Quite a few threads have me wondering how much people share with their children about their finances and how much we should be telling our children. If your kids do know your financial details, at what age did you bring them into the loop? Did your own parents share such information with you growing up?
Personally, our kids know we are comfortable and we were very clear about paying for their education and are clear about what expenses they need to cover and what we will cover. We talk about general savings/spending habits and the value of spending carefully and wisely. We have never discussed salaries nor our net worth, probably because we’ve always lived well below our means and didn’t want to give them the impression that we could afford more than what we might be willing to spend given income levels. Partially because husband and I are just more private about things like finances. Both my parents and in-laws have enough savings to be comfortably self-supporting in their retirements and have made arrangements for distribution of any remaining assets upon death and that’s really all we know.
So, how much have you told your own children and how much do you think they should know?
I know pretty much everything there is to know about my parents’ and they about mine. I don’t remember a time that I didn’t know about them.
Mr R’s family doesn’t talk about finances at all.
Our financial sharing (parent to kid) was partially out of necessity. Both of my parents faced the possibility of dying young and I’m the one who will have to deal with any finance issues when they’re gone.
They know about mine just because we’re a very open family (and they’re worried about my medical bills…)
My mom comes from a culture where everyone is open about money. Money isn’t so much a private affair as a community (or family) asset. So that got passed down to my family (and me).
We had told our kids that we will NOT need them to support us at all in our lives and MAY leave them a little when we die (or spend it all). As far as we know, we will not need to contribute toward our parents’ expenses, but my brother (who helps manage my mom’s investments) and my other brother who practices law with dad knows a lot more about their finances than I do.
We have just always generally assured our kids that we will NOT need them to contribute anything toward us and that we live well below our means. They know we own our house and the rentals properties we own. They also know we have no loans and don’t like debt. They know H receives a comfortable pension and that H and I will have medical insurance for the rest of our lives, partly subsidized by his past employer. They know we have worked with an estate attorney and have a CPA. They don’t have details.
Our kids know our approximate salaries, and they know the net worth of things like our real estate. We have also discussed our retirement accounts because some of those are inheritable accounts that will go to them…someday. We think.
Our kids also know how we pay our bills…and what we consider to be worthy of debt (mortgage on house).
As young adults, both have asked our advise about spending, retirement accounts, credit cards, etc.
My parents both had very simple finances…nothing fancy…so not much to know. They paid their bills every month…in full. Neither carried any debt (except house mortgage). They didn’t really use credit cards very much…mostly a cash economy. Neither parent was a big spender. Neither had any investments like stocks or anything like that.
My kids all have received electronic copies of my trust documents-they know which law firm has the original. They know where my banking and investment accounts are held, but not their value.
I have tried to teach the value of compounding. I suspect they are a bit better in the saving department than their father and I were at the same point in our early adult lives-but I am certain they will need it more than we did/I do.
I guess to me, it’s really a “need to know” basis. If my kids are making any decisions that are affected by our finances, I would feel I ought to share more. If H or I had some serious health issues that might cause us to die in the near future, we might share more as well. As it is, they don’t seem interested in more information and we are comfortable with the level of sharing thus far.
My parents seem to be operating on a similar basis and don’t want to share more than they are comfortable with, which makes sense to us, even tho they are in their 80s and 90s. It is their life and they remain mostly competent to handle it as they prefer.
This is a very good question and one I have conflicting feelings about. In my own case, my mother (widowed) let me know probably far too much about her finances when I was still in high school. In fact, she wanted me to take over managing the family finances as soon as possible, which I did after I graduated from college. This ended up being very convenient in her old age, as I could monitor investments and make sure she wouldn’t outlive her money. But it also put quite a bit of pressure on me to grow up quickly, and made me worry constantly about managing her financial situation. So I have possibly erred in the opposite direction with our own son (also an only child and just starting college). I would like, eventually, to share our financial circumstances with him in detail but don’t feel he is quite ready for that yet (and he seems to want to avoid the subject entirely). So for now he just knows that we are comfortably middle class, good about saving for college and retirement, and not wealthy enough for him to expect us to support him or ourselves in an expensive lifestyle.
I wish I could have told our kid the same but I could not.
I think one reason why we choose not to share much with our kid is that we do not want him to worry about us. To be sure, we likely do not need his support for a couple of decades. However, we are not sure about this if it turns out one of us lives too long.
At one time, I lost my job and did not tell him. He was on campus unless it was during the break, so it was not difficult to “hide” it. We did not want him to be concerned about us. When he eventually found out, he did not tell us that he actually knew about it either. (He did tell us much later that he had known about it.) Strange dynamics in our family. It might be even more weird that I ended up using some money from my unemployment check to “support” my very old parents who were much more well-off than us at that time (and they were happy about this I guess.) We did not want them to know my situation either, to avoid the potential lecturing about how we had spent much $$ on our our kid’s education.
I know my mom has pretty much NO money, and lives on social security and that’s it. She lives with sisters, and they do OK as a group. I will wind up supporting her eventually. Our kids know we live in a nice enough house, in a nice enough neighborhood, but that we are government employees, so will never make a ton of money. They know we can afford to pay for their college, and a Reasonably OK time while they are there, but that we expect them on the road to self-sufficiency once they are done. They know NO specifics about our finances.
My kids are in college and we’re in our prime earning years. I see no benefit to them knowing particulars. They know very well our philosophy of saving and living below our means and we started their roth iras at a young age. It’s obvious we aren’t struggling.
I knew after dad died about what my mom’s financial situation was as I helped find a place for her to live. I did the application so I accumulated all the financials. This wasn’t until she was a bit older.
If there was a trust in place or we were going to need help there would be a need to be open about it. However at this point besides having a will and the financial documents easily found I don’t see the up side.
I agree completely with eyemamom. My kids have no idea how much, only that we’ve worked hard for it and lived below our means. We will likely plan to pay for our grandchildren’s education, but they don’t need to know that right now.
Otoh, I know far more about my mother’s finances than I ever wanted to, as I’ve had to take over after poor money mgt on her part. We kick ourselves we didn’t ask earlier on. My family didn’t talk about money; we just spent.
My kids don’t even know about their own finances, so knowing mine wouldn’t help them. I WISH they’d take more interest in their own situations and college finances, but have to admit that it is pretty complicated when you have to consider scholarships, grants, parent’s AOTC claim, unearned income on scholarships, increases in tuition. My early years of doing taxes were ‘earn X, pay Y’ with few credits or deductions, self employment schedules or investments.
my kids know a little (the 2 college-aged kids) but they dont seem to understand what it all means, nor how it fits in with real life. there’s so many things they dont understand - like property taxes and health/home/life insurance costs and etc. So while they might know what we make, they dont get how fast it goes with retirement savings & maintaining a household for 6.
I know quite a bit about my in-laws’ financial situation, but, unfortunately, learned it too late to even try to avert the bad investment decisions FIL made.
Our high school aged kids have a pretty good idea of where we stand but not the specifics. We live slightly below our means and have good savings, but have also benefitted by a good salary, job security (so far), and some inheritance. Last weekend we sat down with our daughter (HS junior) and laid out the college financial situation to her - we are 99% sure we won’t qualify for financial aid and, with 3 kids, not in a position to pay for private tuition without some merit aid. We have saved significantly though through 529’s and are in a great position to cover in-state tuition/room/board, etc. and some extras (and she has already qualified through ACT scores for significant, if not full, in state tuition scholarships). We showed her our 529 statements, explained how the exposure to stock risk has been decreased as she entered high school, etc. etc. Her reaction and comments showed me that she really didn’t know how much we had done behind the scenes for 17 years and she really expressed her appreciation. Then we showed her what our thoughts were on moving forward with finding colleges that would be both a good fit for her and that were also affordable. We have looked at some great schools, and she has high grades and a good ACT, but we explained that we are going to have to look for that ‘sweet spot’ match between her stats and a chance at some merit aid - how we had to close that gap in the difference between the in-state school tuition and what she can get a private school tuition down to with merit aid. I think it is soooo important to do this now rather than before we go visit any more schools or start sending out applications next fall. I didn’t really understand all of the merit aid reality (or lack thereof) until the past month or so after doing so much reading here on CC and spending a lot of time researching. I hope my understanding is correct - but I feel like it is so important for her to understand why we think a school will be a good fit or not financially as well as all the other stuff. It was such a good conversation and didn’t involve any tears or misunderstanding, crushed dreams, etc. I think everyone should do it NOW and not later!
We recently made a binder with all of our financial information - every account, all retirement accounts, insurance accounts, bank accounts etc. Each has account numbers, phone numbers, how to access all the information. We showed the binder to our two kids (18 and 21). The 21 year old looked at the actual numbers. The 18 year old was not very interested. We then put the binder in our safe and showed them how to open the safe. They do not know what our salaries are but now know where all our money is in case something happens to us. We will keep the binder updated.
We don’t know anything about H’s parents’ finances, but we know everything about my Mom’s because I am her caregiver and deal with all her needs.
As for our kids, we are very much like @ahsmuoh. Our kids are the same ages (18 and 21) and we recently showed them how to access the information if anything were to happen to us. We also explained to them how the trust worked and what they would need to do (and who to ask for help).
I don’t think they know exactly what we make or how much we have, but I think we’ve mentioned these things in general terms in the past (so it depends on how much they were listening and remembering). Mostly those things came up during conversations about college expenses. But what we do make sure to repeat is our philosophy of saving and how to manage money. So far, they appear to be listening because they are both frugal.