Why your kids should know your income

When 15-year-old Daniel Parker saw his dad spill one month's salary — about $10,000 — on the kitchen table, he thought his father had robbed a bank. Instead, Scott Parker was initiating a lesson on the value of money, according to The New York Times.

Mr. Parker gathered his six children around the table and had them watch as he separated the $1 bills into piles for taxes, mortgage payments, a tithe to the church, soccer teams and family dinners. After doling out the money to cover all of the family expenses, there wasn't much money left, according to the report. "I was trying to make as big of an impact as I could, and I definitely had their attention," Mr. Parker told The New York Times.

You don't necessarily have to hand over your tax returns to your six-year old. But giving your children an idea of how much you make, how much is allocated to groceries, electricity and other bills, as well as the cost of the children's own hobbies, schools and toys, can help them develop a healthy perspective on the value of money and the cost of living from a young age.

Money is shrouded in mystery to children. They know it is important, so they ask a lot of questions, according to the report. Why is our house smaller than my friends' houses? Why can't I have my own iPad? Why can't we go out to dinner tonight? And adults tend to flounder in their answers, often reacting defensively with, "None of your business." However, such a response inadvertently teaches children the topic of money is off limits despite its importance, according to the report.

When such questions arise, try responding with a simple, "Why do you ask?" that conveys you are happy to receive your child's query. This will also give you a moment to think of a solid answer.

It does not benefit children to shield them from the realities of financial responsibility. "It's dangerous, like not telling them about how their bodies are going to change during puberty," Amanda Rose Adams, a mother of two in Fort Collins, Colo., told The New York Times. "That's how kids come out of college $100,000 in debt with an English degree."

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