Debt, infographic

The Money Secrets Parents Keep from Their Kids

The Money Secrets Parents Keep

I found this infographic about the money secrets parents keep from their kids. You’ll see that 77% of parents don’t tell their kids the truth about money matters. Ouch. Money has long been taboo in our homes, which is bad enough, but please don’t magnify the problem by outright lying.

As I shared earlier this year, money transparency and honesty are key ingredients to maintaining a happy and financially strong marriage. The same holds true when it comes to your children. Now I know parents don’t want their kids to become scared or stressed over finances, which is why some refrain from having these important conversations. It is a delicate balance. But lying or pretending to live a lifestyle you can’t afford is not the answer either. Money secrets do more harm, than good.

Money Lies Parents Tell Kids #infographic

Kids Want and Deserve the Truth

One thing I hear constantly is how many adults wish their parents had talked to them about money when they were children. We like to hide our money mistakes, sometimes even from ourselves, but even more so from our kids. However, they want and need us to talk to them about money, including our mistakes. This is how they learn and our best chance in helping them avoid repeating our mistakes. You may think you’re protecting your kids by hiding money problems, but you’re not. If you truly want to help your kids succeed, then help them learn how to use their money wisely.

This doesn’t mean you need to sit down with your kids and list out every money sin you ever committed. What it does mean is that you look for those moments where it makes sense to bring up a money mistake through an every day activity. For example, when you go shopping with your kids, you might casually point out something you genuinely like and then tell them there was a time you would have automatically bought it. But now you slow down and determine if it fits within your other priorities and budget. With older kids, you can label it a mistake and explain the outcome of living beyond your means.

The trick is to keep your honesty age-appropriate and some financial information is private. You decide what makes sense to tell you kids and what they can handle, but don’t keep them completely in the dark, especially if there are financial difficulties. They can sense the tension and fear within the home. Being brought into the fold, gently and in an age-appropriate manner, can actually reduce their worry. Keep the conversation simple with the focus on the solution you’re implementing. Now they understand what is happening and how they can help.

Believe me, I understand that you don’t want to scare your kids or disappoint them when your financial situation forces you to say “no” more than “yes”. As a Mom myself, the thought of not being able to provide for my girls terrifies me, but I also don’t pretend that lying to them is a better option. For those of you facing this situation, I’ve put together a series on how to talk to kids about debt to help you have these conversations with confidence. Now everyone is working together towards the family’s financial freedom. This is a much better place to live.

Shannon

The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.

June 9, 2014  •  52 Comments  •  Debt, infographic

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Comments

  1. Monday, June 9th, 2014
    Yikes! These numbers are disappointing! I can say that growing up, we did not talk about money, but knowing what I know now, I absolutely want to have transparency and money discussions with my family. Hopefully financial awareness makes this more common in the future.
    • Shannon Ryan
      Monday, June 9th, 2014
      I was surprised by how high the numbers were too. I knew many parents didn't talk to their kids about money but it makes me sad to so many not only don't talk to their kids about money but also lie to them about it. We are very transparent (where appropriate) with the girls and have money conversations with them and it truly does make a difference.
  2. Monday, June 9th, 2014
    I think my parent's definitely told me they couldn't afford things they can. I also was not given a lot of background or information on my family's finances. I think this really impacted me and made me want to learn more about finance, business, careers, etc. because they made me want to know WHY we couldn't afford certain things and what made it so others could.
    • Shannon Ryan
      Monday, June 9th, 2014
      I know a lot of parents do that out of innocence, considering it to be a little white lie. While we definitely need to be comfortable telling our children "no" and not buy everything they want, we also need to tell them "why". It is definitely confusing for kids when they get told "no" but then they see their Mom and Dad buy things for themselves. Now when you have kids in the future, you'll be able to explain the reason "why" so it doesn't arbitrary or Mom and Dad are just being unfair, which is what many kids incorrectly believe.
  3. Monday, June 9th, 2014
    Even though it sucks as a parent to have to say, "We cannot afford that right now," it's important for them to hear it and understand that you cannot buy everything you want all the time - they need to learn to have to pick and choose what is more important to them!
    • Shannon Ryan
      Monday, June 9th, 2014
      It is hard to tell our kids "no" and there is a lot of pressure on us to say "yes". Not just from our kids, but also from other parents. There seems to be a pervading belief that you have failed as a parent if you can't afford whatever your child wants. This is a false belief but I see lots of parents succumb to it. It is important for kids to understand that they need to pick and choose what means the most to them and save for it. So many kids never learn this and leave home and continue to tell themselves "yes" when they shouldn't.
  4. Monday, June 9th, 2014
    This is interesting. I have a post coming up soon on how/when to tell kids the true nature of your financial situation. Because, while I don't condone lying, kids don't need to know everything about their parent's financial life. I don't see the point in sharing the nitty-gritty details (like total net worth) until the kids are of age to handle it emotionally. Transparency is important but it has to be age-appropriate.
    • Shannon Ryan
      Monday, June 9th, 2014
      I agree that children don't need to know every detail about your financial life and the information you share should be age-appropriate. There is a difference, in my mind, of choosing to withhold things, like your net worth, than outright lying to your children, which I know is something you don't do. I tell parents that if your kids ask something that you are not comfortable sharing, like net worth, then explain to them in general terms what you are comfortable sharing and table the subject until a later date. If they seemed stressed about the topic for some reason, find out why so you can reassure them.
  5. Monday, June 9th, 2014
    I think it's important to be open and honest with kids while also sheltering them from too many adult problems. I know people who tell their kids *too much* about their situation and it causes them to worry about problems beyond their control.
    • Shannon Ryan
      Monday, June 9th, 2014
      I agree, Holly. You have to balance what you tell them and make sure it's age-appropriate. It seems like people go to extremes - over-sheltering or sharing too much.
  6. Monday, June 9th, 2014
    Wow, that's just crazy! I completely understand not wanting to scare kids, but lying or hiding things is generally not the solution. :) As a parent I think it's so important, as appropriate, to share with your kids mistakes you've made and those include those financial in nature. Otherwise, how are they going to learn how to deal with them when they run into it themselves?
    • Shannon Ryan
      Monday, June 9th, 2014
      I agree, John. I don't want to scare my girls either, but I know lying is not the right answer either. I find that you can talk about money mistakes or concerns with your kids through everyday activities without scaring them. And yes, if we don't talk to our kids about money mistakes, then we miss our chance to prevent them from repeating them or at least knowing how to handle the mistake if they do repeat it.
  7. Monday, June 9th, 2014
    My family did not talking about their money troubles until it was unfortunately too late. Looking back, I wish they would have been more honest. I think we all could have been a support system for one another.
    • Shannon Ryan
      Monday, June 9th, 2014
      That's the beautiful part sharing your financial situation with your kids, even when it's not ideal. Now kids know and understand how they can help. Everyone is working from the same page and towards a common goal.
  8. Monday, June 9th, 2014
    It's strange because although I didn't know much about money - my parents never shared anything - I knew we were okay because we went on nice holidays and gave presents to each other on birthdays. However, more recently my mum has shared a couple of things that made me aware that money was tight at times, no matter how it might have seemed to me at the time. I sure hope that when we have children, we'll have the courage to be honest with our children in the tough times as well as the good.
    • Shannon Ryan
      Monday, June 9th, 2014
      This happens quite a bit. Parents don't want their kids to worry (and sometimes they are not ready to admit it themselves) so they keep up appearances, even when they shouldn't. It does take courage to talk to kids when there is financial struggles and changes need to be made. Their fear prevents a lot of parents from talking to their kids but actually talking to them in age-appropriate manner actually eliminates some of that pressure.
  9. Monday, June 9th, 2014
    My parents never told me a lot about their finances growing up. However, we lived comfortably and frugally. In hindsight, I think my parents did a great job managing their finances but they just felt that it was not my younger sister's or mine business. Sometimes I wish they would have told us more but I think I've got the hang of managing the finances now.
    • Shannon Ryan
      Monday, June 9th, 2014
      It sounds like even though you're parents weren't actively talking to you about money, they did a great job leading by example, Liz. That carries a lot weight too.
  10. Monday, June 9th, 2014
    Where did you find this info graphic? Do you know where the stats came from? Just curious :)
    • Shannon Ryan
      Monday, June 9th, 2014
      THe infographic came from T. Rowe and the market research from market tools. You can click on the info graphic and it will take you to the site.
  11. Monday, June 9th, 2014
    My parents never told me anything about money, until it ran out. The run up to that was my father being drunk for about a year straight. That was stressful, and if you think, as a kid, that I had no idea what was going on, you are just wrong. It was hard to miss all that Vodka breath. So I'm all for telling the kids age appropriate stuff. It is better than being drunk and letting them figure it out.
    • Shannon Ryan
      Monday, June 9th, 2014
      Oh, Brad. I am so sorry. That could not have been easy for you. I agree wholeheartedly that kids can tell something is going on, even if you think you are hiding it so well. They know. And this is not how you want them to find out.
  12. Monday, June 9th, 2014
    wow that's a big percentage. My parents never lied to me about money, wait... how would I know?

    I'm going to try to teach my kids - when I have them - about savings and I'm going to have an open financial relationship with them. I'm obviously going to keep it appropriate for their age, but they will be better informed than I ever was.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      It is a big percentage, unfortunately. Love that you plan to talk to your future kids about money and help them build a good relationship with money. Better informed kids are exactly what we want! :)
  13. Monday, June 9th, 2014
    I definitely intend to be as open as possible with my own daughter. When I was growing up my mum and dad didn't talk about money all that much. We didn't really have a lot of money and I was often told, "We just can't afford that," but there was never really a reason why.

    I guess I thought that was normal so when I was able to get credit, I relished in the freedom to buy what I wanted (even though the money wasn't mine). I feel strongly about making sure my daughter fully understands about money and what happens when you spend what you can't afford.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      This is one of the biggest reasons why I am not a fan of "we can't afford it" because it leaves out the most important part - the why. It doesn't mean kids will be happy when they hear "no" but at least they understand "why". So many kids leave home, get their first credit card and always tell themselves "yes". You're already doing a great job introducing your daughter to money and will continue to do so. It will make a huge difference in her life!
  14. Monday, June 9th, 2014
    As you say, if you do it in an age appropriate and positive manner, being honest is the best thing. Don't hide things to protect them, but don't make them overly anxious either. That would not be fair to kids who can tend to over exaggerate things and extrapolate it to the worst scenario (grandiose thinking).
    • Shannon Ryan
      Tuesday, June 10th, 2014
      It's definitely a delicate balance but as a whole, honesty is the best way to go. By keeping it positive and age-appropriate, you can help mitigate some of their fear. Because I find when kids who know something is wrong but don't know exactly what's wrong, will create all kinds of crazy scenarios too. :) This is why talking to them honestly is the best. Now you've opened the doors of communication and can check-in regularly to make sure they are not anxious or stressed.
  15. Monday, June 9th, 2014
    Good point Shannon. Kids can sense so much of what their parents are going through. I agree it's best not to lay everything out there though as it may stress them more, but letting them in a little is beneficial.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      We think we are being so clever by hiding what's going on from our kids, but I find they almost always know something is stressing us out. They can sense the fear and tension within the home. You definitely don't want to stress them further but letting them know what's going and most importantly how you're taking care of it, can help reduce their fear.
  16. Monday, June 9th, 2014
    I think it is crazy that we as parents can demand honesty from our children (i.e. who made the mess, did you brush your teeth) and yet we don't lead by example and open up and get honest with our children. We don't necessary have to scare them with all of the details of our money situation if it is bad, but they should understand what is happening in their home. I think it is worse for them to have a "surprise" financial mess sprung on them then to keep them posted and include them in part of the solution.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      Exactly, Shannon! And they notice that discrepancy too. Over time, the things we say start to lose their impact and why we need to be so conscious of our words and actions, money-related or not. I agree that it's far worse to have a "surprise" sprung on them emotionally. It's better to gently bring them into the fold and let them be a part of the discussions as appropriate.
  17. Monday, June 9th, 2014
    We didn't talk about money in our household growing up. The only time I remember that we were really under financial strain, was during the recession back in the early 90's. That was a tough time.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      Many parents don't talk about money with their kids unfortunately. I do remember the recession in the early 90's and it was definitely a tough time for many people. We sometimes forget how frequently we go through and come out from under a recession.
  18. Monday, June 9th, 2014
    I agree with some of the other commenters of this post, the numbers are higher than I would have imagined. Finances weren't outright discussed in our family but we [the children] kind of just knew where our household fell on the social/financial ladder. We were encouraged to make our own money by doing higher level chores. My first real job was at age 16 and before that I had a pretty good understanding of the value of a dollar.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      It is a bit eye-opening when you see those numbers. I'm glad your parents had you earn money through additional chores as it's important for kids to learn that money is earned, not given.
  19. Monday, June 9th, 2014
    Talking to kids about money is so important. My parents never really did that with me and I think things would have been much better for me if they did. If I ever have kids, I would think I would try my best to get them to understand money asap so they can hopefully avoid the mistakes that I did.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      It is so important for parents to talk to kids about money and sadly, so few parents realize they need to do so. Money has been a taboo topic in homes for so many years, and it's time for us to break the cycle. I'm glad that when you have kids, you plan to help your kids learn how to handle their money wisely.
  20. Monday, June 9th, 2014
    It's got to be hard to find the balance because you don't want to worry your kids or have them tell their friends "my parents can't afford stuff" but you want them to know the value of money too!
    • Shannon Ryan
      Tuesday, June 10th, 2014
      It is definitely a delicate balance, Cat. You certainly want to take into consideration your child's sensitivity and age when you have these talks, but ultimately you also want them to be money savvy too. Seeing parents overcome financial struggles is very powerful too.
  21. Monday, June 9th, 2014
    I am trying really hard to never say can't around my daughter. Telling kids you can't afford it is an easy way out of buying something you don't want to buy, but it's not a good lesson.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      Good for you, Kim! It is an easy way out of buying something your child doesn't need, but it doesn't teach them anything beside a desire to hear "yes". And those kids who always hear "no" without the why, tend to grow up to be adults who tell themselves "yes" all the time with their credit cards.
  22. Tuesday, June 10th, 2014
    Wow. Sad numbers here, although I'm not surprised. You know that we can say first hand how incredibly beneficial it was for us, on so many levels, to come clean with our kids about our finances. Your advice here is spot-on, Shannon.
    • Shannon Ryan
      Tuesday, June 10th, 2014
      Yes, you absolutely know firsthand how beneficial and powerful it was to talk to your kids about your debt. I know they are your biggest supporters and the lessons they are learning from the changes you and Rick made is priceless too.
  23. Tuesday, June 10th, 2014
    I think explaining why a purchase isn't being made truthfully is SO much more valuable than telling a child, "we can't afford it"
    • Shannon Ryan
      Tuesday, June 10th, 2014
      I agree 100%, Stefanie. "We can't afford it" is the easy answer but not one that teaches kids anything.
  24. Jennifer
    Saturday, June 14th, 2014
    So instead of telling kids you don't have the money when you do, could you just explain it's not in the budget? That way you can teach them that while you have money for things, you also have a plan for that money and goals you are pursuing...like a down payment, buying a new-to-the-family cat, a vacation, etc.
    • Jennifer
      Saturday, June 14th, 2014
      Car, not a new cat!
    • Shannon Ryan
      Sunday, June 15th, 2014
      That's right, Jennifer. In that situation, I always reminded the girls of our big family goal. We talk about it often and they know it's our top priority as a family, so they understand that our money has purpose. This way it doesn't seem arbitrary and the girls get excited about our family goal, which helps eliminate any feelings of deprivation. Even if your reason isn't something that will excite them, like a vacation, they still understand that money has a purpose/goal and you are choosing to honor that goal, which is important for kids to see and understand.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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