How Much of My Financial Situation Should I Share With the Kids?
Brian asks if it's okay to tell your kids how much you make when teaching your kids about money. Dave says it depends.
QUESTION: Brian asks if it’s okay to tell your kids how much you make when teaching your kids about money. Dave says it depends.
ANSWER: It depends on how much you make and what age we’re talking about. I wouldn’t want my kindergartener to brag in class if I had an income that was more than most of the class, so I wouldn’t tell my kindergartener.
In my case, our income over the years of running this business, having big New York Times bestselling books and so forth, became ridiculous, so our children did not know our actual income until they were grown—until they were out of the house—just a few years ago, literally, because we did not want them to have the idea that somehow they had some kind of a … Number one, we didn’t want them telling people and bragging or having that Dave moment or whatever—that kind of stuff. But number two, we didn’t want them thinking they had access to it. We didn’t want any entitlement to sneak in.
I remember one time, we had an old, junky car and we finally got a decent car. You know, when you get that nice car, what you do is you go for a drive with the family, right? So we got the car and we’re going for the decent used car. It’s the first time we’d had a good car in years and years and years and years. My son’s a young guy, and he leans back in the backseat, kicks his head back in the sun, and he goes, “We’re doing pretty good, aren’t we, Dad?”
I said, “We aren’t doing anything. You’re broke. I’m doing pretty good. You’re along for the ride. You’ve got nothing.”
That’s kind of how we did it. You’ve got to keep your kids normal even if your life’s not normal. You want to keep them balanced and grounded. By that, I mean that kind of normal—not normal in debt and that kind of junk and they’re stupid. I want them to have a sense not that they’re somehow richer than everybody else even if they are and that kind of thing.
But if you have a typical income and your child is old enough emotionally to understand that and you have a similar income to your neighbors and that’s similar income to other people that they go to school with make and that kind of thing, I don’t think there’s a harm in that at all. You know, Dad makes $65,000 a year. That’s what he makes, and you’re 12 years old and you know that. That’s fine. I really wouldn’t try to get a four-year-old to figure that kind of thing out.
Number one, age appropriately, number two comes with the speech to keep your mouth shut and family business is family business, meaning we don’t talk about family business outside of the family. We don’t discuss that.
My income is not published anywhere. I’m a public figure, but it’s not a publicly traded company. There’s no way for any of you to ascertain what I make. It would just be a wild guess on your part because it’s none of your business. I’m not ashamed of it. That’s not the point. But I also don’t brag about it. And I don’t want my kids and I don’t want my company and that’s not what this deal that I do is about. It’s about helping you. The more of you I help, the more money I make. Isn’t that the oddest thing?
All of that to say we want to teach kids these principles of privacy—not paranoia—and that is based on their emotional maturity based on the age of the kid and based on the reasonableness of your income in your setting. We didn’t sit around at our kitchen table and say, “Oh, we probably make more than so-and-so who’s a country music star.” We didn’t do that. We might or might not have made more, but we don’t do those kinds of comparisons. Sharon and I don’t even have those discussions. We don’t care. We’re not comparison-type people. We didn’t want our kids to be that either.
All of those are the dangers of that, but it is good knowledge for them to have the reasonable things based on their age and their emotional maturity and their ability to keep their mouth shut from a privacy standpoint.