Why You Should Tell Your Spouse and Your Kids About Their Money – Part 1

In my family, money was never considered a woman’s concern. My dad and older brother talked about stocks here and there, and my mom freaked out when she knew that the market was doing bad, but for the most part, the ladies of the house (i.e., my mom and I) never really knew what was going on with our household finances.

I grew up watching my mom worry and obsess over money without knowing the reality of her situation. She didn’t understand that the market fluctuates, and if you asked her how much debt, savings, etc we had as a family, your guess was as good as hers. I can point the finger at a lot of people in this situation, but I don’t think it’s necessary.

When finances are kept a secret within a family, everyone pays the price. Today, I’ll tell you why. And, in part two, you’ll see how I’ve personally learned this lesson.

Financial Responsibility
The obvious reason to get everyone up to speed about your family’s household finances is that it teaches “money smarts” to every member of the family. It goes without saying that giving your family a solid foundation of money management skills will serve each of your loved ones for the rest of their lives.

Here are a couple of ways to get started:

• Choose an easy-to-read book on financial basics and make it a book club read for your whole family. Suze Orman’s Women and Money is a great starter book, and the Motley Fools investment guides and books do a great job of teaching the basics from A to Z. Check www.amazon.com for all the various resources available on the market.

• Give your kids an allowance so they learn how to work with what they have. Don’t budge on the allowance. Let them learn how to save up for special items they want to buy, so they understand the value of work and actually appreciate the idea of earning a living one day.

• Take a class together, as a family. Your local community college or informal educational institutes (ex, Learning Annex, etc), might have a money management course.

• If you have a financial advisor, make it a family affair. Don’t let the kids run upstairs to watch TV! Have them sit down and see exactly what’s going on. Let them see that speaking and caring about money is a perfectly healthy thing.

At its worst, money can represent power and control when it’s not talked about openly within a family. But when your kids and your spouse are not afraid to ask about money, to talk about money, etc, it’s like pushing a huge dark cloud off of your house. It then can represent strength and honesty, and create a new level of trust and openness that can spread to all aspects of your family life.

And beyond all the touchy-feely benefits, you could actually save money by being more honest about it. Stay tuned for part 2 of this segment and you’ll find out why.