By Bear State Bank

Mama Bears. Part 3.

By Gwen Rockwood

Are your young cubs money-savvy? It’s never too early to start being smart about money, a subject we’ll cover regularly with Gwen Rockwood’s Mama Bears column.

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Kids are quick to ask questions, and they don’t shy away from the tough ones: Why is the sky blue? What happens after we die? How did a baby get into her tummy?

Parenting books and stories from fellow parents help us anticipate those questions and think about how and when we want to answer them. But many of us are caught off guard when our kids ask about money. Sooner or later, kids are likely to ask at least one of these questions: Are we rich? Are we poor? How much money do you and Dad make? Why can’t we just get a new car?

If you’ve ever tried to tap dance around a money question, you know how awkward it can be. In our culture, money is private. It’s often considered rude to ask about it and tacky to discuss it. But as our kids’ primary teachers, we have an obligation to answer their money questions in ways that will help them learn to use money well in their own lives.

So how should you answer a question like “Are we poor?” Ron Lieber, a father who is also a New York Times finance columnist and author of the book The Opposite of Spoiled,” says he begins the answer to any money question with a question of his own – “Why do you ask?” He says there are two reasons why he does it. The first is to guarantee that he has at least another 10 seconds to think through his answer, and the second is to find out why this question is on his kid’s mind.

Sometimes money questions come up because of something your child heard another kid say at school. Or it may come from a place of true fear, particularly if your kid has overheard an argument about money at home. Lieber says to be careful not to say “Why do you ask” in a tone of voice that is disapproving or accusatory because that could shut down an important conversation.

For most of us, Lieber offers this as an example of how to answer the “Are we poor” question: “People who are poor don’t have everything they need, like food and clothing and medicine. We have those things, so we’re not poor.”

“Curiosity is just another word for trying really, really hard to figure out how the world works and how grown-ups make decisions.”

When kids ask if the family is rich, Lieber recommends helping kids understand what things cost and what the family spends, since the amount of money earned isn’t as critical a factor as how much is left over after the bills are paid. For older kids who show a genuine interest in understanding more about money, you may want to show them the family’s credit card bill and talk through details.

Keep in mind that kids ask about money because they’re trying to understand. They’re not usually questioning the wisdom of their parents’ money decisions. Lieber explains it this way: “…Curiosity is just another word for trying really, really hard to figure out how the world works and how grown-ups make decisions. Getting angry or defensive about all of that won’t make your kids smarter.”

Lieber writes that parents usually avoid giving information about the family’s finances because they’re worried the kids will tell other people. While it’s smart to make sure kids understand that money conversations should stay within the family, Lieber downplays the likelihood that kids will broadcast the information to friends. “…Parents shouldn’t underestimate how much kids just want to be like everyone else,” he writes. “Children of all ages generally don’t want their peers singling them out as having more or less than others, so they may try harder than you do to keep the information private. Few of them want to be the richest kid or the object of anyone’s pity.”

How much detail you offer when your kids ask about money is dependent on their age, ability to understand and their level of interest. But don’t wait too long to have those conversations. Money decisions are a big part of our daily lives. Pretending that they’re not doesn’t do our kids any favors.

As Lieber writes in his book, “What we make and how we make it is so essential to our lives that it seems wrong on the most basic of levels to shroud it in mystery and silence.”