Why You Should Tell Your Children How Much You Make

Your Money
Why You Should Tell Your Children How Much You Make

JAN. 29, 2015

Scott Parker once withdrew his entire month’s salary in $1 bills in an effort to show his family the value of money. Credit Jim McAuley for The New York Times

Your Money

By RON LIEBER

When Scott Parker wanted his six offspring to know more about the value of money, he decided to do something that many parents would consider radical: show them exactly what he earned.

One day, he stopped by his local Wells Fargo branch in Encinitas, Calif., and asked to withdraw his entire monthly salary in cash. In singles. It took 24 hours for the tellers to round up that many bills, so he returned the next day and took away the $100 stacks in a canvas bag.

His oldest son, Daniel, who was 15 at the time, remembers the moment his father walked into the house and dumped the $10,000 or so on a table. “It looked like he had robbed a bank,” he said.

After a pause to let it all sink in, Mr. Parker began peeling off bills. He told them about taxes, set aside money for a tithe to their church and made a big pile for the house payment. The singles piled up for soccer and scouting and hamburger night. By the end, there wasn’t much left over. “I was trying to make as big of an impact as I could, and I definitely had their attention,” he said recently.

Your children deserve to know what you make, too. It may sound improbable, but you can begin to initiate them when they’re as young as 5 or 6, building their knowledge slowly and giving them the real answer while they’re still teenagers. Handle it right, and it will be one of the most valuable lessons of their childhood.

Here’s the bigger problem this helps to solve: Money is a source of mystery to children. They sense its power, so they ask questions, lots of them, over many years. Why isn’t our house as big as my cousin’s? Why can’t I have a carnivorous plant terrarium? Why should I respect my teachers if they earn only $60,000 per year? (Real question!) Are we poor? Why didn’t you give money to the man who asked you for some? If my sister can have Hello-Kitty-themed Beats by Dre headphones, why won’t you get me the Bluetooth-enabled Lego Mindstorms set? (It’s only $349, and it’s educational, Mom!)
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How Do You Talk to Your Kids About Money?

On Monday at noon Eastern, columnist Ron Lieber will answer questions about how families can talk about finances on The Times’s Facebook page.

We adults, however, tend to do a miserable job of answering. We push our children’s money questions aside, sometimes telling them that their queries are impolite, or perhaps worrying that they will call out our own financial hypocrisy and errors. Sometimes we respond defensively and viscerally, barking back, “None of your business,” unintentionally teaching our children that the topic is off limits despite its obvious importance. Others want to protect their children from a topic many of us find stressful or baffling: Can’t we keep them innocent of all of this money stuff for just a little bit longer?

But shielding children from the realities of everyday financial life makes little sense anymore, given the responsibilities their generation will face, starting with the outsize college tuitions they will encounter while still in high school. “It’s dangerous, like not telling them about how their bodies are going to change during puberty,” said Amanda Rose Adams, a mother of two in Fort Collins, Colo. “That’s how kids come out of college $100,000 in debt with an English degree.” Or not knowing how and why to start saving right away for retirement, or how to pick a health insurance plan.