This is the question my 7 year old asked me the other day and honestly, I panicked.
I am a millennial, and we're known as "cycle breakers." We follow experts like Dr. Becky, learning how to hold firm boundaries with empathy, leaning into feelings of discomfort instead of sweeping them under the rug. But in that moment, I had no idea how to respond.
For one, my husband is the one bringing home the pay check - so how does that reflect on me? And what would my child do with this information? Tell his friends? That possibility opened up so many pandora's boxes that I felt ill-equipped to handle. So I turned to those wiser than me, hoping for guidance or even hard data.
Start Early - even if it feels "weird"
Children start forming ideas about money much earlier than most parents realize, somewhere around age 5, they already begin to develop emotional responses to saving and spending. These early experiences can shape their financial behaviours in adulthood. By talking about money as part of daily life (as it very much IS apart of everyday life), the conversations are normalized and the scaffolding to bigger, more complicated conversations are formed. Again, the theme of money is taboo here is alive and well. Canadians are notorious for keeping their financial state top secret, which becomes a perfect breeding ground for shame, and not to mention the missed opportunity to learn and grow from sharing information. So here's the breakdown for sharing is caring with your kids:
Age-Appropriate Conversations About Income
Ages 3-5: At this stage, kids are beginning to grasp basic money concepts, like identifying coins and understanding that money is exchanged for goods. Focus on teaching them about the value of money through play, such as pretending to run a store at home. You can even extend this to real-life scenarios, which your children are exposed to regardless, like going to the grocery store and talking about the basic concept of "things cost money". You don’t need to discuss income yet; instead, focus on simple concepts like saving and spending.
Ages 6-10: As they begin to understand numbers and math, kids might ask questions like "How much money do you make?" At this age, it’s not necessary to give specific figures. Instead, offer a general answer, such as “We earn enough to buy what we need and save for the future.” This is more about developing the emotional response to money, eliminating the scarcity mindset, by reassuring your child. Other practical ways are involving kids in the real world, like the grocery store, looking at and comparing prices, the weight of produce, and your families values around healthy food and why this is an important expense. Allowance can come in many forms, and some families are on board, while others do not. In our house you do not get an allowance for doing everyday help around the house, however, you may earn money for "above and beyond jobs", which are great opportunities to talk about saving for a goal/lager purchase.
Ages 11-13: Preteens are old enough to start learning more about how family finances work. You can introduce discussions about fixed expenses like rent or mortgage and explain how taxes and savings impact what’s left over after earning a pay check. This age is also a good time to let them manage their own small bank account or savings goals, helping them learn delayed gratification
Ages 14 and Up: Teenagers are ready for more open and detailed discussions about income, especially if they’re starting to think about college or getting their first job. Being transparent about your income and financial commitments, such as savings and taxes, helps them understand the bigger financial picture. This also prepares them for managing their own income in the future. So here is the time to tell them how much you make, what your expenses look like, and the real-world understanding of what it takes to be an adult who has a job, rent/mortgage, taxes, expenses, children, and thoughts of wanting to retire. Anita Bruinsma, a financial coach in Toronto discusses the importance of telling your teens why you chose the job you did, based on income, benefits, pension etc, this helps prepare your kids to think about their future careers and how it impacts the full picture.
Benefits of Transparency
Discussing your income with kids in an age-appropriate way builds trust and encourages financial literacy. It also teaches them that money is not a shame-filled topic to avoid, and thus we can end these antiquated parenting tactics. Starting young may feel strange, but as they grow older, these conversations can help them develop a healthy relationship with money and prepare them for the financial realities of adulthood. Sources: https://www.parents.com/parenting/money/family-finances/teaching-kids-about-money-an-age-by-age-guide/ https://www.apa.org/topics/money/family
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