Should People Know Details of Their Parents’ Finances?

by TTMK on April 15, 2013 · 11 comments

Money is a topic that can be very private for a lot of people.  Now, I do love to discuss money in general though!  I’m sure that’s beyond obvious 🙂 At the same time, I don’t like to share exact details of my own personal situation, in terms of specific numbers.  Most people tend to be the same way, including most fellow personal finance bloggers.

But when it comes to parents and their grown kids, is total privacy necessary? Is it even a good idea?

I recall talking to one of my friends years ago, discussing his financial situation at the time.  He was hoping to get a little bit of help from his Dad in short-term pinch he was in.  He broached the topic in what turned out to be a very wrong way: by asking his Dad how much money he made.

His Dad’s immediate response: “That’s none of your business!”.

Personally, I never really had the guts to ask my parents about financial specifics when younger.  I tried to ask in a roundabout way a few times, and my Dad deftly avoided the topic.  Which is fine, because I do think that some things are personal.

This being said, as everyone gets older, it might be a good idea for parents to discuss their finances with their grown kids.  At the very least, it’s important to have an in case of death file, and let the kids know of its existence.  It can only benefit them, not to mention the surviving spouse of course.  It’s important to keep in mind how much those people mean to us, and how we want them to be able to get through tough situations and protect family assets.

Beyond this, I think it’s important to be clear with kids in terms of what burden you might be putting them through.  If parents don’t have assets, and then grow very old without any ability to survive financially, who will end up helping out?  Yes, the kids.  The same kids who they may not have wanted to know any details about their finances.  Now, the topic of financial supporting parents or in-laws is one that people have many opinions on, but if elders are truly in dire straits, you know you would help out.

On the other hand, I also think that if grown kids think that they will get an inheritance, it might get them to be lazy.  They might not work as hard, and could just bank on a windfall – even if modest.   Not everyone wants their grown kids to be lazy and sit back counting on living off other people’s money.  So, that’s one reason not to discuss finances with them – at least, when they’re younger.  Maybe it’s all a matter of timing.

I’m curious what you think.

My Questions for You

Do you think that there is a right time for parents to share details of their finances with grown kids?

How has your family approached this?

{ 11 comments… read them below or add one }

Jeroen Jonk April 15, 2013 at 12:58 pm

I believe it is essential to be open and honest about financial matters. Especially with regards to inheritance I feel it is important to discuss what parents decide to do. This allows discussion to take place between parents and children and avoids any misunderstanding after parents passed away and children need to find out for themselves how to deal with it.

I also believe it is part of proper parenting, even if sons and daughters have become adult, to keep on trying to guide them through life, including finances. Especially young adults will not always accept advice straight away, but hopefully something will stick anyway and they could benefit from that knowledge.

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TTMK April 16, 2013 at 11:51 pm

Good point on inhertiance issues. As for advice sticking, I’m sure I got a ton of it, but there have been some things said that stuck moreso than others. Maybe not always the most important stuff, though in a few cases I think it’s the case. Anyway, it’s good to at least consider the advice of those older and more experienced.

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David S April 15, 2013 at 6:16 pm

I would say that I broke the ice when I mentioned a few tax breaks they could possibly take, they latter had me look over their taxes. After that financial matters (our own and theirs) became a semi-comfortable topic to talk about in daily conversation. With my children (all under 6 years old) I try to be as open as I can about everything.

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TTMK April 16, 2013 at 11:49 pm

Funny how sometimes it just takes breaking the ice. I think there can be real value to sharing, though I know I won’t get some information from my father. Which is fine.

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Emily @ evolvingPF April 15, 2013 at 8:14 pm

I wish I knew less about my parents’ finances, or that they were doing better. I worry about them! When I was a kid they told us NOTHING but they became more open when I got into PF and budgeting and such post-college. But they don’t seem to take my suggestions so I don’t offer them much anymore.

I think my parents and my siblings and I just want to keep our heads in our sands regarding their inevitable demise! Maybe we will get our acts together when their health declines.

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TTMK April 16, 2013 at 11:48 pm

Money can be touchy and a subject to avoid for many families. We all have to manage our approach differently, as the dynamics are different for all of us.

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American Debt Project April 19, 2013 at 10:25 pm

I hear ya Emily! I don’t wish I knew less, I just wish I could see the situation improve. I hate to think of my parents dealing with money stress, having gone through it so endlessly for the last few years and finally changing my ways, I just want to help out. But I can’t help out much until I’ve gotten my own situation going. So in the meantime, I just hope they don’t overspend and get into any more debt.

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Christian L. April 16, 2013 at 1:28 pm

My dad wanted me to grow up and be responsible with my money. So he first encouraged me to get a job as soon as I could (in high school). Then he told me how to manage money, all the while reminding me that it’s called currency because it comes and goes.

He was transparent with my parents’ money. His childhood was not luxurious, so I think he was proud to talk about his successes with his family. But he also talked me through how he managed money by using actual figures. I’m more grateful for his knowledge than I ever thought I’d be.

-Christian L. @ Smart Military Money

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TTMK April 16, 2013 at 11:47 pm

It’s funny how that works, about being more grateful for Dad’s knowledge than we ever imagined. I know I am too.

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Edward Antrobus April 16, 2013 at 2:36 pm

I was once told that parents telling their children about their money problems was a form of child abuse since they shouldn’t have to worry about that stuff. I got into a pretty heated argument about that because I believe that hiding reality from your children doesn’t help them in the slightest. Personally, I was well aware of my parents finances because my mother has numerical dyslexia and needed my help to balance the check book.

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TTMK April 16, 2013 at 11:22 pm

Sometimes reality can be better than living in a cocoon!

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