From the first diaper to the last tuition bill, parents are constantly in spending mode. That's why I recommended that the woman who asked the second question take to heart her husband's concerns about having a baby. If you don't start on the same page about what you can and cannot afford, there will be constant tension in your family.

And your kids will register every ounce of that discord. Recently, while speaking to a classroom of 8-year-olds, I asked the students what their biggest money fear was. I expected to hear that they'd "just die" if they didn't get the latest video game or the most coveted new doll for their birthday. But then a shy young girl raised her hand and said, "I worry that when I get older, I'll have to support my parents. I keep hearing my mommy tell my daddy that if he doesn't stop spending money, we'll end up in the poorhouse." I was floored, but when I asked whether any of the other kids heard similar conversations at home, they all nodded.

Everyone takes parenting seriously. But while you're teaching your children moral lessons, you may fail to teach them financial lessons. Kids overhear you and your spouse arguing about money, and they feel your anxiety as you deal with the monthly expenses. Good parents are financially responsible parents. Good parents don't spend what they don't have, they save for retirement, and they teach their kids that it requires money to pay for the electricity that turns on the TV.

An effective way to help your children understand the family finances is to have them sit with you as you pay the bills. Make it fun: Allow them to write the checks. This activity will help them better comprehend why you have to leave them to go to work and make money. By talking to your children and answering their questions, you may see how out of touch they are when it comes to money; you will also see that your entire family must approach this subject together.


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