What's Harder, Having "The Money Talk" With Your Kids, Or Your Parents?
For some reason, there's little more difficult money-wise than talking to our loved ones about money. We're not so sure why this is the case, but for some reason the financial conversations aren't that easy between one generation and the next. The Wall Street Journal brings up the issues associated with family money discussions in a couple of recent articles...
...discussing many of the difficulties in financial dialogue one generation up and one generation down. With the parents, you're usually discussing how much money they have, if they can make it in retirement, what their estate plans are, etc. Tough stuff since the kids usually don't want to "meddle" and mom and dad can feel put on the spot.
With kids, the conversation is different, though can be as challenging. After all, how do you explain that a rough economy is having financial impact on your family to kids that really can't understand it? (Especially when you can't understand much of it yourself.) It's certainly difficult.
So we thought we'd ask you — which is the more difficult discussion: talking to mom and dad about how well they've prepared financially for the end of their lives or explaining to the kids that they have to forgo camp/a new iPod/vacation because some banks made bad loans/investments across the world?
— FREE MONEY FINANCE (Photo: Remy Sharp)
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Having been in the position of discussing this with my mother, def. the parents.
How about you significant other...
There's nothing quite like chastising your eventual father and mother-in-law about their spending habits before sending them to their room.
Of course, if their room is in your house, it pretty much sucks. (Send whiskey to White Speed Receiver PO Box .... Some City, MN, please)
Parents, by far.
The kids have heard "that's not something we're going to spend money on right now" a lot, so they understand that none of us gets everything we want or even everything we theoretically could afford.
My concession to the current uncertainty is to buy both of them a laptop for a grand each rather than drop $4K on the computer I want for myself.
For my family it was the parents - my depression-generation grandparents actually - trying to convince them they were free to spend their money and they did not need to leave any inheritance for their children who didn't need it. How do you tell someone, "You're 80 years old and have $1M in the bank, stop being a skinflint and buy/do whatever you want!"?
My mother is terrible with money. Never repaying loans. I learned everything i know in spite of my mother, not because of her. Her recklessness and indifference is what aspired me.
Don't have any kids. My parents have always been the "parents". Nobody in my family listens to my advice.
A couple of years ago my mother rolled her 401K over to her friend the salesman who took a nice fat commission on it instead of putting it into the low-cost, no-load mutual fund I found for her.
My aunt took her inheritance and ladders CDs at the local bank because she once bought a stock mutual fund and it finished down for the year.
My brother called me once to complain that he was broke. Next week he called me to complain that he was broke and bought a new stereo! This was the middle of winter with a Harley Davidson in the garage that he owed money on that he couldn't ride because it was winter. Within a year he decided that filing for bankruptcy was the easy way out despite my protests that he just needed to sell the motorcycle and work another part-time job.
I'd say with parents.
My in-laws are terribly irresponsible with their money, to the point that they have lost one home and were a day away from losing another.
It has forced my husband to have to keep track of THEIR bank accounts to make sure his father is paying their mortgage and bills (his little brother and sister are still at home, and he does it for them) and this has caused him a great deal of anxiety. His father has gone so far as to steal his student loan refunds from him. Whenever he confronts his parents about it, they act like they have no idea what he's talking about. It's really sad.
I would say talking to the parents is tougher. Now, I don't have any kids, but speaking from my childhood experience, it's a good life lesson to let kids know that things cost money, and money means work, and if the work isn't there you just have to deal with it and make due. I see too many people my age (I'm 26) who cry about being broke and then go waste a bunch of money on gadgets they really don't need. Kids need to learn the difference between "I need this" and "I want this" at an early age.
As far as parents.. that's a tough one because as the kid you're already looked upon as being the student and not the teacher. My parents are playing the credit card transfer game.. their credit is probably totally shot, they have over $10k in CC debt, and when the 0% promo rate runs out on one card, they just open a new card offer from the mail and transfer the balance. Granted the economy where they live is total crap right now and they barely get any work, but I still feel they could be handling their finances better. I wouldn't dare have that conversation with them though..it's more trouble than it's worth.
@lannister80: They wouldn't send it to anyone. They would, however, send you all the tomatoes and green beans you want from their "victory garden".
It's MUCH harder with your parents. My parents have a "you can't take it with you" mentality, and although I don't care if they pass on any money to me I do care that they had their house paid off and now have 2 home equity lines of credit taken out on their house to pay for lavish vacations and home repairs/upgrades that they want but don't need (a hot tub, a bigger deck, professional landscaping, ect...). They are in their late 60's and can never retire (although they get a lot of vacation time since they have been at the same job forever) because they are too much in debt. I want to see them enjoy themselves, but instead they come home from a 3-week European vacation and constantly complain that they have no clue where their money goes. Any discussions about saving to pay off debt or saving for retirement just get blown off because "we were managing money before you were ever born". It's sad.
@YouDidWhatNow?: Of course, adults make this same decision every day. How often do you see a BMW or Corvette out in front of a 1000 sq. ft. crackerbox house?
Given that when I pass my 5 classes this semester and graduate from 4 years of college, I know I will be initiating this same conversation with my parents. I have already, but only in the short term regarding my coming back to live at home and have a summer job to make *possible* future rent money for when I move out, hopefully by August
I've talked to one professor, and he said that despite the rougher economy, the job prospects in Boston are still pretty good across the board. Anyone know more about the current job field in Boston? Especially for a Political Science major?
@lannister80: My grandfather actually apologized to me because he put all his money in several VERY high dollar life insurance policies, and he wasn't dying soon enough to give me "nice things." It still upsets me that he felt that way - I'd give anything, including my debt-free university education, which that policy paid for, just to have him around.
Kids are kids, they expect to be talked to by older more wise people.
Parents getting advice from their children.. yeah that never seems to work out well.. remember even when your kids are 30 they don't know anything :P
Youth are irrational, yet have the potential to become more rational once they experience more of the world and develop more as an individual.
When adults are irrational, they tend to be that way for many things and will likely not change.
It must be more difficult to have the exchange as a child because you often cannot comprehend what the person is saying. Yes, you understand the words, but not the context or broader meaning behind them.
I've always known what the financial situation was in our house. I was the fastest typer so I was the one entering in the #s on the budget programs, starting in 1st grade. I guess my parents were sneaky in their teaching. My daughter will be doing the same thing when she gets older.
@Eilonwynn: On a non-emotional side note- those life insurance policies are such a terrible investment. My father took one out on each of us, and I had to ask why. Who needs money when I die as a single, 20-something adult?
@Randy Treibel: You and my boyfriend, buddy. His mom is like WTF when it comes to finding new and exciting ways to circumvent chopped up credit cards and hidden check books. It is scary!
@morganlh85: Terribly sorry to hear that - my boyfriend is having to pay his mother's mortgage and ... pretty much everything else she feels like spending irresponsibly on because his 14 year old sister still lives at home, and it is causing him massive amounts of grief.
@Billy Gillispie Halftime Interview: Hey, sometimes people only need a 1000sf house and would prefer a nice car. I much prefer having my pizza delivered in a leased Acura. Now that's special.
Parents. Hands down.
My parents never bought us things, so I will probably be a miserly parent as well. "you want that expensive thing a majig that will be passe in a month, use your own darn money....MONEY DOESN'T GROW ON TREES"
After moving all over the country as Army brats, when we got out and my parents bought their house we were just happy to have walls we could hang stuff on...
@Canino: My grandmother finally came around this past year. Until then she had actually been SAVING money from every SS/pension check!
Parents.
I had the fortune of growing up relatively poor in a home my parents had rented out while my dad was in the Air Force and then had to completely rehab when they got back. I was told later, (when I was 20 or so) that my parents had actually left me alone for at least an hour a day while they both switched jobs. (My mom worked days my dad nights, and they switched at about 3 or 4 pm, leaving me to "nap")
Once I learned that I was extremely grateful for having lived in ignorance of that fact.
Any discussion of substance with the parents or in-laws is frustrating enough to send me searching for wine
@Blinky987: As a single, 20something adult, if I die my sister's mortgage gets paid off. For the 3 bucks a pay period I think that's worthwhile.
Talking to friends about money problems can be painful, too. I have a good friend that retired with a lump sum retirement package of $328K from a telephone company. I told him at the time that was not enough money to retire at age 51. Now, 9 years later is has $3,360.00 to his name. It is all gone. He still owes $32K on his condo. He can't seem to find a job. He is selling his condo, which has around $110K in equity. What a mess.
@KyleOrton: true, some people practically spend more time in their car anyway. I don't want a big house because I hate cleaning
Kids are tough. But parents' duties include trying to keep them from learning the hard way.
To that end, I got my kids pre-paid cellphones and made 'em keep track of their time. If they go over, they can get an "advance" of 30 minutes but no more than that. It's a great way to teach the value of something, budgeting and only spending what you have.
This method won't work with everyone but it's working with them.
My next move is to do this with MY mother. Oh boy...
@Randy Treibel: Agreed. How about talking to a parent who hasn't prepared? Although most of my mother's money issued were due to her having a joint credit card with her sister who was very irresponsible and essentially ended up ruiing my mother's credit, she is still horrible with managing money and saving for the future. At 52 my mother have zero in retirement, very little savings, and still renting a home. It's sad to see because she worked very hard as a single parent to take care of my sister and I following a separation from her boyfriend who took care of most of the household expenses for many years. Sometimes I feel bad about her situation and will do what I can to help if needed, but also feel that she has had time to learn how to be responsble and get back on her feet. Thankfully I'ved learned from this situation and haven't followed in her footsteps and have taken advice from my dad who is in the opposite situation.
@morganlh85: I have a couple different friends that have the same problem.
Their parents steal from them. School refunds, open up secret credit card accounts, sell their information to people, etc.
It is pretty messed up.
My kids? Asked me 2 days ago to go to DisneyLand.
The conversation: Not this year, mommy doesn't have enough money.
My Parents? Medical bills out the wazoo + 3 years away from paying off the house they took out $56,000 of home equity loan to 'remodel'. they got new roof, windows and a fence. Bought a new car. Took in my 35 year old brother, his friend and his friends wife. Do they pay rent? money towards the phone, internet, electricity, water, etc? NO.
The conversation: WTF ????
@MaytagRepairman: You talking about money with your family reminds me about talking technology stuff with my "must have the latest gadget" father in law. This is the man who now drives his garbage to the dump in order to avoid the $40 quarterly neighborhood garbage fee, but still pays $19.95 a month for dial up internet in case the cable modem goes out!
@ngoandy: That sounds familiar. The Receiveress had a credit card with her parent's name on the account when she went to college. When she graduated and got a job, she told them to close the account. Instead, her mother maxed the card out then didn't pay it. Then she lied to us about it. Now part of my free time is spent throwing CACH schmucks off my lawn while trying to figure out exactly how much to pay.
@edwardso: I remember very well in grade school a girl in my class announced that her mom had given her the decision to take a fun vacation to Disney World or buy a house. We happened to have an amazing teacher that year, he turned this into the class discussion where we logically weighed the pros and cons of the decision to obviously conclude that the house was a better option. I've always wondered though if this classmate of mine actually had that decision or was just being dramatic (she was the type).
@Billy Gillispie Halftime Interview: I get what you're trying to say, but many people don't feel the need to have a 3000 sq. ft McMansion. The better example would be the new condo building I live in: I am renting there because the owner is so desperate to get all units filled that the rent is just barely higher than older apartment buildings with crappy 80's appliances. Anyway, about half the cars in the underground parking area are new BMWs, Mercedes, Audis, and Saabs. That throws me.
@Eilonwynn: You hit the nail on the head, Eilonwynn. My grandparents did the same thing. I'd do anything to see them again. Just to spend one more day with them.
Talking to my mom about finances usually entails thinking of logical solutions to every possible future outcome of what I'm attempting to do. Needless to say, I tend not to consult home too often for finances unless I need the pessimism to balance out a crazy idea.
However, it's taught me to be extremely responsible in terms of finances. I don't impulse buy very often, keep track of my bills and only have one outstanding loan. In my family, you pay your own way if you can.
Parents, without a doubt. My mother is a widow, but not yet old enough to receive retirement money / SS. She does, however, have a lot of money in the bank, and no debts. Unfortunately, since she isn't "making" money, she refuses to spend any. This may not sound like a bad thing, but she takes it to the extreme, and doesn't really let herself enjoy life (she basically sits at home and watches TV, no other activity).
She's always been quite thrifty which has been great for the family, but I think she's going overboard.
Back on topic, my reasoning for some parents being harder to talk to is that they don't take their kids seriously. You'll always be their "lil' punkin" in their eyes, regardless of age.
@SarahC83: Well, renting doesn't mean you're too poor to buy a home, or that you're making poor decisions. As we all know now, homebuying doesn't equal responsibility.
Unless you mean that it's interesting that most of the people who are fellow renters have luxury vehicles?
@pecan 3.14159265: Well said. I'm pretty financially responsible, but its just absolutely impossible for me to justify purchasing a house until I find a new job. 1 because of the money involved and 2 because I hate my job and don't want to get stuck in a place with a 60 minute commute.
@pb5000: The US median home price has been over $100k since 1992. Damn, that Mickey demands a pretty penny for the Disney World experience.
Hey, we went on a Disney vacation when I was 11! Are you saying we could have had a 2nd home??? Woulda come in handy during my moody teen years.
Several years ago while I had a great paying job my younger brother and I, both in our late twenties had to take my parents in. Their whole life they had no money problems and then 2 years after September 11th, after many bad decisions they lost it all. They moved into my brothers apartment and he was already rooming with my little sister and other brother. My parents were resolved a little too eagerly to get themselves out of this situation. The final straw was asking me to take out a loan for a down-payment on a motorhome with my car. My brother and I finally decided we had to have a serious talk with them about their spending decisions.
Needless to say it ended with my mom in tears trying to hit me while my dad was pulling her off. Parents don't take kindly to being told they are not doing the right thing. In the end it worked out, everything did but that was an awful moment in our history.
@Oranges w/ Cheese: I think we have the same boyfriend. He needs to constantly keep tabs on her, and it makes me realize how lucky I've had it with my parents. (Who have their quirks and all, but are financially stable and generally predictable).
@Randy Treibel: @Cat_In_A_Hat: I think there's a lot of people who are in this situation, even though it's not usually discussed. I'm sure it can be just as stressful as taking care of an ill parent or sibling, which is something that's gotten more visible, and I hope that there will be more resources for people coping with the stresses & burdens & conflicting feelings involved in helping (or cutting off) a relative in financial trouble.
I feel fortunate I don't have to deal with that, but I know a lot of people whose lives are made a lot harder by their parents' money troubles.
...depending on the age of the kids, I have to wonder whether you mention it at all.
I was amazed that a family I knew let their kids decide whether they'd buy a "real" house and be skimpy on nice-to-haves like wads of toys, video games, etc., or live in a trailer park and have all the toys they wanted.
...which way do you think the kids went?