4/17/2006

Advice from Nashville's leading Financial Aid Advisor Dave Ramsey

 
Dave Says
By Dave Ramsey
Author of:
Financial Peace and
The Total Money Makeover

"How much should we tell our kids about money?"

Dear Dave, 

My husband and I disagree over how much information to share with the children about our personal family finances. When is an appropriate age to begin discussing these things with them, and how much information is too much?

Kimberly

Dear Kimberly,

Once they reach a certain age it’s healthy for kids to realize that living in the world costs money. The key is to find small things – teachable moments – that are age appropriate.

In our house, the kids were allowed to help fill out the check register and watch the process of paying bills when they were 10-years old. Sometimes you can’t explain things to a child by just talking. But if they write out a big number and see $200 going out the door to pay the electric bill, a light goes off in their heads and they’re like “Wow, that’s a lot of money!”

Sit down with your husband, and find out why he feels the way he does. If it’s personal insecurity, then you need to talk with him and help him work through this issue. If he has a valid reason, like he’s afraid it may hurt the child in some way, that’s a different story. Five-year old shoulders weren’t designed to carry the burden or intimate details of foreclosure on a home.

Knowing how to handle money is a life skill, and parents should teach kids about finances and the importance of handling money properly at an early age. Turning kids loose in the world with no other skill than playing Nintendo is not a good plan – it’s child abuse.

- Dave

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