic downturn beginning in 2007 caused financial hardship for many families who had to cope with job loss, foreclosures, and bankruptcies.

While not every family may have had such a difficult time financially, there are still other strains on family finances such as rising gas and grocery prices.

As a parent, should you talk about money with your spouse in front of the children?

Of course, this is a deeply personal issue, and many will have differing views. However, there is a valid reason to talk about money issues in front of your kids.

Benefit of Talking about Finances in Front of Your Kids



If your money is tight and your kids are aware of this fact, your kids will understand why they can’t have something they want.

This is especially important if you have previously been quite free with your money and have given your children most of what they want. If you suddenly stop buying them things, they will wonder why. However, if they have overheard your conversations about finances, they will have a better idea why their request for something is being declined or why you may have to choose a cheaper option.

My husband and I have quite a bit of debt to pay off, so all of our extra money is being funneled to debt repayment.

My son has some idea about this because of conversations he has heard between me and my husband. When I took him tennis shoe shopping a few months ago, he liked a pair that cost $50, but settled on a pair that cost $25 because he rationalized that the $25 pair were just as good as the $50 pair.

He had this thought process out loud with little input from me.

I was very proud of him. It was fun to see him evaluate that even though the $50 pair had a character he liked on the shoe and the $25 pair didn’t, the $25 pair fit better into our family finances. Ultimately I think hearing our conversations and watching us be conservative with money will help him manage his own finances better as he grows older.

Potential Drawbacks to Discussing Finances in Front of Your Kids

Some may argue that you should not talk about finances with your kids because they are the kids and you are the adults; you are the one who should carry any burden as far as the finances are concerned.

These parents believe that childhood is not the time to be privy to adult financial discussions.

While I understand the concerns, there is a risk that not sharing any financial struggles and successes with your children will give them the idea that there will always be money available. Instead, it may be better to let them hear you discuss finances and watch you manage money so they can learn how to do so themselves. This can start as early as five or six years old as they learn to manage their allowance.

Some Rules to Follow When Discussing Finances

If you are going to talk to your children about money or have a discussion with your spouse when the children are around, there are a few strategies you will want to take to make this conversation as productive as possible:

– Avoid scaring your children. To say something like, “We may lose the home if we can’t make our mortgage payment this month” is something no child should hear, even if it is true. While it is okay to share that money is tight, it is not good to share something they have no control of that may scare them.

– Don’t tell your exact income. Children, especially young tweens, have difficulty understanding how much it costs to run a household. While they may know about your financial situation in general, it is probably best not to give exact expenses and income information until they are in their late teens and getting ready to go out on their own and manage their own money.

– Let them watch you be conservative with money. Cutting back on expenses is easiest for children if you already follow a fairly frugal lifestyle. Love them or hate them, the Duggars are raising 19 kids without any public assistance. They repeatedly say that their mantra is “Buy used and save the difference.” Their kids don’t expect brand new items because the family has made it very clear that one of the ways they keep the family finances in the black is by buying used. They follow this mantra for clothing, cars, and trailers.

Finally

The decision whether to discuss family finances in front of your children is a personal one and you have to do what is best with your family. We have decided to occasionally discuss our finances in general terms with our children present, and thus far, we are happy with that decision and what it is teaching our oldest child.

Do you discuss your finances in front of your children? Why or why not?