It’s no secret that many parents have an uncomfortable relationship with money. Whether there’s too little to go around, too much reliance on credit, or too many jobs required to make ends meet, money is the Number One issue young couples wrestle with. If we could, we would save our children from struggling with money in their own adult lives. How do we do that?

Well, naturally, we give them information we wish we’d had, things we’ve learned from hard experience. But studies show that parents don’t tell children everything. They leave some parts of the household economy out of their conversations with kids. And those missing pieces are the very ones children need to absorb if they’re going to have a sensible idea of how money works.

Researchers at North Carolina State University and University of Texas interviewed 136 children aged 8 to 17. The average age of the kids was 10½ . They found that, according to these children, parents were most likely to have talked with children about saving money, spending wisely, and ways to earn money. Think of this as conversations about doing chores for cash and putting some away in a kid-savers account, and arguments in Target over what the child should buy or not buy with the crumpled up bills in his pocket. Sounds pretty normal, right?

But some aspects of money management were missing. Children reported that while they had been taught how to manage their own allowances, parents had told them nothing about family finances, how much their parents earn, how their parents save or invest their money, or the sort of debt parents have. These larger issues expenditures and income were completely absent from children’s financial educations.

I understand why. Most parents might quail at the thought of sharing with their children how much income the household makes. They might shield children from realities of debt and credit issues. But by hiding this information from kids, parents set their children up. When these kids become young adults, with money of their own, they have no idea how to adhere to a budget, limit use of credit, avoid late fees, borrow money and make plans to pay it back, file taxes, and stay out of financial trouble.

In addition, the study found a difference in what parents tell boys compared to what they tell girls. Although few children reported much conversation about debt or investments, boys were significantly more likely to have been told about these areas of money management than were girls. Obviously, this difference makes no sense. Gone are the days when women can delegate all their financial business to a man.

So what to do? Lead researcher Lynsey Romo says, “even young kids are aware of financial issues, regardless of whether parents talk with them about money. And if parents aren’t talking with their kids about subjects like family finances or debt, the kids are drawing their own conclusions — which may not be accurate.” Just as in talking about sex or religion, one doesn’t sit a child down for a long lecture and think you’re done. In talking about how money works, little bits of information, delivered as things come up, is the way to go.

1. Let your kids see you pay bills. Many children don’t realize that their parents are paying for the house, the car, heat, lights, cable TV and the Internet. The extent of a family’s fixed expenses – things that have to be paid for every month – is a black box for most children. By age 10 – the average age of children in the study – kids should understand that their comfort costs money.
2. Let your kids in on your budget. You don’t have to disclose numbers, if you don’t want to. There’s no need to name the actual monthly income amount. Use a pie chart if you like: here’s a picture of all the money we have coming in this month and here’s the slice set aside for this and that fixed expense, and here’s the slice left over for fun.
3. Make obvious the ways you set money aside. If money is taken out of your check before taxes for savings or investments, talk about that, especially with older kids. If you set money aside from your monthly budget, make that action explicit. Children are more likely to save their money if they know you do too.
4. Budget money for charity and tell your children that you do. Have a family discussion about what charities to support and how much money can be shared. If there’s no money for charity this month, talk about ways to volunteer instead.
5. Talk about taxes. Police and fire protection, libraries and schools, roads and Fourth of July parades are all funded by various tax contributions. These things, like groceries and gasoline, children may take for granted. Clue them in to the fact that money makes the community work too, just as it makes the family economy run smoothly.

It’s time to bring money out of hiding. Give your children the tools they need for the future. Talk about money now.

© 2014, Patricia Nan Anderson. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Join Dr. Anderson in an online conference for teachers and parents. Find out more at Quality Conference for Early Childhood Leaders.