“No,” the dad says, wearily and definitively.
“Awwwwwwww! why not?” pleads the 6-year-old.
“We can’t afford that.”
With that statement, the conversation ends. The 6-year-old’s brow furrows, but he doesn’t argue back. The dad proceeds to place things in the cart, things that cost more money than the backpack…the backpack he can clearly afford.
“It’s Complicated…” Why Parents Lie About Money
Unfortunately, this isn’t an uncommon scene, and most parents admit to fibbing to their kids about their finances.
According to the annual “Parents, Kids & Money Survey” survey, 77 percent of parents lie about money and 15 percent lie about it weekly.
Unsurprisingly, 32 percent tell kids they can’t afford something when they really can... like when a kid asks for an Elmo backpack, and his dad doesn’t want to buy it.
With so many little white lies surrounding a parent-child relationship with money, how can we expect kids to grow up into financially responsible adults?
The truth is that you can’t expect kids to process the realities of money like an adult. Talking about money is a lot like talking to your kid about the birds and the bees. If your five-year-old asked you where babies come from, are you going to go into a charts-and-graphs explanation of male and female intercourse? Probably not. The same goes with money. If your house is going through foreclosure, it’s probably best to avoid of the details of the housing bubble with your child.
But if you’re facing foreclosure, do you tell your kid there’s a chance you could lose your home?
That’s a gray area for most families…
When Is It Okay To Lie About Your Finances
When does telling the truth about money hurt your kid more than it helps? When does a little white lie turn into a bigger problem?
Well, I don’t have the answer. But here are a few scenarios where parents might consider bending the truth (and how you can avoid lying in the first place):
1. Preventing the Nuclear Meltdown
You’re in the store. Your kid is begging you for something on the shelf. You’ve got a split-second decision: do you tell him he can’t have that toy simply because you won’t buy it for him? Or do you make up an excuse, and tell him that you don’t have any money for it?
Neither of those answers is perfect. But if you’re trying to avoid a toy store tantrum, you may be inclined to make up an excuse, like you can’t afford it.
How to avoid the lie: Setting the proper expectations with your kid about who pays for toys before setting foot in the store can help you avoid this situation in the first place. If you give your kid an allowance and he knows that he’s responsible for covering any spontaneous purchases, you may be able to avoid a tantrum altogether.
2. Cushioning a Harsh Financial Reality
You were just laid off from your job. You’re already behind on the mortgage, and you aren’t sure how you’re going to pay the bills at the end of the month. You look visibly worried, and your kid asks you what’s wrong. You sigh, “Nothing. Don’t worry about it.”
This is a natural reaction to a complicated and serious problem. In the survey I talked about earlier, 43 percent of parents report being dishonest about how worried they are about money.
It’s perfectly okay to spare the full details of your layoff and how worried you really are. It’s not okay to avoid the conversation.
How to avoid the lie: You owe your kids some version of the truth. Kids know when something is wrong in the house, and they certainly know when their parents are stressed about money.
Your family, including your kids, should be aware of any sacrifices the family will be expected to make because of a change in finances. Most children (both young and old) want to feel like they’re included in important family decisions, and you can still protect them from financial anxiety while letting them feel helpful. Talk to your kids about why you need to start saving money as a family, and ask your kids to brainstorm of creative money-saving solutions, like having more family nights in.
Avoid Avoiding the Truth
When you say you can’t afford something when you really can, or you bottle up your anxiety about a financial situation, you can be doing more harm than good with your kids.
If you’re trying to sugarcoat financial distress at home, you’re probably not fooling anyone – especially your kids. Lies about money now could complicate how your kid handles money as an adult. A kid with a childhood of money-related anxiety and a family who never talked about those issue openly may have financial issues as an adult.
Instead of lying to avoid a tantrum, make budgeting part of your shopping trips. Instead of dismissing an awkward or uncomfortable question, give your kid a little credit. I bet he can handle more of the truth than you think.
If you’re avoiding the truth about money with your family, you’re missing the opportunity to talk to your kids about financial priorities.
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