“Hey Dad, how much money do you make?”  Our 9 year old son stood in the doorway to the kitchen, his fingers tented.  Calculating.  My husband paused, the milk jug in mid-pour, and looked at our son.  He set the plastic gallon down.

“I’m not sure I’m comfortable talking about that, buddy.”  He turned his back to the kitchen counter and leaned on it, his ankles crossed, while he sipped milk.  Our parents didn’t talk to us about how much money they made and how much things cost until we were adults, when we were making our own money and our own way in the world.  We had no precedent for how to talk to our young kids about these things.

“My parents never talked to me about that when I was growing up, so I’m not sure yet how I feel about talking to you and your sister about it,” my husband said.  I finished unloading the dishwasher, dried my hands, and leaned against the opposite counter.  Our son waited in the doorway for more explanation.  “How much we earn is not something you should be talking about with your friends, for one thing.  It’s a private matter within a family, and comparing incomes can make some kids feel less than or jealous, and it can make others feel superior and powerful.  So no matter what we decide to tell you, our family finances are our own business, not to be discussed outside of our family.”

“Okay,” our son said.  He got that.

“The other thing is that telling you how much money Dad makes is only a fraction of the story,” I told him. “The more important part is where all that money goes.”  I remember overhearing the salary of a teacher when I was in elementary school.  It was maybe $25,000 at the time.  $25,000!  The things I could do at 9 with $25,000!  I was awestruck by the possibilities of that much money.  I imagined my teacher diving into piles of greenbacks like Scrooge McDuck.  She was rich.  Rich!

Our son agreed.  His eyes lit up at the thought of $25,000.  “I could buy every LEGO set there is with that much money!”  He grinned, “And a WiiU.”

We laughed.  “Unfortunately, $25,000 wouldn’t actually go very far if you had to pay to live, like you do when you’re an adult,” my husband said.  “There are rent and electricity, clothes and groceries.”

“Car repairs, gas,” I said.

“Vacation, camping, soccer, swimming.”

“Health insurance, doctor bills, taxes,” I said.  “It’s not like your allowance where you can spend it on whatever you want.”  I remembered the carefree days of my money being all mine – birthday money, pocket change for small chores, paychecks from summer jobs.  Every penny in my piggy bank could be spent on Barbies or books, clothes or cassette tapes, posters, candy.  Whatever I wanted, no strings attached.  Mom and Dad took care of the necessities, I didn’t need to worry myself about those.

I looked at my husband.  “I don’t know babe, maybe we should think about talking to the kids about this.  It was a pretty rude awakening to me when I got into the real world and started making money, but the money wasn’t ‘mine’ anymore.”  Watching that paycheck shrink to almost nothing before I could buy something for myself was a hard lesson in growing up.

“How’s this, buddy,”  I turned to our son.  “I’m going to be working on our budget over the next couple of weeks.  Do you know what a budget is?”

Our son shook his head.  “Not really.”

“Well, it’s when we look at how much money we bring in – our income – and plan out how much everything in our life costs – our expenses.  All those bills Dad and I were just talking about – food, rent, clothes, cars, that kind of stuff.”

He nodded.

“Once we get our budget figured out, maybe we could sit down with you and answer your original question about how much money Dad makes.  We could show you how much his paychecks are, and where the money from those paychecks goes each month.”  I looked at my husband to check that this was okay with him.  We were in new territory here as parents.  He nodded.

“Money is tricky,” my husband said.  “Your mom and I have been trying to figure out how to be smart about it the entire time we’ve been married.”

I laughed.  “Yeah, and we’re still trying to figure it out, fifteen years later.”  Maybe this could be really good for our kids, to teach them early.

I walked over to our son and put my arm around him.  “Would that be okay with you?  If we waited until we could give you the full story?”

“Yeah,” he said, and hugged me back.  He looked at the floor, thinking about the precious dollars in his savings account, the allowance he’s been putting away for months now to save for a WiiU.  Then, still hugging me, he looked up and said, “But I don’t want to be a grown-up.”

To make sure we’re not making a huge mistake in discussing details with our kids, I found a couple of resources to help get us started.  How are you teaching your kids about money?  Any tips or recommendations?  Thanks!

Dos And Don’ts For Talking To Kids About Money On this NPR Talk of the Nation (TOTN) segment, host Jennifer Luddon, her guests, and callers discuss when to start teaching kids about money; starting the kids paying the household bills  in high school so they see how much things cost (using Mom and Dad’s money); prioritizing spending; stressing the importance of planning and achieving an education without debt, etc.

How to Talk to Your Kids about Money This comprehensive list covers why you should talk to your kids about money, when to start discussions, dos and don’ts of teaching them, and how to get them involved in saving money.