Why You Should Tell Your Children How Much You Make
nytimes.com
nytimes.com
I was raised not knowing any of that -- my mother absolutely hated talking about her finances with me. So I never really had a clue what a reasonable wage or salary was, or how much I would actually lose to taxes, or what a reasonable budget was... and of course, none of that stuff was taught in high school, either.
Even with the FAFSA, etc., I remember being told to just sign it and my mother would insist on taking the form and going to fill in the blanks herself.
I think that parents talking to their children about this kind of thing provides them with a healthier financial barometer overall, which would be useful when they start getting pounded with credit card pre-approval letters out of the blue.
Edit: Even now, as a 29-year-old adult, I have no clue what my mother makes, what (if anything) she has for retirement, what she inherited from her father last year, the status of the house she lives in, etc. She just won't talk about that kind of thing because it "has nothing to do with me."
As a child, it can be a handicap, but as an adult, it can be massively stressful. I can understand the need to be independent (especially as a single mother), but money is just a sensitive topic when there isn't a lot.
They ran their own business until I was in my mid-20s, so during school holidays we would often go with them to work. In addition to us helping out in their warehouse, they also used to get us to do things like writing up the deposit slips for incoming cheques to take to the bank.
They seemed like menial chores at the time to keep us busy, but it really did help us understand how the whole thing worked. They essentially showed us "this is how we do it and why" rather than saying "this is how you must do it" and considering nothing like that was taught to us at school, in hindsight I am very grateful for it.
So yes, definitely bring your kids in as much as possible on finances - even the most basic things like budgeting to live within your means is essential.
Just curious, what would you do with that information if you had it?
If I had access to that information I could make educated guesses about how to care for them as they age. Are they able to retire? How long can they live before they are out of money? How much do I need to have saved by the time they are X years old to ensure they are cared for?
Unless I was going to let them live on the street, it's something I must consider.
I don't want to disclose my income because my kids are unlikely to ever earn what I do - and I don't want them ever to feel bad about it, and I don't think the budgeting aspect would be very useful/instructive given that it's "not normal".
We have lived far below our means, and I'm a known cheapskate. While my kids know we're "comfortable" the frugality seems to have rubbed off. They're savers (agonizing over substantial purchases, delaying gratification) and when they earn wages or get monetary gifts it goes in the bank rather than into clothes/gadgets/cars. I'm proud of that. They recoiled at my hints that they might consider a college major that would lead to a decent wage, claiming that they don't care about status buying and owning stuff. I hope it lasts beyond youthful idealism.
So here's the thing. If I show them my salary, it's likely 3X to 4X what they'll ever earn (based on median wages for college grads) so I can't show them "reasonable". I can show them some sort of freak-show budget with >60% going into savings, but it's still not likely to be very useful to them.
Part of me wants to share this info, and I'm happy to hear other opinions, but on balance it seems like it could do more harm them good. They're already financially wise for their ages. Maybe I should just show them our bills? Then they'd at least know what it takes to run an average home.
As a child (rather than a parent), for me, this:
1. Reinforces that saving is something everyone should be doing no matter what their income.
2. Helps reassure me that parent is making and saving enough to retire.
3. Gives me passive reinforcement in knowing that other people are also budgeting [despite whatever they make].
If you still had young kids, you could share instead your budgeted amount. Just don't even consider the savings income as being in the picture.
I think the strength of the lesson is to go from "wow, that's a lot of money on the table that I can touch," to "wow, almost all of it is gone due to overhead."
A secondary lesson is the concept of private information, formation of trust with sensitive sharing, and the harm in gossip.
I think the key is to always explain your thinking process to your kids. That is the important part, and that will translate no matter what their future earnings are.
I think you hit the nail on the head with the comment that it's explaining the thinking process that's most important. I've long had a goal of being able to retire early, and that has driven much of my frugality. For most people, the key long term financial security is living below your means, and that's really the message I'd want to communicate - not that you need to earn a ton. I can also explain that my savings are intended to last through 30+ years of retirement (one can only hope..) with some cushion against a market crash, etc. This seems like the right approach to sharing our finances - and how the relative balance of income, expenses, and savings all factor into my goal of early retirement.
I realize now too that part of my discomfort in sharing income information comes from the fear of either showing off, or seeming excessively materialistic - but with this approach of "goals driving behavior", it need not seem that way at all.
Thanks.
That's fine. I still earn enough to live very comfortably off half my income. I'm perfectly happy with that.
If anything, knowing the figures will help kids plan their life accordingly and with more anticipation; the only drawback is I'm not good at holding secrets and a few friends have known about my father's salary.
The most important is probably something your kids already know: My father has a belly, and that's the result of long years of stress; In other terms he paid his wealth with his health.
I didn't understand the need to be frugal, when I was young, because of this. But dealing with my own money and my own jobs, gave me hands on experience with the value of being frugal. This went well with their sharing of their own experiences - the value they got out of being frugal.
The lessons sunk in well. It's not just "savings are good" and a list of abstract rationalizations - savings feel good because I absolutely get it why they're good to me even this moment.
Understanding my grandfather's wealth taught me other important things beyond frugality, however:
I was able to learn from my grandfather's success about managing money - the value of compound interest, savings, calm and diverse long term investments. The dangers of panicked short term day trading.
I was able to learn from my extended family's failures with managing money - putting all their eggs in one basket, throwing good money after the bad, the disadvantages of lending to family - really underscoring what these mistakes can inflict on people, losing more money than I'll ever earn.
All the frugality in the world won't secure one's financial future if you can't resist shoving a retirement fund all in on the housing market. Or into a tech bubble. Or any number of baskets you couldn't see were going to come to an end eventually.
tl;dr As someone in a similar position to your kids, I think your reasoning is sound.
I think annual income is just a single metric in a much larger equation which should be discussed by every family. E.g. the realities of what support you might need in the future, or what support you might be able to provide.
We would often have family budget meetings, where we could all make our cases as to why we should spend more on one thing than another. Of course, my parents always had the final say, but they would listen to me and explain why they made the decisions they did (sorry, your sister's braces are a higher priority than your PowerWheel car).
Because of this early exposure, I never had the same financial problems my friends did, even when I was a very poor student and recent grad. I never accumulated credit card debt, nor did I buy a car that was too expensive for my budget. I always saved for retirement, starting with my first job. Budgeting and money management is just second nature to me.
I can't think of a single argument as to why you would want to hide this valuable learning experience from your kids.
For me, the top ones to bubble up are
1. Shame
2. Embarrassment
3. Trying to shield children from difficulties
Same with shielding your children from difficulties; they are going to sense things, and their imagination will be worse than the reality. Tell them your problems, but do so in a way that conveys your confidence that you can overcome them. You are teaching them about life, which is really just a series of difficulties that you overcome.
To avoid financial information being compared between families. This already happens via secondary signals, like clothes and possessions, adding direct financial comparison makes the poison stronger.
A better way is to make a toy budget based on allowances.
I doubt people make a rational decision not to do it; they just avoid it because it makes them feel bad.
Are you really going to teach tham that it's bad?
If they still believe in fairy tales, santa, etc. and believe that life ahead is a bed of roses, it's so easy to fall off the wagon.
A few years ago in Guatemala I bumped into a bunch of American final-year dentistry students who were volunteering down there. They were all around 22-24 and extremely friendly, so we got to talking.
It eventually came out that they all knew they were going to make ~$120k a year when they started work, but they had no idea what that meant. One guy admitted he had no idea if he'd be driving a Porsche or a civic on that salary, and another wondered if he could buy a house outright, would have to get a mortgage, or wouldn't be able to afford a house at all and would rent in a share house his whole life.
I honestly believe their parents had done them a massive disservice.
Seeing Lexus and Audi owners in the frugal list is kind of funny.
"Take the Porsche 911. Its buyers are 86.8% male with the average age of 51 and median income of $390,000."
[1] http://www.forbes.com/2008/02/05/cars-sex-signals-forbeslife...
[1]MSRP:
911: $85k
Boxter: $52k
@zaroth probably has NYC/SF in mind, where most $120k+ salaries probably are. Pay $40k tax (fed+state+local), at least $30k for rent+utilities, and you're left with $50k for food, clothing, gym, social expenses, travel, and everything else. Out of that, you'll be paying for gas, tolls, insurance, maintenance, and parking. Parking alone will run you $5-10k (unless you're okay with street parking and having that sweet ride scraped up end to end by a truck next week). You could do it, but not because $120k is Porsche-driving income.
How is it possible for someone to survive okay on $40k/year, but if they earn an additional $80k/year (maybe an extra 40k/year after taxes?) they can't afford a $50k car? As I said, it comes down to priorities. (We're assuming that they don't live in NYC. I don't think it's fair to use that as an example for car affordability.) Even if we assume 80k/year as the baseline, that's about $20k/year extra after taxes. Can you buy a Porsche with cash without saving any money up? No. But if you save for a little bit or get a 3-5 year car loan it's easily affordable. So as I said, I believe that anyone who makes that much and wants a Porsche can easily make it happen.
[1]and don't have kids/mortgage to pay off.
And Clasic 911's are quite afordable and you dont get the massive loss you do on buying a new one.
Hey, my wife doesn't know how much I make. But nor does she care. If she asked, I wouldn't hide it :) It is unusual to know other people's income in the culture I grew up in and live in here in the UK though, so it's not too bizarre.
But I can't imagine not even stumbling over it by chance after at least a few years.
Apparently you're a lot less likely than I am to let your bank statements on your desk or the kitchen table.
There's a reality TV show in Sweden, called the teenage boss(tonårsbossen), where in each episode the teenager of a family get's to control the whole budget for his family for one month. Surely there's selection bias on what type of family they put on the show but it's quite revealing to see how kids think when they get that much money because they don't understand how much or how little it is. Even when the hosts help them lay out a budget they always always end up overspending. First they go buy tons of clothes the first week, they give their parents less pocket money than what they themselves normally got before, the food bill is always double because they don't know what's normal price for grocery items, there's always some recurring monthly expense that's easy to forget like gas for the car, they don't take into account unexpected events like the fridge breaking down, nothing goes into savings etc etc.
I think every kid would benefit greatly from doing this kind of exercise at least once, at least letting them join the budgeting and let them see where the money goes.
I still buy tuna that's 0.1 euro per kilogram cheaper ... I really don't know whether the savings are ever going to add up to anything and I'm almost certain it's not worth the 30 seconds it takes to check. But I can't not do it.
Stores are good at using sales to trick us into comparing prices as if we were going to buy on sale items anyways (in which case money is definitely being saved) instead of comparing it to what our actual behavior would have been had the items not been on sale.
My parents have always been on a tight budget -- they got most of their cutlery, plates etc with loyalty schemes for the biscuits I'd eat every morning. They bought a second-hand campervan so that they could go on holiday without paying for hotels, and could afford a house only thanks to old-school "socialist" policies here in Europe. They always fixed what they broke and always talked about the importance of using money wisely, for real things etc etc. They were also politically active, so I know how the sausage gets made, so to speak.
The result? I've always been rubbish at managing big sums of money. When my salary went over a certain threshold, I just stopped caring. I get anxious at the first sight of debt, yeah; but in many ways, that's also a handicap because it stops me from effectively leveraging debt as an instrument of growth. I can't get myself to talk about money with clients, and I'm thankful someone else does it for me. I used to spend days looking to save a few quid on this or that £20 gadget, and now I buy my cars from an expensive official dealer that is clearly overcharging me. When numbers go over a certain threshold, it just becomes "funny money" and my brain switches off. Right now I'm probably living beyond my means and balancing my budget by pure luck, I just have no idea.
Growing up poor can give you a certain inner fire and a sense of the importance of money in society; but it doesn't necessarily give you a full picture, in the same way knowing how to develop a simple webapp with Django or Ruby doesn't mean you know how to implement a scalable and highly-available system with queues, nosql, AWS orchestration and so on. You know the value of a penny, but not necessarily the value of a grand.
>I earn 1.5E5 units per year. After 20% taxes that's 1.2E5 units.
>My mortgage is at 4E4 units.
etc
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
I found it provided a very useful perspective.
So, in short, try to live on less, put the rest in the bank and don't spend it. Live on what you need, avoid needless luxuries. And avoid credit card debt like the plague, right?
Generally the question wasn't about how much money we made, rather it was about how money "works". And why would you save it rather than spend it, and what is debt, and what are luxuries. We also made some of the things that other parents were paying for out of pocket, come out of their allowance. That exercise forces them to choose amongst a couple of things to spend their money on, and they get to experience both good and bad choices. Like spending money on going to a movie versus waiting and buying it as a DVD and having a movie night at home with your friends. Same net expenditure of cash but very different experiences.
And we tried to impress upon them the notion of 'current' money (money in the bank) 'future' money which was inbound assuming you met the conditions, 'mandatory' expenses, and 'optional' expenses.
The goal was to show how saving money "pushes" it into the future while taking on debt "pulls" money from the future into the present.
I think in general we were reasonably successful. They all knew how to balance a checkbook and make a budget when they got to college. The hard part as a parent is to know that you could make a temporary hardship "go away" but holding back so that your kids can get the experience and feeling of getting past it. The trick is doing it early, so the 'hardship' is they don't have any money left to buy ice cream from the snack shop, rather than something more serious like coming up with enough money to pay first and last month's rent on a new place to stay.
The only thing I really didn't like about the article was responding "Why do you ask?" which is always heard as a challenge by my kids, as if they have over stepped their place by asking a question. I much prefer, "Great question! What are you trying to figure out or understand?"
Huh? Really? That's radical? I always knew how much my mom made. Do parents really keep this from their children, the same way they keep it from other coworkers?
I knew where all the paperwork was kept in the house and had access to the safety deposit box where he kept copies.
Kid-me would have been absolutely shocked at how many potential candy-bars/toys/etc. are being spent on adult things like rent or gas or insurance.
I think starting talk about budgeting and managing money needs to happen at the same time as kids learning about how money works. I never had a time that I knew about money but didn't know about budgeting; they went hand in hand. Because of this, I have never had any of the standard financial issues a lot of my peers had (never ran up credit card debt, always lived within my means, saved for retirement from my first job, etc).
I guess my question is more "Why NOT share this important life information with your kids early on? What is the point of keeping it from them?"
All we knew was that we were living within our means, that mom and dad made enough - but that more was always better - and that the family budget was always made to fit inside my mom's (lower) salary, just in case.
Worked out well. We knew better than to bug him for stuff. He ended up socking a bunch away. And, we still managed to learn about the value of money when we got our own jobs - as kids.
All without knowing exactly how much my parents made.
Although I do understand if money is really tight, then you might not want to worry the kids.
As in real poor, not, I bought a 4 bedroom house with a huge tv and boat and now I'm worried about being laid off self induced poor, but struggling poor.
But, some kids worry. Having to tell them we have to be careful with money, that we can't do something because of money... eh, that introduces an unnecessary thing for them to be concerned about when they're only 6, or 8 or so. They're already terrified about death, plus all the other "stresses" of whatever kids deal with (getting to the bathroom on time, not being made fun of, studying, etc.).
So my line to my kids is: I earn enough, and I always will find a way. You should never worry about this. Don't let money be the deciding factor in decisions. Even at one point when I was a kid and we were on food stamps, my father always tried to make it clear that money would not be a concern. Dealing with teen stuff, no matter how insignificant it now appears, plus worrying about my parents budgeting? What's for?
As far as "Why can't I get <newitem>?" -- I don't buy them every toy they want, but that's due to clutter and accumulating shit. I let them get any new toy they want, if they trade in several old toys (so that they'd approach only having a few, plus presents that don't require trade in). That's a separate discussion though.
I don't like this at all. If you decide to send your kids to private school, don't lord it over them and make their education a source of guilt to keep them in check.
> don't lord it over them and make their education a
> source of guilt to keep them in check
I'm happy to give lessons but I'll never give an exact net worth. Stealth wealth FTW
http://www.joshuakennon.com/stealth-wealth-why-americas-rich...
Unless transparency is of the utmost importance to your
occupation, such as sitting on the United States Supreme Court,
it is advisable to keep a significant portion, if not a vast
majority, of your holdings, income sources, and assets a secret,
even from the people you love; your spouse and the IRS, the
obvious exceptions.
If so, and sorry to veer off into a different thread, but maybe salary and home value are good answers to "I have nothing to hide." :-)
Many people harbor guilt or are otherwise insecure about money.
Many/most people are basically rational and understand things in somewhat reasonable terms, even if greed is problematic. For example, Bill Gates is worth like $50 billion or whatever. I'm not rushing to take his money, company, or job.
Yet, if I know that I'm charging $85/hr. for developer consulting when my competition is charging $150/hr. perhaps I'd be better off adjusting my rates higher. Or, at $250/hr if I'm already top of market maybe I don't have as much room to raise my rates.
Knowing that I can make rational decisions about what to charge and so on and people won't freak out about that. The way people handle salary negotiations by and large is really bad simply because we are a nation of price takers, not price setters. Thus, the majority takes what they are offered and doesn't bat an eye.
The handful of people with professional negotiators or who are good negotiators themselves are making far more than everyone else.
If you tell your kids how much money you make and explain why, they have a better chance of making the same or more money than you do.
What I can remember intensely, is thinking that the amount of work that seemed to occur for what we had seemed obscene. It was very difficult not to see that as a failing in my parents. (I don't feel that way now). Why would they choose to work for such low pay? The people on the TV, on the Internet seemed to be doing well.
I try, but it's hard to not feel despair when reading these sorts of articles. There are so many issues with this... the college debt throwaway, for example. The choice looks completely different to a poor child in social housing, than it does to a child whose parents are well on the way to owning the family home outright.
Basically: instead of performing QE by giving all the new money to banksters, we give a Universal Dividend to all human being, at a rate determined from the average lifespan, so that each human being gets the same relative amount of money during his life who ever he is, and WHENEVER he lives. (Of course, this doesn't precludes normal economic exchanges, and therefore differences in paychecks, but at least the QE are done systematically in a reasonned system, contrarily the aphasard releases of the Fed). (For the European Union, given the average lifespan here, this would give a Universal Dividend of about 500€/month).
And yeah, some of that is lifestyle, but lowering your standard of living is a lot harder when you've got a wife and 3 kids.
This really made me cringe. Specifically why should you admit to your kids that what they have is a privilege. Isn't it the same as saying we're rigging the contest? We're making the world more unjust?
Your kids should know that is not really that good for them to be away from the poor/slow/racially inferior/wrong religion kids (or whatever your reason is), but it's actually really harmful for the public school kids not to have the kids who can afford private school in the same class.
I think you'd be well served reading the works of Ivan Illich (in particular Deschooling Society), John Taylor Gatto and John Holt that all just about debunk the fundamental idea of schooling as inherently inefficient and originating in a rather peculiar turn of events during the 19th century which had little to do with actually educating the masses.
That said, I don't think most private schooling is a proper solution either, but rather free/democratic/Sudbury schools, unschooling, apprenticeships and a general rise in people associating education with autodidacticism rather than formal institutions.
I think we'd all agree this would be a perverse incentive. My point is that there are already a bunch of advantages privileged kids get: more money, more access to culture, better social connections do we really need to actively try to rig the game any more in their favor?
Let me rephrase my previous post:
"Listen kiddo, since your dad got a high score in SAT he can apply to get you a 500 points headstart. Other kids can't get it so make the most of it."
You can still choose not to send your kids to private school if you feel it's an unjust advantage.
Anyway, I think the impact on the other kids is much more important than whether it's an advantage or not.
If giving the advantage to one kid removes an equal amount from the other kids, that's bad.
If it removes even more from the other kids, that's terrible.
If it doesn't affect the absolute education level of other kids, then probably go for it, even if it's unfair.
Raise the average quality of education, even if it's selfish.
I think it's important for people to be aware of the privileges they can and do take advantage of. Even (especially?) kids can benefit from learning this early on.
Your kids should know that is not really that good for them to be away from the poor/slow/racially inferior/wrong religion kids (or whatever your reason is), but it's actually really harmful for the public school kids not to have the kids who can afford private school in the same class.
So you're saying that parents should intentionally give their kids a (presumably) inferior education, just because others aren't quite so privileged?
My opinion is that recognizing and doing something about your own privilege shouldn't be about handicapping yourself, but should be about helping to elevate those without the same privilege.
Now, you can argue that putting the more-well-off kids in a regular public school would do that, but the problem is it's another one of those solutions that only works if everyone does it simultaneously. And that's just not something someone is going to be able to make happen. So, instead, you have to compromise: you give your own kids an advantage that some people may not have access to. If you have the ability, you might also try to help out the less-advantaged kids by donating time or money (or something) to improving their education in other ways. Certainly not a perfect situation, but many families don't have that much wiggle room in what their finances will allow.
Of course, this is all assuming as fact your assertion that private school = rich, smart kids and public school = poor, dumb, disadvantaged kids, which... I don't really buy as a blanket statement.
I personally don't believe in solutions like charity and volunteering to make a society more egalitarian and fair. I'm thinking specifically at the impact of this type of philosophy on American society vs advanced socialdemocracies like Scandinavian countries.
If you realize you have a cultural or economic advantage I think you should really put it to use by sending your kid to the same school as everybody else and improving it passively by their sole presence, and actively by making your local public school as good as possible for everyone else.
I remember, when I was a kid, any cash gifts that I got on my birthday, festivals, etc. would be divided in two equal piles. 1/2 would go to my savings account, and the other half would be given to me to do with as I pleased. This was my parents way to encourage savings.
A bit later, when I was in the 5th of 6th standard (we don't call them grades), and my parents spoke to me about their investments in the stock market, I began saving up my half of the gifts (from the last paragraph) and invested that in stocks. They really liked me doing this, and decided that they will match all my investments in stocks (really tiny sums of money then) provided I do not sell until I am eighteen. I realise now, they wanted me to get into the right kinds of stocks. Stable enterprises, with good leadership, etc. After seeing me doing this for about a year, they handed me my savings bank account, with all the 1/2's of all cash gifts I had been getting for all my life (about 14/15 years). This was there way of telling me that they had some confidence in my dealing with money. At around this same time, my dad was buying a new office. He spoke to me about the loans that he would be taking to buy this. There was some cash that I had (a gift from my grandfather, to be given to me when I turned 18) and I asked him to use that to offset the loan. I'd already realised, that I was not going to need this money until 18, and it made more sense to use this cash and offset the loan. Why pay more interest to banks that you need to?
On the whole, there have been a lot of incidents in my life, where my parents have been rather open about their income with me. Now, I'm 2 years out of college, I see the difference, in that, I am able to advise friends and colleagues, some older than me, on where to invest cash, how to save tax and a few stock tips a year. (I'm still a really long term investor :) )
I would like to think I'm a moderately successful entrepreneur with a decent ability to manage personal and corporate finances. I'm thankful I didn't have that "adult" stress on my shoulders and was allowed to just be a kid.
There's a line on the FAFSA form.
It is important to teach kids to live with in reasonable means and how to prioritize needs over desires to stay within budget when everything is accounted for. It is not important in my opinion for them to know an exact amount anyone makes, but the article does outline a way the former was achieved by doing the latter.
FAFSA is supposed to provide some degree of assistance for nearly everyone in the middle class, and overwhelming amounts for working class families.
We left money on the table at a time when money was short because my parents didn't want to break out the tax forms, and assumed assistance was for Other People.
> Keep in mind that if you are planning on applying for financial aid for college, you will have no choice but to disclose your financial information when your child is a senior in high school. That’s because anyone who wants financial aid must fill out a form called the Fafsa. It asks for information about income and assets. Parents sign it, and so must the students; everyone attests to the accuracy of the information.
Some years later, as I got good at personal finance and started helping family with budgeting, debt reductin, taxes, etc -- I saw all her financial info and realized she wasn't lying. She really did have very little. I was lucky to have been able to attend college.
(Everything's fine now, but I still carry some of that guilt for not believing her.)
I can confirm for you that it is not inescapable. And, yes that does make paying for college quite a bit more difficult for the student.
Now I am older and they desperately beg me to know about my finances. I don't answer and I plan on never giving them the slightest clue. There is a complete lack of mutual respect and this is something I WILL NOT screw up with my kids if I ever have any.
It's definitely a good idea to build some financial sense from young age, helping kids figure out how budgeting works, where the money gets spent, how it all works, etc. It also works if they are able to learn why someone pays you that money in the first place - how a business makes profit because of your work, which justifies the salary (or some other value gained if it's a non-profit organisation). Finally it also makes sense to let them understand money as a means of exchanging value, rather than some magical paper that just helps buy stuff.
The earlier they learn about stuff like interest rates, debt, investments, etc. the better prepared they are to take on their life.
However, just telling kids that "hey kids, I make $xxxx" and doing nothing after that is never a great idea!
The counter-examples seemed plastic. Who doesn't tell their kids "because it costs too much money" when they ask for some stupid toy they are going to play with for 5 minutes and then forget. I explain the cost of things all the time to my kids, it would never occur to me to dodge the subject.
Growing up I remember very well that I always felt my parents had a near unlimited budget but that they just didn't buy everything because they wanted me to learn that that was somehow bad. It real took until somewhere in my mid teens to understand that this was not the case.
My father never shared his salary. Taking all this cash home sounds like a lot of fun! OR perhaps you could just sit your kid down and make Python/matplotlib script that shows some pi/bar charts where you add categories... Get the kid excited about programming too ;)
If everyone truly understood just how much less the 'rich' people they know earned than any of the 700,000 or so folks in the global elite, would we still be having the same sort of disdain for progressive taxation?
I don't think this is true for everyone. Children could write off a lack of stuff to any reason other than "budgets have become tighter", or give it no thought at all, or be proud that they are not spoiled. Also, "I never thought we were poor" stories are not uncommon. I don't know if that's a better way to go, but at least it's sometimes possible.
It's easy, if you don't have kids, to theorize on how you should instruct and mentor your would-be offspring, but few plans survive first contact with the real world.
That might actually have an adverse effect. Kids doing worse at school for whatever reason, get a huge guilt complex because their parents pay a lot of money for them to be there. Reminds me of the "disappointed Asian parents" meme / stereotype.
Being is important, not having.
I actually had this conversation with my wife the other day. We decided we would raise our child to be aware of just how much things cost and teach him from a young age to be successful in life and get the things you want, you have to work for them and that nothing is ever handed to you.
This is why I think it is important to instil good values into your children from a young age and teach them the importance of money, how it is earned and where it is spent. When they're old enough to do things for themselves, encourage them to earn money through chores but also ensure they do some chores for free. Maybe give them a few dollars for mowing the lawn, but make them do the washing up and clean their room for free.
When I was about 10, my father who is a small engine mechanic gave me a full can of fuel, a whipper snipper and a mower. He then suggested I go door-to-door and ask people in the street if they would like their lawn mowed for $15 (for a small yard). When the fuel ran out, I had to use my own earned money to buy more fuel, oil (for two stroke mixture) and whipper snipper cord. I remember one stage I had like $40, but I spent half of that on fuel, oil and cord.
Because of that experience my father taught me, I believe it actually made me grow up to be more conscious of money and taught me the basics of running a business and managing money. I have very little personal debt, I earn an okay salary and have some savings. Sadly, we're seeing the current generation getting into massive amounts of debt thanks to credit cards, expensive electronic items and even in-app purchases on our cellular phones.
I learned to be more budget conscious when I go shopping with my wife because I grew up going to the store with my mother who knew to go at a certain time of day to get discounted; fruit, meat and vegetables. The importance of buying in bulk, the importance of knowing what you want to buy by writing a shopping list before you even set foot in the store.
When I was growing up, money was a taboo subject that my parents didn't like discussing in-front of me and my siblings. I would see my parents sometimes argue about money, not very often, but I didn't really know first-hand some of the stresses until I got older and paid more attention. I wish my parents involved me and my sisters in the budgeting process so we could all be a little more grateful for what we had and the sacrifices my parents had to make raising us.
Honestly, I think the whole money subject should be taught in school. I know some schools do to an extent, but children need to be taught the honest basics and realities of everyday life financial responsibilities as an adult and the consequences of things like debt.