from NYT: Why Affluent Parents Clam Up About their Incomes

[Deleted]

From the Motherlode blog. I thought this was interesting. DS1 has asked me once or twice about this and I didn't know what to say so I kind of avoided the question. It's one of those awkward topics that's made more so for being so taboo. However, I believe it when they say that people with less money do discuss it with their children. I know that when I was growing up, my mom especially told me all the time that we didn't have any money. That came through crystal clear, lol. What do you think? Do you think it is your kids' business how much money you have? Do you think you will eventually discuss it with them? If so, what do you plan to say?

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We want our kids to come to us with anything and everything. We try to be as honest as we can about sex and drugs. We encourage them to talk about their feelings.



But when it comes to money, we often clam up, and parents with the most money appear to be especially disinclined to talk about the topic.



Just 17 percent of affluent parents said they have or will share their income or net worth with their children by the time they are 18. Another 18 percent said they never would. As in, ever.



These numbers come from Spectrem Millionaire Corner, a survey that allows people with higher net worths than average (the name aside, some respondents have a mere $100,000) to sound off on various topics. Spectrem, which is a market research firm, recently allowed me to toss a few questions about family discussions of income and net worth into its mix.



The survey offers six possible reasons (and “other”) why people may not want to discuss their income with their children. Far and away the most popular response was “It’s none of their business,” with 32 percent. An identical number responded the same way to the question about why they may not be disclosing their net worth.



This most popular of responses may also be the worst possible one. First of all, it’s not true; if you’re a child living with your family, its revenues and expenses affect you in all sorts of ways, so of course it’s your business. Older children have more than a passing interest in all of this too. “Of course it’s part of their business,” said Spectrem’s Cathy McBreen. “When the parents pass away, the children are going to have to walk into their house and figure it out.”



Also, when parents shut down lines of inquiry about matters of great importance, it only serves to discourage kids from confiding in their parents or asking about other weighty matters.



The runners-up on the “Why hide?” question aren’t that much better, alas. Nine percent of parents said they worry about kids sharing family financial information with others. But if you wait until kids are teenagers to tell them, and warn them that talking about it outside of the home will make them sound like braggarts and jerks, they will usually keep it to themselves.



Another 13 percent said they were worried about how disclosure – presumably of a large income or net-worth number – would affect the kids. When I tried that one out on my friend Joan King Salwen, who is finishing up a stint as the associate head of school at Atlanta Girls’ School, she said that a comment like that is a vote of no-confidence in your child. Indeed, why would parents want to fall back on the assumption that children are motivated only by money and will aim lower if it seems as if their parents have more than most people do? Especially if those parents declare that they may not share any of that money decades hence?!



Parents with less money probably share more information. Often, they do so out of necessity, since children may shoulder some of the burden of paying the bills. Or they don’t care whether their kids blab, perhaps because their incomes are average or a matter of public record as government employees.



Why do some more affluent parents go ahead and disclose their financial standing as well? Survey respondents who did so chose from five possible explanations (and “none of the above”), and they could mark more than one. The biggest group, 61 percent, thought it was prudent to do so in case of emergency. Educational goals, like making sure kids understood costs, savings and trade-offs, were next in line.



There is one hopeful note: Just 11 percent of respondents said that they knew about their own parents’ income or net worth by the time they were 18. So the group as a whole is doing slightly better by their own kids when it comes to disclosure.



Still, this seems like one place where affluent parents can improve a whole lot more. Money is important. Kids will make big financial decisions as teenagers when it comes time to apply to college. Before they do, the least parents can do is include them in a decade of increasingly frank money talks.

[rbp]

I never knew my family's income. Based on my experiences in childhood, I'd say we were upper middle class. But based on the fact that my parents paid a majority of tuition for two kids at expensive private colleges, my family's income may have been more than I thought. My dad was born in the Depression, though, so he was naturally frugal and rarely splurged.

ETA: I don't really want to discuss my and H's income with my mom/ILs, but if we knew all the details of their financial situations then I'd feel more compelled to share. So maybe it's better this way?

[dancingirl21]

I did not know my family's income growing up. I knew that we were probably near the upper middle class, just based on vacations, material things, etc. We were comfortable. And then my parents got divorced and we were less comfortable. 2 mortgages, 2 sets of bills and all that.

I don't know how I feel about telling our kids how much money we make. I'm not certain I want DS knowing the number and having him repeat that to someone.

As long as we can provide for him, I think he will be just fine.

[patbutcher]

I did not know my family's income growing up. I used to always hear about "cash flow issues" from my stepdad but then he would buy marble countertops for the kitchen or something so I think he is just spendy. We were definitely upper middle class.

I went to live with my grandparents when I was 10 and my grandad was the stereotype of a frugal scotsman. Always harping on about lights being on, I remember if I went shopping with my gran we had to come home and show him all our purchases. And he gave her 100 pounds a week for household stuff.
That said, my gran is still alive and living off of his pensions so I think he set her up well.

ETA - I'm not sure about telling dd. Maybe a rough idea but I do worry about her telling people (especially my ils).

[MNH2013]

Jun 24, 2015 8:36:09 GMT -5 @littlemoxie said:

We absolutely plan to talk about it with DS. I don't know that we'll deal with all net worth, but definitely our HHI and how we are much more fortunate than others who didn't have the advantages we (and he) had/have/will have. How to save responsibly, prioritize, etc. He will know that although we had advantages, we had to work hard and be responsible and "earn" it to some extent - and he will have to do the same.

Whether or not he knows how much our houses are worth, or the exact amount in our retirement accounts... I'm not sure it's as important, so I won't focus on it. I won't avoid it, though.

Ditto. (That's all I got this morning)

[Deleted]

The thing that makes me uncomfortable wrt this topic is how my husband has a tendency to spoil them. For instance, he always brings back a present for them when he's on a work trip. They've also come to expect gifts for when we go on vacation so they have something new to play with while we're one. They also get gifts on each other's birthdays ("bribe" gifts). He's OOT this week so he'll come back with Legos for them on Friday. We're leaving for vacation next Friday so they'll get *another* present of their choice, meaning another set of Legos. After we get back, it'll be DD's birthday and the boys will get yet another gift. This is in addition to the thousands of dollars that we've spent to send them to camp and do their activities. It's just so different from how I grew up. DH grew up similar to me but I think it makes him happy that he has the money to spend on these kinds of things. I've mentioned this to him once or twice but he thinks I am overreacting. But how is this not spoiling?! They don't need this much stuff.

[carolinagirl831]

I think it important for kids to have somewhat of an idea of what their parents make and what that lifestyle allows. I think that can help them have more realistic expectations of their own future and career choices allow

[carolinagirl831]

My DH is a financial planner and thinks talking to kids about money and own finances is really important. Of course how much you get into depends on the age

[undecidedowl]

My parents were very open about how they felt money should be spent/handled and we frequently discussed savings, being frugal, etc. They were very hush-hush about any actual numbers though. When I finally convinced my mom she should tell me my dad's income she told me the net value, she didn't even know the gross value. That in itself felt very upper class to me.

ETA: I will say, I think much of the reason my parents didn't want me to know they were upper class is because they wanted me to know how to live a middle class life. Because of this, the large difference between the money I was raised with and the money I earn is not a big change to my lifestyle.

[leonard131]

My parents didn't talk about this much growing up.  We lived in a very affluent area so while our HHI was way above the average compared to others in my community it didn't seem so much so.  We traveled, my mom was SAH, had a second home, and never felt pressure for money but it was a different level of those I grew up with.  We went to FL - they went trips to the Caribbean and stayed in 4 star resorts.  I got a used Mazda as my first car they got brand new Jeep Cherokees or BMWs. I know I was very lucky to get the things I did.

When I was about 25 my dad started sharing his financial information with me as I became the executor of their estate.  He made some good financial decisions later in life so their income has grown quite a bit. He still shares this information with me (almost to much- it is like he thinks every time I see him he will drop dead so I need to have the most up to date information).

I plan to talk with M about these things.  I have feeling he may feel a little like I did growing up.  While H and I make a good living I have feeling compared those he will got to school with it will be lower. I am prepared for questions like "why don't we live in a bigger house" or "why don't you drive a xxx car"?

Although they didn't talk about their income and we never wanted for anything I do think my parents instilled a strong sense of things don't get handed to you and we work for what we have. Both my brother and I both worked while in HS and college, we had certain chores we were expected to do and we had expectations of us.  I hope I can instill these same things in M.

[rbp]

Jun 24, 2015 8:58:08 GMT -5 leonard131 said:

My parents didn't talk about this much growing up.  We lived in a very affluent area so while our HHI was way above the average compared to others in my community it didn't seem so much so.  We traveled, my mom was SAH, had a second home, and never felt pressure for money but it was a different level of those I grew up with.  We went to FL - they went trips to the Caribbean and stayed in 4 star resorts.  I got a used Mazda as my first car they got brand new Jeep Cherokees or BMWs. I know I was very lucky to get the things I did.

I didn't grow up in an affluent area, but my parents seemed to be friends with some of the wealthier families in town. My parents were having a house built at the bottom of a hill, and I told my dad "doctors live on a hill and bankers live in a ditch."  :?

[bowies]

I think I asked once when I was in high school. It sounded like a lot to me then but now I realize it probably wasn't. We were comfortable but not well off. I went to private school and my mom went back and forth between SAH and working PT, but we didn't live in gigantic houses or take expensive vacations or drive nice cars. I voiced concern recently when they bungled a real estate purchase but I always get a "your father has set us up for a nice retirement" stonewall. They are quite vague. I'm similarly guarded about our finances, learned from them I suppose.

I think my H and I make smart decisions about our finances without having role models (in my H's case) or transparency (in my case). We were both taught to live within our means. I think we could save more aggressively or invest (neither one of us knows anything about it) but I don't think we would have learned that from our parents at all, even if they had been completely open.

[Deleted]

Jun 24, 2015 8:56:49 GMT -5 @vicmo said:

Jun 24, 2015 8:42:47 GMT -5 CheeringCharm said:

The thing that makes me uncomfortable wrt this topic is how my husband has a tendency to spoil them. For instance, he always brings back a present for them when he's on a work trip. They've also come to expect gifts for when we go on vacation so they have something new to play with while we're one.

What does spoiling the kids have to do with knowing your finances?

Well I think it can lead them to thinking that money matters less than it does. Like the things that I was raised to regard as special treats that I should really appreciate because they're rare, they take for granted. Going out to dinner, going on vacation, getting new toys, taking lessons, going to camp, etc. It irritates me when they don't do what they should at their lessons. I get that they don't understand the value of money but at the same time, I think it is mostly our fault for giving them too many things. I want to give them things but I also want them to appreciate it and not take it for granted. Does that make sense? 

[Deleted]

Jun 24, 2015 8:59:08 GMT -5 @this said:

I'll take Most First World Problem ever for $200, Alex.

Haha true. But I thought it was an appropriate conversation piece for Money Matter Moms, lol.

[lolo]

I'm more inclined to share budgets than net worth figures until they are older.

[rbp]

Jun 24, 2015 9:04:04 GMT -5 @mrswindycity said:

I know my mom mentioned in passing how much she made, but that number means nothing when you don't know how much expenses are.

This sounds a lot like people on MM claiming they're middle class because they only make $250K in HCOL. LOL

[longtimenopost]

I wouldn't stress too much CheeringCharm. How you are raising them sounds like how I was raised - gifts are and always have been my mom's love language. As long as they are not demanding things on top of what they've come to expect, you're not ruining them for life. My parents never talked much to us about money because it wasn't a worry, but I didn't know how much they made until I was older (around 150-175K in MCOL). I got an allowance and earned money for chores so I understood the value of a dollar in kids terms, but I didn't understand the thousands my parents dropped a year on my competitive dance team or my brother's select baseball. I think you can teach good money lessons without discussing every detail of your financial picture.

[kershnic]

I grew up upper middle class. My parents shared this information with me when I was in high school, and I think it was beneficial. But it was also too little too late in terms of a broader education on money. My sister is 6 years older than me and I distinctly remember my dad telling me he thought he had failed her in this regard and wanted to do better with me.

My parents paid a lot of money for my college education, and I don't think I was well prepared for understanding what career choices would perpetuate my financial expectations. I'm sure in some subconscious place my parents figured I would meet a smart man with a high paying career.

We don't and won't have as much money as I grew up with, although I don't anticipate us struggling either. I hope we'll have the courage to be open with our girls and set them up for a strong financial future.

[undecidedowl]

It's a little lol to me now how protective my mom was of their financial status. I mean, my dad's profession kind of gives it away, in addition to having a SAHM, going to private school, etc. The income itself is just a number.

[JayhawkGirl]

We probably will when they are older. For now, we have them in the room when we meet w/our financial advisor so they overhear healthy discussiom about saving. We talk about the bills, ie this month we are focusing on the electric bill - last month was $132, can we get it lower this month by being better at turning off lights and not leaving the doors open?

My parents still refuse to discuss this stuff. I grew up getting the mail and hiding anything that looked like a bill for my mom so my dad wouldn't blow up. So yeah, we are actively taking a different approach.

[carolinagirl831]

It's also silly to keep quiet about your house, really anyone can Google and look that up. Even a lot of professions you can look up state employees salaries.
And some professions just make more. I think kids should know a doctor or hedge fund manager makes more than say a teacher. Sure we all just want our kids to be happy, but life is certainly easier with more money (to an extent obviousky) and I'm not my kids must have a high earning profession, buy I think it's important to teach what income I'd needed for certain lifestyles

[kershnic]

Oh, also, an interesting anecdote. I was in a work training once on dealing with secrets in families in family therapy. The trainer asked us to discuss what topics were taboo/secret in our own families of origin. Most of the people in this training grew up either poor or somewhere in the lower half of middle class. We talked a lot about things like infidelity and child abuse, which all made sense and resonated with the whole group. I brought up money. The few others who grew up with more money nodded along, while everyone else was surprised and confused about why this would be a secret.

[cinco]

My parents were both teachers and DH is a police officer. It's public info how much they make, and we've always been fairly open as a result. They seem to both be occupations where people don't mind asking about salaries. No one asked me when I was working, but I've heard lots of people ask my parents and DH. My parents spoke to us about finances and we intend to do the same with our kids. We are not affluent though, so maybe I should see myself out of the discussion.

[SJ]

Jun 24, 2015 8:36:09 GMT -5 @littlemoxie said:

We absolutely plan to talk about it with DS. I don't know that we'll deal with all net worth, but definitely our HHI and how we are much more fortunate than others who didn't have the advantages we (and he) had/have/will have. How to save responsibly, prioritize, etc. He will know that although we had advantages, we had to work hard and be responsible and "earn" it to some extent - and he will have to do the same.

Whether or not he knows how much our houses are worth, or the exact amount in our retirement accounts... I'm not sure it's as important, so I won't focus on it. I won't avoid it, though.

This is how I feel, especially the bolded.

I feel very strongly that our kids learn to live within their means once they are adults. And that their "means" when starting out are very very very likely not going to be the same standard as ours. They don't get to skip the ramen phase just because we have a high HHI.

I'm not sure if/when kids need exact numbers, but the fear of them telling their friends is not going to be enough to stop me from having frank and open discussions with them about money. Kids tell kids all sorts of things, and it's not all true. Any nosy parent can look up our house on Zillow, so if DD tells some kid on the playground that I make xx amount of money, what's the harm? A little awkwardness, maybe, and that's IF the kid believes her and IF the kid goes home and tells the parents.

In most cases, I expect teenagers to work and certainly college students to fund their own "wants" and extra stuff. There are a million factors between here & there that might change my opinion on this, such as if the kids struggle in school or excel in sports which takes up their time or whatever, but overall we have no intentions of funding their adult lives.

I like the basics outlined here  moneyasyougrow.org/

[boxerdog]

My parents never ever told us anything about money/income. We were fairly well off (upper middle class?). I think they didn't want us to compare with our friends or something? I don't really know why they didn't tell us.

[simpsongal]

I like the Huxtable approach - "your mother and I are rich, you have nothing."

[Marmee]

My parents kept a checkbook register...I saw it (you know just from looking over at the grocery store)in the negative ALOT. It stressed me out even as a little kid. They never got bank fees because my Dad was the VP. We lived an upper mc lifestyle but had no real net worth most of my childhood. Almost everyone I knew was middle class. I didn't know their salaries until I was an adult. My parents fought about money non-stop. My childhood has some fun memories but overall I was a very stressed out child.

My kids have asked how much money we make, how much our house cost, etc. I won't tell them because they'll blab. We are definitely upper mc, more so than our parents...but we are not in the same circles so my kids don't have the same experience.

[irishbride2]

My mom was pretty open with me about what she earned. She wanted me to understand that I was privileged and not take it for granted. As a CPA, she spent a lot of time teaching me about expenses and such as well.

Once I was old enough to read the paper regularly (7th grade or so), I generally knew what my dad and step dad made because it was in the news paper.

BUT it wasn't until the last few years that I learned about income outside of salary.

[felicity]

We plan to teach DS a lot about money and investing from a young age, but the actual numbers that we have probably won't come out until he is much older. I think it will depend on his maturity and how we think he'll respond to knowing our net worth and salaries. At some point I hope we feel like we can tell him, but I don't want him getting any ideas that we can just be his personal bank or that he won't need to save for retirement since someday our money will be his.

[Deleted]

I knew when I filled out my FAFSA forms. My parents were definitely middle class though. I didn't know about their retirement and pension until they divorced when I was 30.

I'll probably tell my kid when it comes up around college age. Maybe sooner as we talk about funding his college generally.