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August 06, 2012

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They figure things out.

They know they can go to college while alot of there friends will struggle becasue the parents did not plan. They have a car to share while there friends don't have one.They know there mom and dad have good to well paying jobs while there friends parents have been laid off for months.

Actual amounts the don't know but we do discuss things as they get older in more detail.

We have dealt more with concepts of wealth (dismissing the idea that someone that spends a lot of money is rich/wealthy). We have also emphasized that since we don't live extravagantly we can afford the things that we do want/need. We have said that coming out of college with debt is an idea that we do not support and that if they do a good job (do their part with grades, a major with a future, and a part time job) we will do out part (tuition, room & board) at a reasonably priced school.

Someone else said: they pay more attention to what we do than what we say.

If they see us making tough choices, they will ask questions, and that's the best time and way to educate them.

Ask me. I don't have kids - that makes me the biggest expert of all! :)

I could see sharing if you are having difficult times but if you are doing well kids are likely to brag to their friends or expect more. I would still teach my kids how to handle money but I don't think they need to know all of my details until they are in a position where they can truly understand like their first real job.

I have managed my children's investments for the last twenty years. As soon as I retired I just switched gears from writing software that helped design weapons of mass destruction to writing software to help make sense of the behavior of mutual funds and market indexes. The latter was far easier.

Our three children know next to nothing about the financial markets and are happy to have me do it for them. Even though I am almost 78 and they are 53, 51, and 48 I have used the same investing style for all of our accounts, including my wife's IRA, and it has done very well for each of us. None of us have had a losing year since I took over in 1992. I wonder how many readers can make that statement. From 1992 until the end of 2007 I invested quite aggressively, since then I have been using a conservative, income based, style which takes a lot less work and requires a lot less knowledge.

I am closest to my 51 year old daughter, see her every week when we go on a long hike together, and since she has the best education of the three, especially in Math, I will be grooming her to take over. I negotiated her divorce settlement about 5 years ago and since then her portfolio has grown to 40% the size of my own and is already generating $122,000 annually of tax free income which all gets reinvested. It will have grown to about $160,000 annually by the end of 2016 when her alimony ends and she will need to dip into it for living expenses.

Kids do watch how you manage your money. So it's good that you do expose them to it. Most kids don't need to know everything. Besides, kids do talk to their friends and you wouldn't want them talking about the family finances.

It's also up to you to decide how transparent you want to be with your finances with your kids. As long as they develop good financial behaviors, you are doing a wonderful job :-)

Not at all to this point. My daughter is two. When she does get older and we have more kids, I tend to agree with you. They don't really need to know. As matter of fact, I think knowing, say if the situation is not good, puts an added burden on them that won't help them be better stewards of their money.

My son is two, so he understands nothing. Growing up I understood the general picture. We weren't wealthy but we had what we needed. We took camping trips for vacation instead of ski trips like some friends. We didn't eat out except for birthdays. Mom used coupons at the grocery store. I knew exact numbers as far as income went when it came time to file for the fasfa for college financial aid. My step father passed away from cancer my freshman year of college and I moved home to help with three younger siblings and commuted to college twice a week. I knew more at that point because money was tight and my mother sometimes needed someone to talk to about it all.

I just want to add that the prevailing sentiment seems to be that kids will blab about their parent's finances. I understood that money discussions were a private family thing and would never have discussed anything with my friends. My friends weren't interested in our money matters anyway. So make your own judgement based on your individual child.

Our teenager knows our net worth, our incomes, knows were debt free except for the house, and whatever she asks we will tell her. Why keep secrets?

My wife and I have been open about sharing our past money mistakes with our kids, and explaining to them how they can make better choices than we did.

One thing we've started to do differently in the last few years is watch our words with regard to money. When the kids asked why we couldn't buy something or go somewhere we used to say "We can't afford it." And then we realized a better answer is "We choose not to spend our money on that." And then we talk about the decisions we all need to make in life, and how some things are more important to us than others.

One of the key money lessons we hope they learn from us is that everything is a choice. A choice to spend money in one area is a choice to not spend it in another. And the choice isn't necessarily about one being right and one being wrong, but about which choice best helps us achieve our financial goals.

My kids know a great deal about our finances, as a homeschool lesson last year I even had them work out a fantasy budget for the type of life they wanted to live and then turn around and write out our actual budget of how we live now....it was a big eye opener for them. This year I may have them take over the finances all together as a team between the two of them. I have nothing to hide and talk a lot about finance issues, investing, mistakes, economy and such. But yeah, they know quite a bit about our finances.

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