In a world where so little is off-limits, money is the last conversational taboo. Maybe because it’s disheartening to discuss: Boston has the highest rate of income inequality in the country, according to census analysis by the Brookings Institution. Day care costs upward of $16,000 annually, topping most US states. Housing? Let’s not go there.
Nonetheless, parents should talk to children about finances so they don’t grow up to associate money with fear, says Peace of Money’s Charlo Maurer, a fee-only financial planner who often sees clients grappling with home-buying or child-care costs.
“Talk to your kids early on. If the only time money gets talked about is because of a crisis, they’ll grow up to be adults who associate money with a crisis instead of regular, consistent conversations,” Maurer says.
“It’s analogous to talking about sex. It’s not one talk. It’s an ongoing conversation that starts early and should be tailored as your child ages,” says Abigail Judge, a lecturer in psychology at Harvard Medical School.
Here, experts advise on sticky situations faced by parents of elementary schoolers and up, and how to navigate them.
The problem: Your kids want to know how much money you make.
The solution: Giving them a figure is less instructive than visually representing your budget to your children, says Peace of Money’s Vera Kelsey-Watts. Take out one whole paycheck in cash, tell your kids how much is there, lay it on the table, and divvy it up by mortgage, investments, utilities, and so forth. In a world where most banking is done online, it’s important (and reassuring) for kids to actually see and remember that money is real and designated for various purposes.
The problem: You’re divorcing, and one parent is downgrading to a small condo. Your kids want to know why.
The solution: Create a teaching moment to share your personal history with your kids, says Kelsey-Watts. Explain your choices: Maybe you have less money for a big house because you work part-time, and being home for your kids is important to you. Maybe you love your profession so much that a paycheck is secondary. The bottom line, says Kelsey-Watts, is to “reassure kids that they’ll have a safe home.”
It also helps to include them in manageable budgeting choices, like picking out groceries or choosing a special meal out once a week.
“Kids can absorb stress. If they can be participatory and feel agency, it helps,” she says.
The problem: You live in a modest home in a wealthy town, and your daughter never invites friends over.
The solution: Understand that she might feel ashamed or jealous. Acknowledge it without trying to squelch it.
“Conversations about money are emotionally driven, and one of the biggest emotions is shame,” says Suzanne Baumann, an adolescent psychologist and director of counseling and wellness at Boston’s Winsor School. Give your child space to share. “Say, ‘Hey, I notice that you have wonderful friends, but you’re always going to their house. Would you like to have someone over?’ Probe gently—they probably don’t want to make you feel badly,” she says.
Then, don’t push it. Jealousy is a normal emotion. “Even just acknowledging that the feelings are there is so freeing,” Baumann says.
Meanwhile, don’t subconsciously make her affluent friends’ lives sound glamorous. It will only further alienate her, and it reveals your own resentment. Instead, accentuate the great things in her life, like friends, work, or hobbies, and remind your daughter that her friends are always welcome.
The problem: You have a lot of money, and you don’t want your kids to grow up spoiled.
The solution: Don’t pretend to be middle-class when you’re not. It’s disingenuous for kids — and adults.
“Nobody without your money wants to hear a lie about yours. People appreciate honesty,” Baumann says. Instead, acknowledge your means while emphasizing philanthropy and service to your children.
“In Boston, kids are pretty modest. Sometimes kids are afraid of how much money they have and don’t want to be considered superficial,” Baumann says.
Help them channel their good fortune in positive ways by emphasizing their favorite causes. If a child loves animals, for instance, explain that they’re in a position to help the cause and connect them to volunteer opportunities. Don’t apologize for your bank account but don’t boast about it, either. Instead, help your children think about how to help someone else.
The problem: Your kid has a case of the gimmes: a new iPad, designer clothes, you name it.
The solution: Get cozy with discomfort. “Discomfort is hard for parents who are nurturers. They don’t tolerate discomfort in their kids,” says Lexington child psychologist Dr. Anthony Rao. But it’s worth it.
“When you reward quickly and don’t let a delay occur, you’re conditioning your child’s brain to want a bigger reward later on,” he warns.
First, suppress the need to please your child. Then, speak in the third person when denying the goodie. Speaking in the third person depersonalizes the issue.
“Calmly explain, ‘In our family, this is how we earn rewards,’ ” Rao says.
Then, fold in an incentive. Rao recommends visuals: Mark off homework completed or chores done, or whatever your behavioral goal is, and reward it when it’s appropriate.
“Kids have more respect for the item when they have skin in the game,” Rao says.
The problem: Your child could use exposure to the world outside of his or her little bubble.
The solution: Volunteer! Try to connect your kids with a cause they can relate to, says Boston Cares executive director Patrice Keegan. For instance, a child might think of homelessness as an issue that only affects adults. Help them put together a bag of clothes or toys for a child his or her age.
“Kids will become engaged thinking about what they might like. Make it real for the child, so it’s a springboard for a teachable moment,” Keegan says.
The problem: Your son’s teammates are going to elite private colleges. Yours is going to a state school because it’s affordable, and you’re dreading running into those parents around town.
The solution: Construct an empowering narrative, says Harvard’s Abigail Judge. This is a chance to model balance and validation for your child.
“Say, ‘We did a lot of research, and I’m so proud of my son for making this choice,’” says Judge. Avoid stumbling into a shame spiral wherein you lament your financial situation or stammer that the Ivy League was out of reach.
“Express pride. This is protective of your child and nurturing of you as a parent, because you’re owning the message,” Judge says.
The problem: You want to help your kids save money, but you don’t know where to start.
The solution: Beginning when they’re in elementary school, let them have their own account to use for vacation souvenirs and special occasions.
“If they’re putting money into a jar or piggy bank at home, they’re ready for a savings account,” says Bryan Christensen, a vice president at Middlesex Savings Bank.
Start with a passbook savings account when they’re 8 or 9, then progress to a statement savings account with an ATM card (which you can only use at a machine, not at the mall) when they’re preteens. Responsible teenagers can have a checking account with a debit card.
And, through the years, be transparent about money.
“The worst thing you can do is to say, ‘Oh, you can worry about money as a grown-up,’ like it’s some awful thing and you’re protecting them from money now,” Christensen says. “Money is there to help us do things that we want to do. Think about it and use it wisely.”
Kara Baskin can be reached at firstname.lastname@example.org