Family Money Transparency: How Did Your Parents Talk to You About Money?
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This came up recently in a conversation with an old friend, and I thought it would be an interesting discussion here: How did your parents talk to you about money? Did you know how much your parents made, how much your home was worth, how much they could contribute to your college tuition? (How did your partner’s parents talk about money? How will you talk with your kids about it?)
My friend noted that her parents raised her with complete financial transparency — she knew how much they made, what every vacation cost, how much the house was worth, the status of her college fund, and more. By contrast, her husband’s parents talked about… none of that. The family finances were completely opaque, beyond the fact that he knew they were comfortable.
In my own childhood, I suppose I was closer to her husband — I never thought about money. I never thought of us as rich — I had no pony! No butler! Not even a small mansion! Just a suburban existence. Especially compared to the television shows of my youth — Silver Spoons, Prince of Bel-Air, Dynasty, etc. — but we had a comfortable upbringing.
I’m proud of all of my financial literacy now and my relative skill with personal finance — but I was actually quite dumb with finances until my early 20s, at least.
Exhibit A: I worked and worked and worked to be able to graduate early from college… but my expectation was that once I met the credits, then I could take the “fun” classes at my university. I told my parents this, and there was a shocked silence, while my mother choked out, “You realize that’s $14,000 to take the fun classes, right?” So was that a no?
Exhibit B: I got a job offer while still in college from the place I’d interned the summer before (Family Circle magazine, which just closed last year!). I had stayed in touch with an editor and freelanced some stories during my last quarter at Northwestern, and then the editor’s assistant quit, so it was all very easy. I certainly didn’t negotiate the salary or benefits, and in fact I may not have even focused on those until the offer letter arrived in the mail.
“$24,000 a YEAR!” I whooped, running around the house with my younger brother. “I’m RICH!!!! What am I going to DO with all that money?”
Sigh.
So as my youngest is almost 10, now, this is all starting to come up, and my husband and I are probably due for a discussion about this. (We MAY have actual date nights on our horizon sometime soon once we get fully vaccinated, EEEE.)
But let’s discuss — how did your parents talk to you about money? Was there anything helpful (or unhelpful) that they specifically told you or raised you to understand? What will you duplicate (or not) with your own kids?
Stock photo via Stencil.
Psst: We always used to call money discussions “Tales from the Wallet” at Corporette — so we’re continuing the tradition here! Pictured – love this wallet from Brahmin!
My parents were not super transparent – I was SHOCKED when I applied to college and found out how much they made (from the FAFSA). I had been under the impression that we were poor – not, like, unstable or or insecure, just that we had to be very very careful with money. Nearly all my clothes were thrifted or from the clearance rack at JC Pennys, my mom was a careful meal-planner/no waste, there was always an atmosphere of worrying, just a bit, about how much things cost. So I assumed I’d be eligible for need-based aid and then would have to pay for the rest of college myself. As it turns out, my parents actually paid for my and my siblings’ private college out of pocket. So, uh, not poor.
I think my misapprehension was in part due to the fact that my family was actually poor when my parents got married and when they started having kids – my dad’s job is heavily impacted by market cycles out of his control, and my mom stopped working for a few years to manage my younger sibling’s very severe congenital disability, so I know we used WIC and some other state programs for several years when my siblings and I were all little.
But I missed it when things turned around for them financially, although now I see there were clues – vacations got progressively longer/more elaborate; my younger siblings were allowed to take more lessons (violin, gymnastics, etc.) whereas that was financially out of reach for me as a kid. And of course, part of the reason my parents were able to pay for our colleges is probably because they were very careful with/worried about money.
As it turns out, my husband’s family had the same income trajectory growing up, but he was always under the impression that his family was very comfortable/well-off, because his parents were more invested in portraying that, even while there was a lot more financial instability + big up-and-down swings in his home. So we had the same family income levels, but I thought I was poor (but secure) and he thought he was rich (but insecure).
Now we’re in the weird place of being better off than either of our families of origin (thanks to my biglaw salary), but “worse” off than many of our “peers” (DH works part time at a hobby-turned-side gig, rather than also being a biglaw attorney). My parents are very financially secure but still pinch pennies, while DH’s parents seem intent on blowing through all their retirement savings before they are 70.
So my kids think we are “solidly middle class” (we are not, but we are much more careful than many of their private school peers) and that Grandma and Grandpa are poor (they are not) and that GiGi and Pop-pop are rich (also not).
I feel totally unprepared for how to handle these conversations with my kid (5.5). We do regular food donations to the church food pantry and talk about how fortunate we are to have a house, and food, and clothing, but so far we haven’t gone beyond that. Then a relative sent kiddo a $100 bill for his birthday and…. he had zero frame of reference for it, it was hilarious.
Both DH and I grew up right on the border of lower and middle class, and now we are very comfortable and on track to build a sizable nest egg. But I really want my kid to understand the value of a dollar and am trying to think about the best way to get there. “The Opposite of Spoiled” by Ron Lieber is a good starting point.
This topic is so broad! My parents weren’t secretive about money but never really discussed how much things cost. I knew our house was fully paid off when I was young and I did an expensive sport and we traveled internationally every year (although some of the travel was related to their jobs). But our house was tiny, their car was ancient and we almost never bought new clothes or electronics to the point that I got teased in school for being “poor” so I thought we were barely middle class. But I now realize they were very comfortable and just didn’t prioritize those things.
They did a great job teaching financial literacy, although I think that’s kind of a different subject than transparency. In high school, I had a credit card and a bank account and allowance that was meant to cover all my expenses. If I had a big expense (like a school trip or something) that wouldn’t be covered by my allowance, I could come to them and we’d discuss it, but I couldn’t just ask them for $20 for gas at the end of the month because I was supposed to budget and save for routine expenses like that. Definitely plan to do the same thing with my kid.
They paid for my expensive private college in full and gave me $10k toward law school. I covered the rest with a big scholarship and loans. In contrast to Kat’s parents they really wanted me to stay in college all four years and have the full college experience, even though I had the credits to graduate early. My parents were government workers who had slowly but steadily increasing salaries for most of my childhood, but a big income jump for them in my early 20s combined with no longer having to pay tuition meant that they were suddenly a lot more than just “comfortable.” I knew this because they talked about it and also they made lifestyle changes like flying first class a lot more.
My husband’s parents are a mess. MIL has a steady but modest income and FIL is self employed and has years where he makes $0 due to losses and years where he makes $500k (allegedly… I’m not sure I believe it…he’s a bit Trump-ian in that regard). My belief is they spend pretty much everything they earn and have essentially no savings. At one point, I think when DH and I were engaged, his father called him and said “Oh by the way there’s $20k in loans in your name that you owe because we’ve decided not to pay.” I still don’t fully know what happened, but I gather his parents promised to pay for his college but then took out loans to cover it, but because he was the “borrower” he was liable for the debt when they decided to wash their hands of it. Fortunately I was in Big Law at the time and it was not a financial hardship for us but I was Not Happy about the surprise.
When DH and I got married, I wanted a pre-nup to prevent his parents from accessing my parents’ money (largely because of this incident). My parents were *horrified* by a pre-nup (so unromantic!), but eventually agreed to set up a trust for me which their lawyer said was the best way to prevent Dh and his family from getting access to it in the event of a divorce or something like that. I have no access to it currently and won’t get any money until they’re both dead, and I’m not even sure how much I’ll get then because I think they plan to give most of it away (which is fine with me). Unless things go very, very wrong my parents won’t need any money from us.
My in-laws almost certainly expect financial support from us in their age. Fortunately DH and I are on the same page that if it comes to that, they sell every asset they own, we move them to our LCOL city and put them up in the cheapest apartment they can safely live in and buy them food, but that’s it. If they need a nursing home they will have to make do with what Medicare will cover. We’re not going to be funding their $5k/month apartment in their swanky city or any luxuries like travel if we’re footing the bills.
DH and I our very comfortable now. Our incomes aren’t that high compared to many here, but between a Big Law nest egg, living in a very LCOL area and only having one kid, we’re reaching the point where we buy everything we want and still put a lot of money in the bank. Our kid is very young (3) but it’s very important for me that she grows up understanding that she was born on third base. We already talk about how we work to earn money to buy things and sometimes we have to give up buying something so we can buy something else we want. We have mentioned to her that we are lucky because our parents gave us a lot of support in our young adulthood which allowed us to save money for our future when other people were still trying to pay off debt. Obviously these conversations will get more nuanced as she gets older.
Good grief, sorry this was so long, did not mean to ramble on forever, I just felt like there were a lot of prompts!
I grew up “immigrant poor” with parents who really valued education so while we didn’t own a house, a fancy car, go on expensive vacations or buy high end clothes, I did have my full (in-state) college paid for, as well as part of law school. I had a rough idea of my parents’ salaries and while their salaries did increase over time, I don’t think their combined salary reached what my husband and I each make now. They are pretty frugal though and although I don’t know specific numbers, I think they’re in a good financial position now and have never asked us for money, nor do I expect to financially support them in the future, absent extreme medical situations. My husband grew up in a HCOL area but with a “typical” middle class suburban upbringing of dad working for pay and mom staying home. He was pretty much on his own financially post high school and is decently good with not spending money, but I’ve definitely been the one to figure out the fastest way to pay off our loans, save for a down payment and generally manage our finances.
Income-wise, my kids are going to grow up at least upper middle class, but more like rich, and I do want them to be aware of this, and be mindful that while we don’t have to worry about money, we also would rather save and invest than spend on the latest gadget (within reason). And we prioritize education, so we’re saving to pay for their college (at least state schools, or private with some scholarship) in full. That’s one lesson that I will continue from my parents. We’re not as frugal as my parents and spend a lot, although our biggest monthly items for now are housing and childcare, which are pretty non-negotiable.
My mom was the worst because she always talked about money like we’d inherit it. And honestly, I hope we don’t! I want them around for a long time! But they inherited money while young from my dad’s grandparents, so they never had to save for retirement. I worry about whether my siblings are saving sufficiently.
DH grew up feeling very insecure about money even though both his parents were pharmacists with steady employment in a very LCOL city. We were going through old scrapbooks and I read some journal entries from him age 8 that were very focused on how he needed money and wanted to make money and not worry about money – and that kind of broke my heart too. Now, we consistently pay for my in-laws plane tickets to visit us (and pick up all bills while they’re here) because for some reason they think they can’t afford them (they can), which is annoying, but it is what it is.
I want my kids to grow up somewhere in the middle. With a healthy respect for money and savings but also not with a feeling of insecurity about it. I certainly don’t want them assuming any future inheritances! I’m definitely going to do a lot around financial literacy.
I somehow had an awareness of what our house cost but I don’t know how. I may have just asked? My family’s financial situation peaked in the 90s. Even not accounting for inflation, that is when they made the most money. My mom stayed at home and then took “lean out” jobs later to care for my special needs brother.
I was very aware of the fact that my dad made the money and my mom worked for benefits. I’m happy I was raised with an awareness that things like health insurance, etc. have to be factored into an employment situation.
However, I was taught NOTHING about investing, saving for retirement, etc. My parents did those things, and did them well, so I don’t know. I’d say I’m much more financially illiterate than I should be for my age/income.
I’d say I was raised upper-middle class and my household is there today. We didn’t qualify for the recent round of stimulus, but I wouldn’t call us rich, especially where we live. However, I don’t invest, only my husband contributes to retirement (it makes sense, he has a government job with a match etc. and contributes the maximum, and I have a job that doesn’t match anything.) but I’m sure I should be doing more? I don’t even know where to start.
Interesting topic! My parents were not at all transparent with money, but great at teaching financial literacy. They gave me an allowance and taught me to budget, made me open a Roth IRA and put a certain percentage of my earnings there when I got my first job in high school, and gave me access to a credit card to help me build credit when I was in college. I assumed we were comfortable (and we were) because my dad was a doctor when I gave it any thought at all, which was almost never. We lived in a nice suburban midwestern neighborhood in very average, un-fancy house and didn’t get shiny new things very often, but my sister had a horse, and all siblings took music lessons and did whatever sports we wanted. We took long vacations in the summer, but almost always driving and never international. My parents both came from very practical, larger families so they were both generally thrifty. My sister opted to go to a private university instead of the state school that offered her a full scholarship, and on principle my parents made her make up the difference rather than paying it themselves.
My husband’s parents (also divorced) were similarly comfortable, a little flashier about money than my parents are, but were similarly opaque. My dad probably as more than FIL, but you’d never know it to see how the two of them live. Same with my mom and MIL. A few years ago, DH and his sister learned that MIL has essentially no retirement savings, and it’s likely we’ll subsidize her living expenses or invite her to live with us within the next 5 years. DH is a spendthrift compared to me, and tells me all the time how lucky he is that he met me in his early 20s and I started him on saving for retirement and saving, period.
So, my kids are growing up with a mix of the two of us. We are very comfortable, but I prioritize saving and won’t buy dumb stuff… my husband is much likelier to spend just because. My kids have started asking about money, how much we make, how much our house cost etc. There is a LOT more income and socioeconomic inequality here than there was where I grew up, and we are on the good end of it. They definitely see that. We told them we will tell them more about actual dollar amounts when they’re in high school (and have more discretion), but right now all they need to know is that we’re very fortunate that we have everything we need and a lot of things we want. We involve them in decisions about charitable giving, they help shop for food bank donations, and when they want something, I help them figure out how long it will take them to save that much money. We’ve started allowances and encourage them to donate, spend, and save. Our typical refrain is that money is freedom – the more you have, the more choices you have. So when you make a decision to spend, make sure that you’re spending on something that is necessary, beneficial, or brings you enough joy so that you won’t be sad when you can’t choose something else later.
Also, quick plug for the kid money podcast from Marketplace, “Million Bazillion.” Best for ages 6 and up, based on my kids’ interest levels.
I grew up in a single parent household. I thought we were “fine” but my mom was very aware of money in a way that made it feel like our situation was precarious. It was not. The message was also strongly sent that we did not talk about money, so I was very confused and concerned when my mom would spend money (on a trip, new car – that was a BMW- or even clothes). I most distinctly remember the cognitive dissonance in the messages I was receiving. My in-state undergrad tuition was paid for through a trust fund that was funded by my parents before my dad died, but I was responsible for any extras (like beyond the basic meal plan). I funded law school entirely on my own through loans. I took a biglaw job to pay off those loans and to purchase my first home. It wasn’t until three years ago, when my mom offered to pay for my sister, me and herself to fly to NYC, stay in a swanky hotel and see Hamilton that my sister and I finally confronted my mom about this. My mom confessed that she was always very concerned about money but that she has, well, alot.
I have carried this mindset with me into adulthood. I am incredibly frugal, but I do not want my kids to be raised with the same sense of fear and concern that I had and then be absolutely floored by the reality when I find out. I want to be more transparent with my kids, but I find it incredibly challenging.
My parents were not very transparent- and frankly not terribly great- with money. They didn’t have mountains of consumer debt or anything, but for a family with a pretty high income (mom was SAH, dad was a sales exec) they had it all mostly in cash and were pretty penny wise/pound foolish.
We didn’t have any sort of real conversation about money for college. I ended up applying to a lot of elite private ones, and they paid for most of it, telling me I needed to take out $10k/year in loans if I wanted to go (this was 2001, so it was about 50k/year then).
Turns out they hadn’t really saved much, but they paid for college with some savings, a home equity loan, and a bit of bankrolling. I had no idea my college was causing them to take out a home equity loan.
DH’s parents made about the same, but were savvy with money and also taught him about it. They saved for college and told him “we have X. We can spend it all on college, and you can go where you want, but if you go somewhere less, we’ll give you half the savings in cash.” He got a full ride to state school and could have graduated state school with $100k in cash. He ended up going private (where we met) and graduated with $0.
This is a fun question. My parents started off poor, but thanks to my mom’s hard work, ended up fairly well off. It was a shock to me when she informed me in middle school that she was far and away the breadwinner in our family- thanks to the patriarchy I had naturally assumed it was my dad. She still bristles, rightly so, when people make comments about her “spending my dad’s money” since it is far and away the other way around.
Both parents were good about being fairly frugal (my dad took it to the extreme sometimes though- anyone else ever share one soda between the whole family at a fast food restaurant?). However, my mom was pretty secretive with her charitable giving, I think because my dad thinks it’s wasteful, and I wish she had been more open about it. It’s always an afterthought with me instead of automatic and I think it’s because it was not modeled at all growing up.
I had tiny loans coming out of college that I repaid fairly quickly, and my husband had none. I think this set us up for a huge advantage and I hope to do the same for our kids.