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Why You Should Tell Your Children How Much You Make

175 points by mikek 12y ago

sheensleeves 12y ago
It's inescapable if they go to college. That's the only way I would have found out. There's a line on the FAFSA form.
- genericuser 12y ago
  My parents simply told me they had too much in savings for me to get financial aid so filling out the FAFSA was a waste of time. But the entire time I was growing up they acted like we weren't in the best financial shape and couldn't afford name brand cereal and stuff so I learned to be thrifty through a false sense of being worse off than we actually were. 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.
  - mapt 12y ago
    My parents did something similar. 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.
  - MadManE 12y ago
    I don't know that the threshold for FAFSA being useless is really that high.
    - rhino369 12y ago
      For Pell Grants isn't not that high, but you still have to fill one out if you want federal student loans which have no limit at all.
  - zeroonetwothree 12y ago
    FAFSA was required to get merit-based scholarships from my college, so I filled it out even though my parents made too much to get any need-based aid. I did get some money that way even.
- bostonvaulter2 12y ago
  Yes, and that is mentioned in the article: > 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.
- gk1 12y ago
  Opposite of others' stories, my mother always put a very low number on the FAFSA form. It always annoyed me because I thought she was lying just so I can get more financial aid, and I'd argue about it because it felt like fraud. 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.)
- fnordfnordfnord 12y ago
  >It's inescapable if they go to college. 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.
  - hga 12y ago
    Indeed, it's a particularly powerful tool if your parents don't want you to graduate from college. My sister was the only one to escape this trap due to attending a very inexpensive state school (they even rent the textbooks) just to get a generic business degree, being able to live with our grandmother, and having acquired skills that earned her above average wages.
nsxwolf 12y ago
"he decided to do something that many parents would consider radical: show them exactly what he earned." 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?
- emodendroket 12y ago
  It's radical among the kind of parents who make 10 grand a month (which happens to be the same set that these NYT culture articles are always about).
  - smeyer 12y ago
    Do you have data for this? I don't, but anecdotally, I grew up with parents with around this income who openly discussed wages. While they might be outliers (both economists), many of my friends who grew up with similar family incomes have also mentioned their families discussing salary.
    - saryant 12y ago
      That's how my parents were. When I was 18 or so my father walked me through his income and all his retirement accounts, wills, life insurance policies, etc. He wanted me to understand at least the basics of his finances in case anything happened to himself and my mother. I knew where all the paperwork was kept in the house and had access to the safety deposit box where he kept copies.
    - deleted 12y ago
      [deleted]
    - emodendroket 12y ago
      I have my own anecdotes, but no, I don't have data.
- wldcordeiro 12y ago
  I grew up in the same situation. My mom always let me know and gave me a lot of details on the status of our family. In fact once I got older she started having me manage a lot of her online accounts and such because she had trouble with it. Now she's got my younger siblings doing it.
taeric 12y ago
The day when folks are in no way defined by their income can not come quickly enough. It saddens me to know that it will likely not be near my lifetime.
- tenementfunster 12y ago
  :'(
- emodendroket 12y ago
  Money is essentially a measure of your influence/ability to make people do things, so it's not surprising it's tied up with status.
  - runamok 12y ago
    I suppose that is true. However, I see money as giving me the ability to not have to do what others want me to do (within legal bounds of course).
    - 1123581321 12y ago
      It's the same thing - your immunity to that power is your status.
      - Dylan16807 12y ago
        No, it's not the same thing. Your influence on others is proportional to money and unbounded. Your immunity to others approaches 100% and stops. There's very little to brag or be guilty about, and we can share a goal of getting everyone close to that 100%.
      - runamok 12y ago
        I disagree. Using a probably hyperbolic metaphor: I don't want to be a slave but neither do I wish to be anybody else's master.
        12y ago
pjungwir 12y ago
I was surprised to read so much concern about children learning what their parents make or what their home is worth, as well as concern they might share that with outsiders. I have three kids, aged 1, 3, and 5, and I don't worry about that. Maybe it's because I'm a freelancer so I think about income more often than someone with a stable paycheck. Do other people fear those things? 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." :-)
- Spooky23 12y ago
  There's slot of weird psychology at play here. Many people harbor guilt or are otherwise insecure about money.
- xrange 12y ago
  Hard not to notice that you didn't include your income in that post. Also it isn't so hard to understand income confidentiality. Some people have spendthrift relatives and acquaintances always on the lookout for loans. Some people will treat you different if they know how much you make. Envy is a thing, along with jealously.
deleted 12y ago
[deleted]
sdrothrock 12y ago
I agree that parents should tell their kids how much they make. Even better, bring them in on the budgeting process, explain how much of their paycheck goes to taxes, etc. 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.
- adnrw 12y ago
  My parents were incredibly insistent that my sister and I understand how they did their personal and business finances and it's among the best things they taught us (neck-and-neck with how to cook). 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.
- untog 12y ago
  This is all very well when finances are good. But a friend of mine grew up poor, and their mother held back nothing in telling them exactly how broke the family was. To this day they are extremely jittery about all things financial - I think there is such a thing as too young to be worrying about money. But when you're a young adult, absolutely.
jtwebman 12y ago
When I was 16 my dad made me balance the check book and pay all the bills for a year. It is why I feel I am successful now. He also taught me to ask how can I expand my means to afford something vs cutting. A great idea for sure!
lolheheh 12y ago
You forgot that HN readers are cool bros who travel the world and code from cafes in Thailand while writing books about now to be cool. They don't have kids.
- spacemanmatt 12y ago
  You can generally sort out the parental from the non-parental voices by content, too. Amateur data science!
- spacemanmatt 12y ago
  I'm probably risking my karma to respond in agreement with an already downvoted post but whatevs. You're mostly spot-on about the demographic even if also something of a prick about it. ;)
carlob 12y ago
> Some parents start with even larger line items. Trisha Jones, a stay-at-home mother in Norfolk, Va., sends her children, who are 6 and 8, to private school. Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,” she said, adding that they know that the daily number is akin to a nice Lego set. “But it’s a privilege to go to the school that they do, and we want them to know that we are making sacrifices to send them there.” 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.
- vezzy-fnord 12y ago
  Why is it that you immediately associate avoiding public school with identity politics? 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.
  - spacecowboy_lon 12y ago
    Look at the UK where 90% of the establishment went to public school - liek wise for Harvard in the USA
    - carlob 12y ago
      Public school in the UK is private school in the US.
carlob 12y ago
> Some parents start with even larger line items. Trisha Jones, a stay-at-home mother in Norfolk, Va., sends her children, who are 6 and 8, to private school. Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,” she said, adding that they know that the daily number is akin to a nice Lego set. “But it’s a privilege to go to the school that they do, and we want them to know that we are making sacrifices to send them there.” This really made me cringe. 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.
ProAm 12y ago
I sort of feel like is a middle class/upper class problem or lesson to be learned. When you grow up poor none of this is really a mystery. You understand very early on the value of a penny, where it goes, and why it's spent. Still a valuable lesson.
- Swizec 12y ago
  I remember learning that you can't rely on listed price for grocery items, but must check the per kilogram or per liter price. Because bigger containers are usually cheaper. But not always. 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.
  - Lawtonfogle 12y ago
    You also have to factor risk of spoilage. 2 units of milk is cheaper than 1 unit. But what is the risk of .5 units being thrown out since you normally don't use 2 units within the time it takes to spoil. You could increase consumption to not throw it out, but then you need to balance that out or all you did is increase the amount you spend on groceries and the calories you consume while attempting to actually reduce the money spent on groceries. 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.
- poor_too_ 12y ago
  Sort of. I grew up in a working poor household and while I learned the value of money, simple things like budgeting and how much debt is too much debt I had to teach myself.
- toyg 12y ago
  But do "you" really understand? 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.
deleted 12y ago
[deleted]
twiss 12y ago
> [E]ven the youngest generally understand when budgets have become tighter and want to know why. 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.
MichaelGG 12y ago
Budgeting with older kids, as part of teaching about general responsibility, is probably a great idea. I'm also bewildered why anyone would hide their finances from their kids. Neat idea to dump it out in cash and divide it out, as an easier way to visualize. 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.
jakejake 12y ago
My parents completely hid all finances from me and my sister growing up. My mother in particular would be horrified to think that their kids were stressing out over mortgage and utility bills. They didn't have to sit down and show us their pay-stubs for us to know roughly what types of things we could afford though. Perhaps if my parents had been really wealthy and could afford anything, then I would have grown up with no concept of money. But, as it were, I had a small allowance that I could spend as I pleased and I knew pretty well what price range we could afford for birthdays and such. 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.
DigitalSea 12y ago
I wholeheartedly agree. Our consumer-led marketing manipulated society casts a massive shadow over the reality of just how much things cost and no sum of money is too big. When you're a child or teenager, you don't have the pressures of life on your shoulders, you don't realise just how hard things can be. You have no bills, little to no responsibilities and everything is so much easier. 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.
bhousel 12y ago
I kind of don't want them telling the other children in school how much I make.
- peteretep 12y ago
  Eh, my Dad told me it was important not to tell other kids because it would hurt their feelings, so I didn't. I'm pretty sure none of them would have cared, either. Have more faith in your kids.
stegosaurus 12y ago
I personally figured most of this out whilst growing up by just, well, looking at what we had, where we lived, occupations, etc. All the data is there... I saw a world dominated by fun coupons, researching it was just a given, like asking 'why is the sky blue?'. 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.
theVirginian 12y ago
I grew up with no idea how much my parents made and they often sent very conflicting messages about how much they had or how much we were able to spend, giving me money freely one minute and then screaming at me for being selfish about money the next. I never did have a clear picture and probably never will, after a while I didn't care. If I got something I got it, if I didn't then I didn't. Instead of money being used as something I could earn respect with or be trusted with, they used it to control me and get me to do things whenever they wanted. 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.
titanomachy 12y ago
> Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,” 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.
- peteretep 12y ago
  > don't lord it over them and make their education a > source of guilt to keep them in check Why not?
  - emodendroket 12y ago
    It probably wasn't their choice not to go to a public school (and if it was, come on, they shouldn't have the ability to make that choice all by themselves).
jareds 12y ago
I knew what my parents made as long as I can remember. THey also explained there health care and retirement situation to me at a young age. This helped me realize that since they are teachers and were grandfathered into the systems before benefits started getting massively cut that I needed to take into account more then just my salary. While my starting salary was much higher then theirs with inflation taken into account I also realized that I had t start saving as soon as I got a job. I am lucky that I enjoy programming and it allows me to live comfortably. While if money were no issue I may have gone into history talking with them about finances made me realize that I should find a happy medium with something I both enjoy and will allow me to be comfortable.
ChuckMcM 12y ago
We got our daughters checking accounts when they were 8. (actually USAA savings accounts that you could write 3 checks a month on) and we set up some auto-deposits for their allowance. 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?"
programminggeek 12y ago
Information has value and power when it is scarce and loses value when shared. Honestly, I think more people should be open about how much they make, how much profit margins their businesses have, etc. because transparency in the long run deflects a lot of questions and problems. 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.
Too 12y ago
Revealing the salary is one thing but i think revealing the monthly expenses is even more important for kids to realize how much money actually just "disappears", into recurring bills like rent, for one to live a comfortable life. 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.
teekert 12y ago
There are some good tips in this piece I am definitely going to apply. 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 ;)
holri 12y ago
You should tell your children how much you can do and what you know. Being is important, not having.
- spacemanmatt 12y ago
  Education is also important. We have created economies so that we can conduct business and allowing children to remain ignorant of these things is a direct harm.
j_lev 12y ago
One of the benefits of growing up Jewish is that business talk at the dinner table each evening drowns out even the TV. Of course, you learn pretty quick that not all families are like this. 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-hide-their-money/ http://www.joshuakennon.com/stealth-wealth-why-americas-rich...
- yitchelle 12y ago
  My family, from a Chinese heritage, has a similar thing. We talk about business, our salary, our financial plans etc within ourselves, but silence outside the family. I heard similar stories from other families. I always wonder how pervasive that is in other cultures.
  - foobar2020 12y ago
    I actually envy you guys. I come from an European Christian family, and it was only my father that occasionally engaged in discussions regarding wealth, earnings, business. It was not a popular thing to do where I grew up. Although I firmly believe this is the right thing to do, properly executed it brings family together and gives support to everyone's plans.
- zaroth 12y ago
  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. Laughed so hard reading that. Keep a secret from everyone, except the IRS of course. I absolutely get the concept of information asymmetry between you and yours friends and community. I don't get the part about keeping it from your children though.
wisevehicle 12y ago
I felt like this article actually begs a bigger question, why don't we tell each other how much we make? I get the sense that because we keep this so extremely private, it makes it so much easier for the class division between the wealthy, the 'middle class', and the poor to continue to grow. 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?
- nroets 12y ago
  Because it leads to discontent: www.youtube.com/watch?v=meiU6TxysCg
shenoyroopesh 12y ago
I think the title could have been rephrased. 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!
Cthulhu_ 12y ago
> “We jokingly say that it costs $92.50 to send them each to school every day,” 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.
zaroth 12y ago
Some parts of this article struck me as bizarre, like the "Why do you ask?" part. And the parenthetical "this also works well for questions about sex and drugs" was even worse! I guess in some cases it's useful or important to ask "Why do you ask?" but using that line every single time? I think that would get old very fast. 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.
sfjailbird 12y ago
I don't tell my kid how much I make because they use it to compare with the other kids' parents. It is uncomfortable and embarrassing to overhear them bragging among themselves that their dad earns more than that ones. 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.
spacemanmatt 12y ago
I love seeing this. I run a full-disclosure household. We talk about money (savings, income, assets for now; they're young) and careers and aspirations often. Justice themes bubble up naturally out of this. As a parent, I can only recommend bringing your kids into the conversation.
informatimago 12y ago
Since there's some discussion in this thead about inequality of revenue between generations, I would mention here Stéphane Laborde's "Théorie Relative de la Monnaie" http://trm.creationmonetaire.info/ http://trm.creationmonetaire.info/ or "Currency Relative Theory" https://github.com/informatimago/LatexTRM/blob/master/LateXTRM-en.pdf https://github.com/informatimago/LatexTRM/blob/master/LateXT... 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).
kapad 12y ago
I had parents that shared quite a bit about money with me. 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 :) )

175 points by mikek 12y ago

sheensleeves 12y ago

It's inescapable if they go to college. That's the only way I would have found out. There's a line on the FAFSA form.

genericuser 12y ago
My parents simply told me they had too much in savings for me to get financial aid so filling out the FAFSA was a waste of time. But the entire time I was growing up they acted like we weren't in the best financial shape and couldn't afford name brand cereal and stuff so I learned to be thrifty through a false sense of being worse off than we actually were. 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.
- mapt 12y ago
  My parents did something similar. 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.
- MadManE 12y ago
  I don't know that the threshold for FAFSA being useless is really that high.
  - rhino369 12y ago
    For Pell Grants isn't not that high, but you still have to fill one out if you want federal student loans which have no limit at all.
- zeroonetwothree 12y ago
  FAFSA was required to get merit-based scholarships from my college, so I filled it out even though my parents made too much to get any need-based aid. I did get some money that way even.
bostonvaulter2 12y ago
Yes, and that is mentioned in the article: > 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.
gk1 12y ago
Opposite of others' stories, my mother always put a very low number on the FAFSA form. It always annoyed me because I thought she was lying just so I can get more financial aid, and I'd argue about it because it felt like fraud. 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.)
fnordfnordfnord 12y ago
>It's inescapable if they go to college. 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.
- hga 12y ago
  Indeed, it's a particularly powerful tool if your parents don't want you to graduate from college. My sister was the only one to escape this trap due to attending a very inexpensive state school (they even rent the textbooks) just to get a generic business degree, being able to live with our grandmother, and having acquired skills that earned her above average wages.

nsxwolf 12y ago

"he decided to do something that many parents would consider radical: show them exactly what he earned." 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?

emodendroket 12y ago
It's radical among the kind of parents who make 10 grand a month (which happens to be the same set that these NYT culture articles are always about).
- smeyer 12y ago
  Do you have data for this? I don't, but anecdotally, I grew up with parents with around this income who openly discussed wages. While they might be outliers (both economists), many of my friends who grew up with similar family incomes have also mentioned their families discussing salary.
  - saryant 12y ago
    That's how my parents were. When I was 18 or so my father walked me through his income and all his retirement accounts, wills, life insurance policies, etc. He wanted me to understand at least the basics of his finances in case anything happened to himself and my mother. I knew where all the paperwork was kept in the house and had access to the safety deposit box where he kept copies.
  - deleted 12y ago
    [deleted]
  - emodendroket 12y ago
    I have my own anecdotes, but no, I don't have data.
wldcordeiro 12y ago
I grew up in the same situation. My mom always let me know and gave me a lot of details on the status of our family. In fact once I got older she started having me manage a lot of her online accounts and such because she had trouble with it. Now she's got my younger siblings doing it.

taeric 12y ago

The day when folks are in no way defined by their income can not come quickly enough. It saddens me to know that it will likely not be near my lifetime.

tenementfunster 12y ago
:'(
emodendroket 12y ago
Money is essentially a measure of your influence/ability to make people do things, so it's not surprising it's tied up with status.
- runamok 12y ago
  I suppose that is true. However, I see money as giving me the ability to not have to do what others want me to do (within legal bounds of course).
  - 1123581321 12y ago
    It's the same thing - your immunity to that power is your status.
    - Dylan16807 12y ago
      No, it's not the same thing. Your influence on others is proportional to money and unbounded. Your immunity to others approaches 100% and stops. There's very little to brag or be guilty about, and we can share a goal of getting everyone close to that 100%.
    - runamok 12y ago
      I disagree. Using a probably hyperbolic metaphor: I don't want to be a slave but neither do I wish to be anybody else's master.
      - 12y ago

pjungwir 12y ago

I was surprised to read so much concern about children learning what their parents make or what their home is worth, as well as concern they might share that with outsiders. I have three kids, aged 1, 3, and 5, and I don't worry about that. Maybe it's because I'm a freelancer so I think about income more often than someone with a stable paycheck. Do other people fear those things? 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." :-)

Spooky23 12y ago
There's slot of weird psychology at play here. Many people harbor guilt or are otherwise insecure about money.
xrange 12y ago
Hard not to notice that you didn't include your income in that post. Also it isn't so hard to understand income confidentiality. Some people have spendthrift relatives and acquaintances always on the lookout for loans. Some people will treat you different if they know how much you make. Envy is a thing, along with jealously.

deleted 12y ago

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sdrothrock 12y ago

I agree that parents should tell their kids how much they make. Even better, bring them in on the budgeting process, explain how much of their paycheck goes to taxes, etc. 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.

adnrw 12y ago
My parents were incredibly insistent that my sister and I understand how they did their personal and business finances and it's among the best things they taught us (neck-and-neck with how to cook). 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.
untog 12y ago
This is all very well when finances are good. But a friend of mine grew up poor, and their mother held back nothing in telling them exactly how broke the family was. To this day they are extremely jittery about all things financial - I think there is such a thing as too young to be worrying about money. But when you're a young adult, absolutely.

jtwebman 12y ago

When I was 16 my dad made me balance the check book and pay all the bills for a year. It is why I feel I am successful now. He also taught me to ask how can I expand my means to afford something vs cutting. A great idea for sure!

lolheheh 12y ago

You forgot that HN readers are cool bros who travel the world and code from cafes in Thailand while writing books about now to be cool. They don't have kids.

spacemanmatt 12y ago
You can generally sort out the parental from the non-parental voices by content, too. Amateur data science!
spacemanmatt 12y ago
I'm probably risking my karma to respond in agreement with an already downvoted post but whatevs. You're mostly spot-on about the demographic even if also something of a prick about it. ;)

carlob 12y ago

> Some parents start with even larger line items. Trisha Jones, a stay-at-home mother in Norfolk, Va., sends her children, who are 6 and 8, to private school. Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,” she said, adding that they know that the daily number is akin to a nice Lego set. “But it’s a privilege to go to the school that they do, and we want them to know that we are making sacrifices to send them there.” 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.

vezzy-fnord 12y ago
Why is it that you immediately associate avoiding public school with identity politics? 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.
- spacecowboy_lon 12y ago
  Look at the UK where 90% of the establishment went to public school - liek wise for Harvard in the USA
  - carlob 12y ago
    Public school in the UK is private school in the US.

carlob 12y ago

> Some parents start with even larger line items. Trisha Jones, a stay-at-home mother in Norfolk, Va., sends her children, who are 6 and 8, to private school. Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,” she said, adding that they know that the daily number is akin to a nice Lego set. “But it’s a privilege to go to the school that they do, and we want them to know that we are making sacrifices to send them there.” This really made me cringe. 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.

ProAm 12y ago

I sort of feel like is a middle class/upper class problem or lesson to be learned. When you grow up poor none of this is really a mystery. You understand very early on the value of a penny, where it goes, and why it's spent. Still a valuable lesson.

Swizec 12y ago
I remember learning that you can't rely on listed price for grocery items, but must check the per kilogram or per liter price. Because bigger containers are usually cheaper. But not always. 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.
- Lawtonfogle 12y ago
  You also have to factor risk of spoilage. 2 units of milk is cheaper than 1 unit. But what is the risk of .5 units being thrown out since you normally don't use 2 units within the time it takes to spoil. You could increase consumption to not throw it out, but then you need to balance that out or all you did is increase the amount you spend on groceries and the calories you consume while attempting to actually reduce the money spent on groceries. 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.
poor_too_ 12y ago
Sort of. I grew up in a working poor household and while I learned the value of money, simple things like budgeting and how much debt is too much debt I had to teach myself.
toyg 12y ago
But do "you" really understand? 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.

deleted 12y ago

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twiss 12y ago

> [E]ven the youngest generally understand when budgets have become tighter and want to know why. 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.

MichaelGG 12y ago

Budgeting with older kids, as part of teaching about general responsibility, is probably a great idea. I'm also bewildered why anyone would hide their finances from their kids. Neat idea to dump it out in cash and divide it out, as an easier way to visualize. 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.

jakejake 12y ago

My parents completely hid all finances from me and my sister growing up. My mother in particular would be horrified to think that their kids were stressing out over mortgage and utility bills. They didn't have to sit down and show us their pay-stubs for us to know roughly what types of things we could afford though. Perhaps if my parents had been really wealthy and could afford anything, then I would have grown up with no concept of money. But, as it were, I had a small allowance that I could spend as I pleased and I knew pretty well what price range we could afford for birthdays and such. 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.

DigitalSea 12y ago

I wholeheartedly agree. Our consumer-led marketing manipulated society casts a massive shadow over the reality of just how much things cost and no sum of money is too big. When you're a child or teenager, you don't have the pressures of life on your shoulders, you don't realise just how hard things can be. You have no bills, little to no responsibilities and everything is so much easier. 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.

bhousel 12y ago

I kind of don't want them telling the other children in school how much I make.

peteretep 12y ago
Eh, my Dad told me it was important not to tell other kids because it would hurt their feelings, so I didn't. I'm pretty sure none of them would have cared, either. Have more faith in your kids.

stegosaurus 12y ago

I personally figured most of this out whilst growing up by just, well, looking at what we had, where we lived, occupations, etc. All the data is there... I saw a world dominated by fun coupons, researching it was just a given, like asking 'why is the sky blue?'. 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.

theVirginian 12y ago

I grew up with no idea how much my parents made and they often sent very conflicting messages about how much they had or how much we were able to spend, giving me money freely one minute and then screaming at me for being selfish about money the next. I never did have a clear picture and probably never will, after a while I didn't care. If I got something I got it, if I didn't then I didn't. Instead of money being used as something I could earn respect with or be trusted with, they used it to control me and get me to do things whenever they wanted. 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.

titanomachy 12y ago

> Each month, she has them sit with her while she pays the tuition online, asking them to click the button. “We jokingly say that it costs $92.50 to send them each to school every day,” 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.

peteretep 12y ago
> don't lord it over them and make their education a > source of guilt to keep them in check Why not?
- emodendroket 12y ago
  It probably wasn't their choice not to go to a public school (and if it was, come on, they shouldn't have the ability to make that choice all by themselves).

jareds 12y ago

I knew what my parents made as long as I can remember. THey also explained there health care and retirement situation to me at a young age. This helped me realize that since they are teachers and were grandfathered into the systems before benefits started getting massively cut that I needed to take into account more then just my salary. While my starting salary was much higher then theirs with inflation taken into account I also realized that I had t start saving as soon as I got a job. I am lucky that I enjoy programming and it allows me to live comfortably. While if money were no issue I may have gone into history talking with them about finances made me realize that I should find a happy medium with something I both enjoy and will allow me to be comfortable.

ChuckMcM 12y ago

We got our daughters checking accounts when they were 8. (actually USAA savings accounts that you could write 3 checks a month on) and we set up some auto-deposits for their allowance. 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?"

programminggeek 12y ago

Information has value and power when it is scarce and loses value when shared. Honestly, I think more people should be open about how much they make, how much profit margins their businesses have, etc. because transparency in the long run deflects a lot of questions and problems. 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.

Too 12y ago

Revealing the salary is one thing but i think revealing the monthly expenses is even more important for kids to realize how much money actually just "disappears", into recurring bills like rent, for one to live a comfortable life. 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.

teekert 12y ago

There are some good tips in this piece I am definitely going to apply. 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 ;)

holri 12y ago

You should tell your children how much you can do and what you know. Being is important, not having.

spacemanmatt 12y ago
Education is also important. We have created economies so that we can conduct business and allowing children to remain ignorant of these things is a direct harm.

j_lev 12y ago

One of the benefits of growing up Jewish is that business talk at the dinner table each evening drowns out even the TV. Of course, you learn pretty quick that not all families are like this. 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-hide-their-money/ http://www.joshuakennon.com/stealth-wealth-why-americas-rich...

yitchelle 12y ago
My family, from a Chinese heritage, has a similar thing. We talk about business, our salary, our financial plans etc within ourselves, but silence outside the family. I heard similar stories from other families. I always wonder how pervasive that is in other cultures.
- foobar2020 12y ago
  I actually envy you guys. I come from an European Christian family, and it was only my father that occasionally engaged in discussions regarding wealth, earnings, business. It was not a popular thing to do where I grew up. Although I firmly believe this is the right thing to do, properly executed it brings family together and gives support to everyone's plans.
zaroth 12y ago
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. Laughed so hard reading that. Keep a secret from everyone, except the IRS of course. I absolutely get the concept of information asymmetry between you and yours friends and community. I don't get the part about keeping it from your children though.

wisevehicle 12y ago

I felt like this article actually begs a bigger question, why don't we tell each other how much we make? I get the sense that because we keep this so extremely private, it makes it so much easier for the class division between the wealthy, the 'middle class', and the poor to continue to grow. 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?

nroets 12y ago
Because it leads to discontent: www.youtube.com/watch?v=meiU6TxysCg

shenoyroopesh 12y ago

I think the title could have been rephrased. 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!

Cthulhu_ 12y ago

> “We jokingly say that it costs $92.50 to send them each to school every day,” 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.

zaroth 12y ago

Some parts of this article struck me as bizarre, like the "Why do you ask?" part. And the parenthetical "this also works well for questions about sex and drugs" was even worse! I guess in some cases it's useful or important to ask "Why do you ask?" but using that line every single time? I think that would get old very fast. 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.

sfjailbird 12y ago

I don't tell my kid how much I make because they use it to compare with the other kids' parents. It is uncomfortable and embarrassing to overhear them bragging among themselves that their dad earns more than that ones. 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.

spacemanmatt 12y ago

I love seeing this. I run a full-disclosure household. We talk about money (savings, income, assets for now; they're young) and careers and aspirations often. Justice themes bubble up naturally out of this. As a parent, I can only recommend bringing your kids into the conversation.

informatimago 12y ago

Since there's some discussion in this thead about inequality of revenue between generations, I would mention here Stéphane Laborde's "Théorie Relative de la Monnaie" http://trm.creationmonetaire.info/ http://trm.creationmonetaire.info/ or "Currency Relative Theory" https://github.com/informatimago/LatexTRM/blob/master/LateXTRM-en.pdf https://github.com/informatimago/LatexTRM/blob/master/LateXT... 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).

kapad 12y ago

I had parents that shared quite a bit about money with me. 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 :) )