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The Surprising Consequences of Keeping Your Kids in the Dark about Your Finances

The surprising consequences of keeping your kids in the dark about your finances

I’m thrilled to have one-half of the Cash Cow Couple duo at The Heavy Purse today. Please welcome Vanessa as she shares how money secrets from her childhood affected her relationship with money as a young adult. If you would like to be featured at The Heavy Purse, please review my guest-posting policies. Take it away, Vanessa …

I don’t have any children of my own yet, but I do have a lot of opinions about how to raise them well, and they line up with the fantastic work of Shannon here at The Heavy Purse.

Even though I don’t have kids, I do have a miraculous ability to tap into my memory and remember through the eyes of a child. Parts of my childhood are still vivid memories, and today I would like to recount a story that may help you relate to your children about money.

“Mom, I’m hot. Can you turn the air vents towards me?”

It is so hot in the van, and the only air vents are all the way to the front. Mom and Dad always have them pointed in the wrong direction and the summer heat trapped inside the car is unbearable.

I can’t wait til we get to the restaurant.

“I’m hungry. Where are we going to eat?” my little brother complains. He is always hungry.

“Home. We’re going home to eat lunch today.”

My heart sinks, and all of a sudden, I’m not hungry anymore.

At first I think I am nauseous when I remember the cold leftover spaghetti waiting for me in the fridge. But then I realize it’s something more.

“Why are we going home to eat, Mama?” It’s Sunday. We always eat out on Sunday.

“Well, hun. We’re having to cut back for a little while. Things are tight, so we’re not going to go out to eat for now.”

That’s when I knew that the sickness I felt wasn’t a fear of leftover spaghetti. It was a fear that something deeper was wrong.

Even though I was only 9, anxiety about my familyís finances was a very real part of my life.

Don’t get me wrong. It’s not like my family lived on the edge of poverty or financial ruin. I grew up in middle class financial security. My family always had plenty of money.

So why was I, at 9 years old, worried about how much money we had and whether or not we’d be ok?

The answer is that the situation was handled in the wrong way.

If this situation had been handled better, my mom would have taken the opportunity to explain to me how money works. She would have showed me that my dad worked hard to bring in an income and that we had to choose how we would spend, save, invest, and give it.

She would have also told me specifically how much we needed to cut back in order to reach our financial goals and how long it would take us.

Then, she would have associated eating at home with positive things like family time, learning cooking skills, and how to eat healthier meals than the meals we would eat out.

However, the improperly handled situation produced the following 2 consequences. One was an immediate consequence, and the other, was a more unexpected and lingering problem.

1. It put me on edge about our finances.

Because I didn’t have full disclosure about why we had to cut back or for how long, I stressed about every penny we spent as a family for a long time.

Even though I was alerted to the fact that we needed to cut back, I was never told when we were in the clear. I just knew we were in trouble. This put a lot of unnecessary pressure on me as a young child. I stressed about matters I had very little control over and of which I was not fully informed.

I’m sure my mom did not realize how traumatic financial ambiguity can be for a child. My mom probably thought she was protecting me from the family financial burden. After all, I was only 9. The state of my parent’s finances was of no concern to me, right?

Wrong.

Unfortunately, a resource like the one here at the Heavy Purse was not available to my mom back in the 90’s. Otherwise she would have known that teaching your children about your family’s finances raises financially literate and responsible children.

2. It made me associate eating out with the idea that we were financially successful.

If we were eating regular meals out, then we were fine and I didn’t have to worry. But if we were cutting back for a while in the out-to-eat department, then, “Mayday mayday! We’ve got a problem.”

This was particularly bad because as I got older, I found comfort in going out to eat. Even if I was not doing well financially, I spent money eating out because it made me feel like all was well. I had an unhealthy emotional tie between eating out and financial affluence.

Not only was eating out regularly unhealthy for my 20 something body, it was also devastating to my meager college-aged, part-time-job budget. This emotional tie took years of frugality and disassociation to break.

Of the two consequences, this one was the most surprising, as well as the most important lesson for you to take away.

Please realize that your children are smart and intuitive. They know when there is financial strain in your family, so keeping them in the dark about the financial situation you are in not only cause anxiety in their precious little lives now, but could potentially contribute to the development of an unhealthy relationship with money in the future.

For this reason, I want to strongly encourage you to include your children in family financial decisions, problems, and resolutions. If you are having to cut back, tell your kids why and for how long. Give full disclosure to your children to eliminate anxiety and to promote a healthy and informed relationship with money. Take moments like these and use them as teaching moments to instruct your children about where money comes from and how to save, spend, invest, and give money wisely.

Editor’s Note: Thank you for sharing your story with us, Vanessa. This is a great reminder to parents that even though we think we are protecting our kids by not talking to them about money, their imaginations are running wild. I can recall a similar situation growing up and worrying in silence. Years later, even thinking about it now still makes me tense. Don’t force your kids to worry privately. Be open and help them work through any fears they have together.

Author bio: I’m Vanessa, one half of the Cash Cow Couple. My husband and I enjoy teaching others how to live an abundant life on a very modest salary. In our first year of marriage we only spent $10,000. This year we are attempting to resist lifestyle inflation and continue the challenge to live large on on less.

June 18, 2014  •  34 Comments  •  Guest Posts

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  1. Wednesday, June 18th, 2014
    Thanks to Vanessa for sharing this story. I agree that children's imaginations can run wild and they do need reassurance and careful explanations about sensitive subjects like money matters. What was probably an innocent comment by Vanessa's mom when she was trying to make sure their finances were running smoothly was interpreted as a major problem from the Vanessa's point of view. This just shows how easily a child can be affected by a single moment in time and can lead to repercussions in the future. Really great post.
    • Wednesday, June 18th, 2014
      Absolutely. I think it's important to remember how easily influenced children are. They're sponges, so make sure they're soaking up some good money lessons. :)
  2. Wednesday, June 18th, 2014
    That's an interesting way to look at it! I think it's important to explain the reality of money to your kids so they don't become consumed with problems that don't exist. I hope my kids "get it" one day but they are very young at the moment.
    • Wednesday, June 18th, 2014
      I'm sure when your kids get older they will definitely get it. With parents like you guys, they're bound for financial literacy at a young age.
  3. Wednesday, June 18th, 2014
    Thanks for sharing your story Vanessa. Unfortunately I think stories like yours are far too common as parents often think they're protecting their kids by not talking about finances with them - at any level. It sounds like it was a fairly simple comment, but when children have no paradigm to view it through the imagination can just go wild.
    • Wednesday, June 18th, 2014
      Absolutely! Kids are smart and intuitive. We've gotta keep them in the loop so that their imaginations don't run wild.
  4. Wednesday, June 18th, 2014
    Thank you so much for sharing your story! I, too, did not grow up in a household where money was handled or discussed properly. And here we both are - finance bloggers! I love it! Thanks again for your story. I hope it inspires families.
    • Wednesday, June 18th, 2014
      Ha! I suppose you're right. Funny how life turns out sometimes. I'm so glad we learned the importance of handling our finances properly.
  5. Wednesday, June 18th, 2014
    Thanks for sharing your story Vanessa! My parents really didn't talk about money around us and I never had any fears about it because of that, but I also didn't learn smart money habits, either. Now I have an 8 year old son, I am focused on educated him and making sure that he is financially literate and understands the choices we make in our home and why we make them.
    • Wednesday, June 18th, 2014
      It sounds like you're doing a great job of teaching your son about money and promoting a healthy relationship with finances with him. That's awesome.
  6. Wednesday, June 18th, 2014
    Great story and example Vanessa! I'm glad you shared this and I hope parents are listening and will start talking with their kids more about money and finances. Great post!
  7. Wednesday, June 18th, 2014
    Great post, Vanessa. I can relate to you with this. Finances were never explained to me and I heard "we can't afford it" WAY too many times. It wouldn't have been terrible to hear this if there was an explanation added, as you suggested in your post. There was none, though. I mean, my Dad is a chemist who had a phd and worked for a great company. I was "on edge" at times and it really could have been avoided. On the flip side it made me very interested in the question "what makes someone successful?" By successful I mean how did they get where they are? I look at a beautiful house and think "what did they do or what are they doing to be able to live there?" It definitely made me interested in entrepreneurship and is a big reason I got a finance major and went into business.
    • Wednesday, June 18th, 2014
      That's awesome that your curiosity about financial matters has transpired into a fulfilling career path for you.
  8. Wednesday, June 18th, 2014
    A great story that has a great lesson for all of us. Kids soak up the emotions that float around them. They may not know what is going on, but they sure do pick up on the feelings that surround whatever it is that is going on. Letting your kids in, with a positive spin, is never going to harm them, and it could do a world of good for them.
    • Wednesday, June 18th, 2014
      Agreed, Brad! Kids are way too smart for us not to fill them in on what's going on.
  9. Wednesday, June 18th, 2014
    Vanessa, fascinating! I needed to dissolve many money blocks due to having some zany, terrible beliefs about da dough, I picked up as a kid. Thanks!
    • Wednesday, June 18th, 2014
      I'm glad you're on the road to recovering from your "zany, terrible beliefs about da dough." haha!
  10. Wednesday, June 18th, 2014
    I went through the same thing as a child, around when I was 7. My dad lost his job, so it was pretty obvious as to why we were cutting back! I didn't have any numbers, though, and it just felt like we were constantly cutting back, even when he gained employment again. Unfortunately, the reality was that my parents were in debt, so I felt on edge the entire time I lived with them, until I had a job myself. I really do wish they had taken time to communicate with me about the situation.
    • Wednesday, June 18th, 2014
      That sounds stressful for you. :/ But, like Natalie said above, look at you now! A PF blogger. :)
  11. Wednesday, June 18th, 2014
    My parents highly influenced my views on money. While one parent would say we had no money, the other would hand us a $20 the very same day. This lead to great confusion about what it means to be able to afford something or not.
    • Wednesday, June 18th, 2014
      I bet that was really confusing. :/ But look at you now, taking control of your money and having a very clear cut view of what you want to do with it!
  12. Wednesday, June 18th, 2014
    Thanks for sharing your story with us, Vanessa. Your kids will be at a huge financial advantage with you and Jacob as an example.

    To the eating out point: you'd hate an ad that runs here in NYC for Seamless (a food delivery service). It says, "So you think you're a New Yorker? Then eat dinner like a New Yorker. Order on Seamless." It makes me blood boil each time I hear the ad.
    • Wednesday, June 18th, 2014
      Thank you about the whole kid thing. :) Someday we'll have little financial prodigy's running around. :)

      Wow, that's such a manipulative ad! Unfortunately, it probably works.
  13. Wednesday, June 18th, 2014
    Thank you for sharing your story.

    I also don't have kids yet, but when I do I'm going to do my best to keep them in the loop. My parents didn't hide things from me, they were just as clueless as I was when it comes to finances. I'm actually teaching them now.

    Even though they were clueless, they didn't make the same mistakes I made. But they also don't have enough savings or any money for retirement.
    • Wednesday, June 18th, 2014
      That is so awesome that you are able to now teach your parents about their finances. It's never too late for them to start saving!
  14. Wednesday, June 18th, 2014
    Thanks for sharing your story! I sometimes worry that we share too much financial information with our kids, but we are trying to avoid what you just described. We want our kids to understand that we live on a budget and sometimes you have to give something up to get something else.
    • Friday, June 20th, 2014
      I'm sure you guys are doing a great job! The fact that you consciously share information with them means you're on the right track.
  15. Thursday, June 19th, 2014
    Vanessa, I did the same thing regarding going out to eat because of my financial situation as a child. I viewed it as something only "rich" people did, and I didn't want to be poor. We used to spend SO much money going out to eat, but now that we've taught our kids about the joys of value-based spending and set some goals for things that are more important to us, they don't even miss eating out, and neither do I. :-) Great story, Vanessa!
    • Friday, June 20th, 2014
      That's awesome! Going out to eat is so expensive compared to what you can make the same meal for at home.
  16. Thursday, June 19th, 2014
    My parents were both wildly successful. They didn't talk much about money, I didn't really think anything of it. I didn't think we had or didn't have it, everything just was what it was. Getting into the real world and seeing how much things cost was a shock. It's funny how even a lack of money anxiety growing up can still affect you. If there's no discussion about money then you don't know what to think of it.
    • Friday, June 20th, 2014
      Wow, that's really interesting. I've never heard it from that perspective before. I bet that was a shock, especially considering where you've decided to reside!
  17. Friday, June 20th, 2014
    My parents and grandparents always said, "Just wait until you have to buy it..." Looking back, I think that was their way of saying we can't afford it. But we never had conversations dealing with money.
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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