In the car to get a present for a birthday party, my middle daughter asked how much our house was worth.
So, I told her.
I know from my decade-plus as the Wealth Matters columnist at The New York Times that this will come as a shock to many parents who keep their personal finances secret from their children. The richest among us often worry that if their children knew how much money they had they wouldn’t have any ambition.
Keeping money secret from kids is foolish. My wife and I have always believed in honesty with context when it comes to money. And we talk about the good and the bad – the necessary decisions and the fun ones plus the mistakes we’ve made.
The foundation for these conversations is our three daughters knowing that my wife has always earned more than me. They know we both work hard, but it’s important they know that she earns more and that it in no way bothers me. They see us make decisions together. They also understand why I was the one who arranged his schedule to be a Lead Dad even before starting The Company of Dads.
But that’s macro. There are many micro moments in a week. Children are comparative machines. Why is that person’s house bigger/smaller than ours? Why do they get to go to Disney/Turks & Caicos/Cape Cod/Paris? Why do they have a newer/older car than us? Why do they get to drink Coca-Cola and we don’t? (That last one is actually the easiest to answer!)
The biggest reason we’ve been open to them about money is we knew there would come a day – like yesterday – when after I told my 11-year-old the value of our house, she would pull out her phone and tell me exactly what Zillow’s Zestimate of our home was – to the dollar!
(The context of the conversation was whether our house was less expensive than Elon Musk’s house. I assured it was a LOT less expensive!)
When she saw our house’s value right there on her iPhone, what was her reaction? That we were rich or poor? That she was going to be a hedge fund manager or a beachside lay-about?
Nah. She said we needed to update the photos on Zillow! The previous owner’s taste in couches were nothing like the ones we had!
Money is a number whose meaning is in our head. When I would give talks about my book, The Thin Green Line, I always asked if someone would feel rich if they had $10 million. I’d then follow it up by saying if that person was a teacher and had saved and invested well, then for sure. If that person had started with $100 million and was down to $10 million, probably not.
Context is everything. And you can only give your children context through conversation.
One last bit: If you’re weird about money, your children are watching and they’re going to be weird about it too!