Since I just shared about shopping and budgeting with my kids, and about using DoughMain to help teach your kids about finances, I thought I would answer one reader’s question about discussing major financial decisions with our kids. I hope you’ll share your thoughts on this matter too!
Tracy asked this question after I posted about a big financial decision my husband and I had made recently:
I had a question regarding the big decision you and Matt recently made regarding not purchasing a local property. Did you share the details of your decision or the decision making process with your boys? Just asking because I wonder how much is enough or too much for kids to know about, especially regarding financial decisions. I ask because I am not at that point yet, but I will be someday.
Our boys are now 14, 11, 9 and 6. While I would say that the majority of this particular decision-making discussion took place between just Matt and me, we did share a good part of the conversation with our boys. We felt that it was important that they know what we might be taking on if we did buy that building. Purchasing this commercial property would have effected our lives dramatically. Since our boys are old enough to understand much of what this purchase would mean, it could have been a big blow to them if we’d just worked on it after they were in bed, and then suddenly announced that we’d purchased a building. In addition, we were even encouraging Asa, our oldest, to be an “investor” with us in this since he’s done a good job of earning and saving. Matt talked through that process with him in detail.
In the end, Matt and I made the decision on our own – well, with God’s help, but without our boys help – not to purchase this building. After the decision was made, we then discussed with our boys the reasons for our choice. We felt that it was very important that they understood why we chose not to make this investment and how we came to these conclusions. They needed to hear about our thought process, and even some of the dollar figures so that they could have a clearer picture of how we had arrived at our decision. Our six year old became much more interested in his Legos about five minutes into the discussion, but we kept talking to our older boys until they had no more questions.
I’d love to hear how you handle decision-making in your family, financial or otherwise.
How much is too much (or too little) to share with your kids when making a major family decision?
Funny I just got done talking to my 6 year old about “store brand” vs “name brand”. She finally realized the store brand cereal is the same as many name brand! LOL
My girls are 14 and 17 now, but we’ve always talked to them about money. I think the thing that helped the most was allowance. From the time they were three they had to make their own financial decisions, and that helped them to understand why we didn’t buy everything we wanted. Then at 13 they got a clothing allowance, so that they learned about saving.
We also tithe on our income throughout the year, but at the end of December we give our charitable “gifts” on top of that. We’ve always done that as a family–looked at the bank balance and decided how much to give, and then pulled out all of the charity fundraising letters we’ve had and prayed over who to give it to. It’s really important to me that the girls understand how blessed we are to be able to give!
Thanks for addressing this Laura! :) I’ll be interested in also hearing what others have to say about it. I am fascinated that you brought Asa to a place of potential participation in it. Certainly an incredible learning lesson he would not get in a traditional education. :)
It’s all about age appropriate. My 3-year-old could care less about and not understand the details, my 16-year-old can learn a lot from the details. Mostly, if it’s a decision that they have no say in, we will sometimes let them know of a “possibility” and answer questions and then let them know our decision after my husband and I have made it and answer questions. If it’s more of a family decision, it has more discussions with us parents asking the children specific questions to get more input from them and directly involving them in the decision making.
As some of our children are getting older, explaining the details and the reasoning behind the way we make our decisions is a WONDERFUL learning tool. It’s a great opportunity to ask them questions to make them “think.” (What if you spent x on y-business versus doing z. What’s the better deal? What are the risks involved? What else is involved? Which is better for a particular situation, would one be better for another situation?) Our 16-year-old has a much better understanding of how business and how the world works monetarily than most of his classmates. I can definitely see him as an entrepreneur.
My children are only 4, 2, and 7 weeks, but we are talking to them about finances from the very beginning. My parents didn’t talk to me at ALL about finances growing up, and when my husband (who didn’t have parents to teach him) and I got married, neither of us knew how to handle finances. Thankfully God had a bubble around us or something, because it never occurred to us to get credit cards when we turned 18, and when we got married (at 18 and 20), we took our income, paid our bills, and spent what was left. We never got behind on our bills, and we only spent what we had. We’ve never had debt except for $2300 in student loans that we paid off very quickly after marriage…. it never occurred to us that spending more than we have was even an option! But I will also be talking to my children about building credit early on because my husband and I have no credit whatsoever, and we’re not sure if we will be able to buy a house or not. I would like that to be an option for our children though, so we’ll be teaching them all about credit from the get go as well. I wish my parents had taught me about finances!