I'm currently reading How To Raise Financially Fit Kids.
It's made me think about something.
When our daughter is older, how much do we tell her about our bankruptcy?
She won't know any different, being 2, but eventually the topic might come up.
Should it be part of her financial education? I believe, wholeheartedly, that the only purpose of an allowance is to teach her about money. It's not a reward, a bribe, or something she deserves. It's a teaching tool.
I want her to be much more financially literate than I was.
It's odd, really. I can see how my parents would have assumed that I was financially literate. After all, I've had a job since I was 14 years old. I was excellent at saving money for things I really wanted even when I was only 6. (I paid cash for a Gameboy, $99 back in the mid-80's, that I had saved up all by myself.)
I knew how to balance a checkbook. I knew how to put money in my savings account.
But what I didn't know was how to use credit.
I also didn't know about compound interest. I would like to have learned about that long ago and used it to my advantage rather than becoming a victim of it.
(Sidenote: A salesperson I used to work for once tried to explain compound interest to me when I was 20 in relation to retirement savings. I nodded and let my eyes glaze over as I wondered how many highlighters one man really needed. Why didn't I pay attention? Grr.)
I don't blame my parents. I'm just not surprised that I ended up in a situation very similar to where my father was before he died. (The same situation that led him and my mother to bankruptcy.)
I'm agreeing with the concept list in HTRFFK. It's a nice idea for various targets and goals to cover with kids. The book also suggests ways to do this for different ages. I'm going to make my own list.
Back to the topic at hand, however. Do I tell her about the bankruptcy?
I believe in being honest with kids. I want her to know that there are consequences to abusing credit and not being realistic about your situation. I want her to see that people can recover from the bottom of the barrel financially. I want her to know that mommy and daddy can admit they made a mistake and ask for help. That a strong marriage makes it through the toughest of times by supporting each other rather than turning against each other.
I don't want her to throw it in our faces, spread the word around to her friends (and their parents) or otherwise abuse the knowledge like most teenagers are wont to do.
Of course, no one says we have to tell her as a teenager.
Hmm. Would you tell your children about your bankruptcy?