Recently on a local news station, Brooke Walker of Studio 5 discussed whether or not you should tell your children your income and financial security:
I found this to be very interesting in that I have never known my parents annual income, nor did I ever really want to know. Growing up I felt like we were pretty good. We lived in a fun neighborhood, a car to take us places, got new clothes for school and participated in extra curricular activities. We also had plenty of food on the table. Trips were a regular thing from going to Hawaii for a month or just a road trip to Southern Utah.
On Studio 5, they talk about how a father wanted to give his children a visual lesson about money:
One day, he stopped by his local Wells Fargo branch in Encinitas, Calif., and asked to withdraw his entire monthly salary in cash. In singles. It took 24 hours for the tellers to round up that many bills, so he returned the next day and took away the $100 stacks in a canvas bag.
His oldest son, Daniel, who was 15 at the time, remembers the moment his father walked into the house and dumped the $10,000 or so on a table. “It looked like he had robbed a bank,” he said.
After a pause to let it all sink in, Mr. Parker began peeling off bills. He told them about taxes, set aside money for a tithe to their church and made a big pile for the house payment. The singles piled up for soccer and scouting and hamburger night. By the end, there wasn’t much left over. “I was trying to make as big of an impact as I could, and I definitely had their attention,” he said recently.
Personally, I think that if my dad were to sit me down, pull out his monthly income and show me where it all goes I for sure would have different spending habits today. But at what age is that a good idea to do to your kids?
Ron Lieber, writer for The New York Times, says, “Your children deserve to know what you make, too. It may sound improbable, but you can begin to initiate them when they’re as young as 5 or 6, building their knowledge slowly and giving them the real answer while they’re still teenagers. Handle it right, and it will be one of the most valuable lessons of their childhood.”
I don’t think I would have got the point at the age of five or six. I never really cared where the money came from, which clearly was a problem. Definitely in junior high I think this would have blown my mind. I am a visual learner and so this would have stuck with me forever. I plan to teach financial literacy to my children at every stage. They will know the value of a dollar as they learn to work and save what they earn.