Frankly the money that we have coming in has a lot of zeros attached to it — and so does the money going out — leaving us with about two zeros in between. My kid is in 3rd grade, and understanding lots of zeros is still a little difficult for her. Even for my husband, [who is an electrical engineer and deals with fractions of nano-seconds for a living] how all our finances work is more than he wants to know.

Instead, for now, I have my kid on a ‘ticket system.’ She gets a couple tickets every day to spend on things she wants — usually tv or computer time, stuff I’m not too thrilled about her doing a lot of. Then she can earn more by doing things she doesn’t much like [job-like] such as helping with laundry, cleaning her room, eating all her veggies, finishing her homework, etc. At the end of the week, she decides how many unspent tickets to turn in for $dollars, and we take those to the bank to deposit into her savings account.

She has very quickly come to understand working to earn money/tickets which translate directly into “things you want” — and once or twice when she’s used them all up she’s asked me to borrow tickets. That’s where it really gets good.

She wanted to borrow 3 tickets [which is what she has to pay to watch a movie]. I said sure, but in three days, I’ll need you to pay back 4 tickets to cover the three you borrowed. Put so plainly, it was immediately clear she didn’t want to borrow, and instead would knuckle-down and earn the tickets instead. That seems to have stuck with her as she’s only asked to borrow tickets one more time — and reminded of the terms, she immediately dropped the request.

Furthermore, since these tickets are worth $1 and she will often only save about $5 by the end of the week — it has helped a great deal to put in some sort of perspective, how much $20 is, or $100. Oh, and any online computer game membership she wants, she has to pay for — that has made her far more discerning in her choices, and reduced the nagging for them to nil. In fact, nagging for most any toy has virtually disappeared. She knows she has the power to save up, if she really wants it — and if she has coveted item, she can’t have the other. And if I choose to get her something, she REALLY is thankful for it because she knows how much work it would be for her to have to save up for whatever it was.

As a funny footnote to this… She has indeed put about $350 away over the last year [birthday checks help a lot!]. For that, she has earned exactly $.03 in interest. I don’t bother with the ‘save your money and it will grow,’ speech, as I’m afraid I don’t much buy into that myself. Instead we focus on saving up for something you really want — in this case, it’s her share [her goal was to pitch in and pay $300 toward the trip] for a family trip to Orlando.

This is definitely a tough one and I think it’s largely based on mutual trust with your child. You don’t want your child blabbing to all of their friends about your finances, but they have to learn somehow. I’m not sure how I’m going to approach this problem when my daughter grows up. I think I’m going to feed her information little by little and see how things go. I’ll let you know what happens when I cross that bridge.

I plan on sharing all that with my kids but I know that means I’ll be sharing with their friends and parents. But whatever, that’s a small price to pay. The kids need to have a realistic view. Maybe even a friend (or friend’s parent) will also get a reality check.

The kids can only use the info against you if you let them. When you explain that you have XX in savings then you also need to explain why. That you are saving up for a car so that you don’t have to waste money on interest. Or for retirement, or emergencies, ect. The kids need to know that the money represents sacrifices and purpose. The savings fairy didn’t bring it.

I always wanted to know how much my parents made growing up but they used to always brush off the question. I naturally assumed that they didn’t want me to know because they didn’t want me to use it against them. Your kid sounds like he’s a bit young at this point, but clearly he’s curious, otherwise he wouldn’t have asked you the question.

I’m 33 years old and I just recently found out how much my parents make. They aren’t doing bad, but my salary estimates were way off. Back when I was in high school, I was probably off by 4X. It turns out that I would be mired in student loans had they not gotten lucky during the stock market boom of the late nineties. Actually come to think of it, just 2 stocks, Oracle and Microsoft.

Once had my son ask why I don’t pay for something (I’m divorced) for him, and that his mother does. I told him that his ma does not work, I give her a lot every month to pay for their stuff – and he said that the money I send was for her. My kids really have no idea.

Thinking back in my childhood, I think I didn’t have too big misconceptions about how much money my parents were making. I more or less knew the sum. Then again, because I didn’t understand household expenses at all, I too thought my family had a lot of money…

For some reason, now that I’m grown up, the roles seem to have changed. I know that my parents don’t have that much money, but for some reason they think I do. Which quite frankly isn’t so.

Talking about money is always so tricky… Thanks for the great post! I’ll try to not make these mistakes with my son.