“Mum and Dad, how much do you actually earn?” Probably all of us have asked our parents this question at some point. And as parents, we have probably also been confronted with this question at one time or another. Most of the time it caught us unawares and hit us right in the middle of one of the biggest taboo topics in our society: not only do we not talk about money, but we also don’t ask about it.
The fear that one could sow envy among friends, acquaintances or colleagues is too great. Or even that one has to realise oneself full of frustration how much more the others earn, of course completely unjustified.
But should we really pass on or even “bequeath” this taboo thinking about finances to our children? Would it really make sense, on the one hand, to strive for modern financial education to teach our children how to handle money responsibly and, on the other hand, to tie more than seven seals around our pay slip, our “pay packet” or our income? Don’t money secrets ultimately arouse even greater curiosity? Doesn’t this secrecy work against a healthy attitude towards money, which we want to pass on to our children?
Compare and set context
When children ask their parents what they actually earn, they cannot really classify the figures that may be mentioned until they reach a certain age. Whether it’s 100, 1,000 or a million: to children, all sums somehow sound like a lot of money. So if you are asked as a mum and/or dad what you actually earn, you should first explain the word “earn” and then put the earnings into an understandable relation:
What do I get the money for?
It is exciting for children to know what mum/dad actually do for a living and what they get paid for. So explain your job to your child. What do you have to be able to do and what exactly do you have to do? How many hours do you have to work, how long/far do you have to travel and how long did you have to study/learn beforehand? Who ultimately benefits from your work and why are you paid for it? Put your work in a comparable relation to the hours your child spends in kindergarten or school. This way you create an approximate framework of proportionality that your child can use as a guide.
The salary calculator for children
Your salary in the form of a sum X is hardly tangible for your child. Put it in terms that your child knows from his or her everyday life and in terms that your child has heard before. If you have a salary of X, how much is the rent in comparison? How much do food, drink, clothes and holidays cost? Can your salary perhaps be put in relation to your child’s heart’s desire, for example a new bicycle, a smartphone or a games console?
Children’s money as a reference
Calculate in dimensions that your child understands. If you want to explain to him the relationship between the price of a new bicycle or even rent and groceries and your salary, take his pocket money as a basis. How much of it would be left over if your child were to buy a pen or a toy, or if he had to pay for food for the pet out of his pocket money?
Just as you get your salary on time every month, you should also put your child’s pocket money in the piggy bank or transfer it to the first account. This will help your child to understand the relationship between the recurring income you receive for your job on the one hand and the regular expenses that have to be paid just as punctually so that others can be paid for their work on the other.
Salary in the context of money
When your child asks you how much you earn, it is not, at least at first, to renegotiate the amount of his pocket money. No, your child wants to better understand the complex of “work”. Why do mum and dad go to work every day? What do they do there? Even the fact that adults take it for granted that they are paid for their work is not clear to children ad hoc. Only when you as parents give them extra pocket money for small household chores, for example, do they begin to understand that money is also used by adults to “reward” others for their work.
Normalize salary discussions as part of financial education
As long as parents talk about their own income in a rather nebulous way (“Enough to live on”, “Could be more”, etc.), they do not help their children to be able to divide money into orders of magnitude. How much is a lot, a little or enough money? How expensive is something? All these and other questions can best be answered when one has the income counterbalance to the expenditure. But if this figure is ultimately subject to social secrecy, children are missing an important reference figure.
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The Fintune Research team provides you relevant information on financial literacy for children. Learning about money at an early age helps to train reasonable money habits and avoid future debt traps.