(Minneapolis) – From the time they are old enough to start talking, two of the most common words to come out of the mouths of babes are “no” and “why?” For children whose families have wealth, it isn’t long before the sentence, “Mommy, are we rich?” is uttered as well.
How would you answer that question? Barbara R. Hauser, a family advisor from Minneapolis who works with wealthy clients throughout the world, says it’s important to start the conversation early.
“As soon as the questions start coming, parents need to provide answers,” said Hauser. “When a topic is ‘forbidden’ it scares and confuses children, which results in their having emotional issues around money.”
But what exactly should you tell a 5-year-old about the family fortune? Hauser and fellow financial advisor Suzy Peterfriend of South Florida have co-authored a book on the subject. The expanded edition of Mommy Are We Rich? Talking with Children About Family Money, was just released at the end of 2014.
In this edition, the authors continue the conversation to include children who are 12 and 20. The first edition of the book was aimed at families with five year olds.
“Many parents have asked me (and others) at what age should I tell my child about the money? This sounds like a one-time event. Instead it should be on going, for many years. It is for that reason that we expanded the book,” said Hauser.
In the expanded version of Mommy Are We Rich? Hauser and Peterfriend explain how to answer such questions as what is money, where is comes from and how to manage childrens’ expectations about it. There are also chapters offering advice on what to say when kids ask for something they really don’t need, but think they are entitled to because their parents have the money to pay for it.
“Talking about your values as a family is a great road map for children to learn about boundaries,” said Peterfriend, who added that parents should always answer their children’s questions matter-of-factly and build on what has been discussed previously. “It will make more sense to them if you can work on what they already know and just keep the subject about money unintimidating.”
Because the authors have worked extensively with international clients they have shared some global nuances about money throughout the book. In each chapter, they explain how the topics covered are dealt with by Asian, Latin and Gulf families.
“When it comes to talking about money, remember, age doesn’t matter. Answering in an age appropriate manner does,” said Peterfriend. “My granddaughter was curious about how much I spent on clothes, food, cars, etc. I asked why it was important to her. Turns out she wondered how much money you needed to have to be a parent. I thought that was a great place to start!”
Copies of both editions of Mommy Are We Rich? Talking to Children About Family Money, are available on Amazon.com. The first edition retails for $12. The second edition retails for $15. The kindle edition retails for $6.99. For more information, visit www.mommyarewerich.com.