Teaching kids finance

[puppylove64]

How open are you with your kids about finances? My step son lives with us full time and is going to college next year. I feel like I should start being more open about finances, credit cards and budgeting. I don’t know if I should share our realistic information or make up fake data.

We are talking to him about majors and expected salaries and I’m fine being totally open about what I make, but worry about him saying the wrong thing to his mom.

Also when we do his fasfa next year, it says it needs my data because he lives with us. Seems weird because when figuring child support, my data is not included.

[waverly]

Ours are younger (10 and 13), so we haven't opened up as much. The 13 year old is starting to piece things together.

I would focus it more on college finances. I think in terms of setting that expectation that your household can afford to pay X towards college (if you are paying anything). Look at college websites at the Net Price Calculator for each college. Discuss which colleges they can afford the best.

Then I would do his budget based on a variety of factors. Will he have a job, and what is the expected hours and income? Will he be living on campus, off campus or at home? Do you recommend a credit card? What is the plan for the credit card and how will they pay it off? Suggest just getting one to start with. Do they have a bank account already? Will they be taking out loans? Do a sample monthly budget with income, loans, housing, groceries etc.

I don't know that I would base it off your budget because I feel like a household budget with 2 working adults and children is a lot different than a college budget.

[ssmjlm]

Very open. With no one using cash much the value of a dollar to her was a harder concept to understand. She gets it now at 10 because she's using her own money to buy stuff.

She knows ballpark salary and we talk about how we have a mortage and a car payment. I've been very open with the cost of things going up, esp groceries.

My biggest issue, and maybe teens are better, is the comparisons. We've talked more about not comparing what she has to what friends have. I know that will only get worse as she gets into middle school.

[InBetweenDays]

We're fairly open. A few years ago H bought a few shares of stock for DD (9th grade at the time) in SnapChat for her birthday and then sort of taught her how to track it, etc. I'm sure we'll do the same for DS this year. They also both have debit cards that they manage (they're tied to DH's account so he helps them manage it).

Does the high school offer any classes? DS (9th grade) is taking accounting which is giving him a general lesson on budgeting and finances but DD (12th grade) is taking a Principles of Finance course which is much more in depth. It teaches students about financial institutions, investing, credit, insurance, financial planning, etc. and how it all impacts them. They then do a “Life at 25 Project” where they take their financial situation, where they hope to go to college, ambitions, etc. and put together a detailed financial plan based on where they want to see themselves at 25 years old. It's SUCH a useful class.

[CrazyLucky]

My kids are 13 and 11. They have a financial literacy class in 6th grade and I LOVE it. DS would come home and talk about interest rates, or ask if we pay off our credit cards every month. It led to a lot of good discussions about things like why we use credit cards so much and the danger of doing that. We didn't have any class like that when I was a kid and my parents were not good with money and I think that caused me a lot of financial issues in my 20's. My kids and I talk about things like college - mom and dad are saving money so that you won't have a lot of debt if you go to a state school. If you want to go to Duke, you're going to have more debt. And we talk about if it's worth the debt. We talk about sharing because we are so fortunate to have more than we need and we involve them in decisions about which charities to support. DS has a bank account.
We have not discussed salaries with them. DS especially is not good at keeping things to himself. His school district is a good mix of economic circumstances, and I don't think he needs to talk about it with anyone but the family. I think we will be more open as he gets older.

[loira]

Pretty open. My DD is 7 and an only child, so it's harder to justify not buying her things because I don't have the excuse of "oh, if I bought one for you and not sibling it wouldn't be fair". I have started being more open about where our money goes, she knows that the bank owns most of our condo and she knows about bills.

I pay her for doing chores around the house and she also earns some money by colouring in a chart for good violin practice and speaking French at home. The hard thing is teaching her about saving money. She keeps blowing it on candy or small Ty stuffies. I know she wants these doc Marten style boots that are $40 and she keeps saying she'll never save up for them. Yeah, not when you keep spending it, girl!

[scm1011]

My DS is almost 7 and is pretty obsessed with saving money so its been a good opening. He is very irresponsible with losing items at school (hoodies, water bottles, and mittens/hats) and I started charging him for lost items. It has helped him understand the value of a dollar better (and has resulted on him keeping a better handle on his stuff lol).

[waverly]

Oct 10, 2023 12:35:29 GMT -5 scm1011 said:

My DS is almost 7 and is pretty obsessed with saving money so its been a good opening. He is very irresponsible with losing items at school (hoodies, water bottles, and mittens/hats) and I started charging him for lost items. It has helped him understand the value of a dollar better (and has resulted on him keeping a better handle on his stuff lol).

I need to do this with DS (13).  Last year he lost his coat, and I compromised by buying a super cheap coat off of Amazon.  This year, he lost his gym shorts and they are only $8, but I do feel like someone could have taken them also, so who knows if it was his fault or not.  He also lost his notebook but we have tons of extra and they are the 99 cent ones so I don't think I should charge for that.  

[stemmie]

We weren't very open until DS was about your stepson's age.

He's a little immature, so getting into the details was beyond him prior to high school though we did talk/model about thrift vs consumerism.

In addition to salary and benefits, I think it's also important to talk about costs of living. Things like utility costs, insurance costs, healthcare costs, groceries, prescriptions, gas and so on. I think my kid was in college when he learned water wasn't free and he lost his shit entirely when we told him that we not only paid for water we pay for sewers.

[scm1011]

Oct 10, 2023 12:43:10 GMT -5 waverly said:

Oct 10, 2023 12:35:29 GMT -5 scm1011 said:

My DS is almost 7 and is pretty obsessed with saving money so its been a good opening. He is very irresponsible with losing items at school (hoodies, water bottles, and mittens/hats) and I started charging him for lost items. It has helped him understand the value of a dollar better (and has resulted on him keeping a better handle on his stuff lol).

I need to do this with DS (13).  Last year he lost his coat, and I compromised by buying a super cheap coat off of Amazon.  This year, he lost his gym shorts and they are only $8, but I do feel like someone could have taken them also, so who knows if it was his fault or not.  He also lost his notebook but we have tons of extra and they are the 99 cent ones so I don't think I should charge for that.  

I only started charging after he lost like his 3rd water bottle and 4th hoodie in the span of a month last spring. It had become infuriating and now its to the point where I give him a few days to find said items and if he can't he owes me (not the whole value, but I've been charging $5ish each item). He's been saving for a drone so it really hurts him in the wallet since his only income is cashing in our seltzer cans lol. 

[waverly]

scm1011, he's also lost about 4 water bottles, and 600 gloves. But that was in the span of over a long period of time. At one point I bought the 12 pack of stretchy gloves because he had lost so many. Stretchy gloves aren't great in the snow, but if they lost everything else then it was better than nothing.

[trytobearunner34]

We are very open. My husband and I both grew up in a much lower income bracket than the one we are currently in. I was also one of 4 kids and my husband was raised by w single mom with a dad who was not in picture and did not pay any child support so budgets were super tight in both households. Our daughter is only child who technically could want for nothing BUT we want to ensure she learns the same valuable financial lessons we did. As a result we speak openly about financial matters in a developmentally appropriate way (she’s 6) and plan to continue doing so as she gets older.

[ohgillian]

I'm pretty open. I talk to them (10 &13) a lot about what things cost, about how everything is a tradeoff, etc. But I try to balance by telling them, "i'm telling you this so you know more about money; you don't need to worry at all about our finances. We are fine."

[expectantsteelerfan]

We are pretty open. We moved from a 'normal' house to a much bigger house in a 'fancy' neighborhood and the kids were old enough to understand what this meant and to ask questions about our finances, so we did have some discussions about our finances and also about what's appropriate to say in public etc. We also talk about expectations for college financing often. I also tell my kids about how my spending habits are shaped by my own upbringing (how I struggled to pay for food as a young adult on my own at times) and that means I so sometimes go overboard with buying now because of that, but it's also important for me that they learn that just because they CAN buy things doesn't mean they should and that they learn the value of things.

[pittpurple]

We talk about money with our kids. They know that we got a bigger house so it's more expensive so we can't afford some of the extras we could before. They know about mortgages and the School did a fabulous lesson with my daughter's class when she was 9 where they had to research different areas of the country to live and what salary they'd need - so they looked up the cost of rent, electricity, made a food budget etc. It wasn't comprehensive obvs but it was a great starting point to understand how it all works. She asked questions about our situation and my husband showed her the spreadsheet. She was really surprised to see how much of our 'spare' income goes to her ballet lessons for example which I think is good for her to know (she's 10).

My kids get pocket money and they choose how to spend it and we talk a lot about saving / spending etc. My son usually saves up for a couple months and buys a lego set and my daughter spends most of her money on hanging out with her friends (they go to mcdonalds, etc) and I think both of those are good ways to prioritise your spending! My daughter did want some ridiculous stuffed animal and we talked about how then she couldn't go out with her friends for a while and she worked out she could bring her own lunch and save the money while still seeing her friends and I think that was a fabulous conclusion :-)