In some households, talking about money is almost taboo, and it is never mentioned.  In others, parents are open with their children about their financial situation, and the struggles and successes they went through to achieve their current financial status.

The way we were raised, and what we learned about personal finances from our parents, will clearly affect how we talk to our own children about money.  Unfortunately, our school systems somewhat lack education specific to managing personal finances. This leaves a lot of the responsibility on parents to help children understand how to manage money.

It is probably not necessary to share every detail about your financial situation with your children. As uncomfortable as it might be, I do think it’s worth explaining your financial struggles and successes at a high level.


Sharing your Struggles

Most of us make many sacrifices in order to provide our children with their current lifestyle. Many young families just starting out are balancing paying off college debt, saving for a home, the expenses having a child, childcare, and the list can go on. By the time our children can understand money, hopefully we have found some balance, and as our income increases, we’ll have the ability to more comfortably support our current expenses while saving.

So why share the struggles? If our children don’t understand the sacrifices we made to provide them with their comfortable lifestyle, they may have an expectation that they deserve the same lifestyle when they grow up. They may feel entitled to much more at a younger age.

By sharing how difficult it was to manage debt while you are maybe paying a nanny, buying diapers and formula, and trying to buy a new home, they may have more realistic expectations for what it takes to build a comfortable lifestyle. When it comes time to consider colleges, if they understand how hard it was to get out of debt, maybe they will make more financially responsible decisions such as attending a community college or in-state school. They may be more motivated to work, knowing that hard work can often lead to a better life.


Sharing your Successes

Most of us don’t achieve financial security without struggling, but we want our children to know that the hard work did pay off. So when you can afford to upgrade and buy that bigger home, discuss with your children the sacrifices you made to get there. Did you decrease your shopping budget? Manage the grocery bill better? Work extra hours for extra pay?

If your children can understand how you were able to manage your situation to leverage it into the lifestyle you desired, they again can quantify what it took to get to where you are today.

We have so many successes that we maybe don’t even think about: paying off our college debt, buying a new car, replacing a roof and paying all cash, finally funding that trip to Disney. Remember to share with your children how these goals were met. They just might have more of an appreciation for all that you do, and have a better chance at achieving their own financial security when they are adults.


Adria Meehan Siewert

Adria Meehan Siewert

Vice President, Financial Advisor