Tell the Whole Story

There’s a consensus that financial education should begin at home. But the way many parents cover the topic at the kitchen table needs a serious upgrade. Even now, parents talk more about sex with their children than they do about money.

In a 2014 study of 136 children aged 8 to 17, researchers found that while children reported their parents shared information on general topics like saving, spending and earning, children said their parents tended to stay quiet on sensitive topics like the family’s specific income and family debt. Often, parents fear causing their children anxiety or think talking about money is impolite. The problem is, keeping these secrets often caused more anxiety than telling the truth.

Children with wealthy parents, for instance, sometimes assumed their parents didn’t talk about how much money they made because they were poor—but the real reason was that the parents didn’t want the children to brag.

And the negative effects of that childhood anxiety can last into adulthood.  found that subjects who report limited communication with their parents about money later in life feel “clueless,” as if they don’t truly understand how credit cards or money management works.

Instead of concealing sensitive topics, you need to use financial discussions, no matter how sensitive, as “teachable moments.”

Trips to the store are good moments to have these conversations. Parents might explain why buying one item makes more sense from an economic perspective than another, comparing quality, price, benefits and the family’s general budget.