Brian Parker of EP Wealth Advisors recently wrote a great article in The Street, and I can't help but jot down a few of my own thoughts. Parker lists a slew of topics parents would rather discuss than money:
In our capitalistic world, you would think money is an openly discussed topic among families. Instead, it's actually one of the most taboo dinner table topics, even over seemingly touchier subjects like politics, religion, sex, taxes or death.
May I submit several other subjects that parents would probably rather discuss than money: laundry, date night, doorstops, the plague, New Kids on the Block, banjos, or toenail clippings. Need I go on?
However, as Parker asks, "why is this the case?" I've mused about the question as it pertains to parents' entrenched desire to sooner discuss sex than money, and I think I've got the answer. I'm sure Parker is right, at least in part, when he says that it's because parents feel they don't know enough. But I think there's another psychological factor that gets in the way: ego.
Hopefully without being crude, let's compare ego's impact on the two topics of sex and money.
With sex, the topic may be a little uncomfortable because of the level of intimacy involved. Despite such a level, the parents have very little to prove in terms of knowledge. They've got it all figured out. What's the evidence of that claim? The child! "You're here; therefore, I'm an authority."
It usually won't occur to the child to question their parents' mastery over the subject matter. Neither is there any desire to know whether their parents are any more talented than other parents. Sex is a matter of simple instruction. "First, you do A, then B, and then you get C. If you want to avoid D, try E and F. G may be a proper solution if you actually want C." You see? Simple! And the child is none the wiser as to whether you're the steed you think you are.
Money's a different animal altogether. Yes, the instructions for how to make it are more complex, but there's nothing about those instructions that make us squirm any more than the question "Where do babies come from?"
The real discomfort with money is not in the complexity or the knowledge but in the level of performance you're capable of attaining to. You cannot hide your money-making acumen from you child. He or she knows how big of an authority you are on the topic and will question you aggressively on the topic—or so you fear. Therefore, it's natural that parents would rather not discuss the matter and hope that their children will become far more superior in their understanding than their moms and dads, preferably with the help of external aids such as college and internships. Never mind that those aids weren't a panacea for the parents.
So, parents, time to put the egos aside. Love your children in a way that your gazillionaire neighbor never could—something your chidlren need much more than money—and join us on our own adventure in teaching children financial freedom.