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When it’s OK for parents to lie to kids about money

There\'s no need to jump into stock market lectures and the ins-and-outs of IRAs. Starting with a small allowance is a great tool to teach saving and budgeting. (Thinkstock)

WASHINGTON — There are times it’s OK for parents to lie to their kids, and
when conversations deal with money, it’s just fine to fib, says Marketwatch
Reporter Catey Hill.

She shared some of the times when parents should lie to kids about
money:

  • Don’t disclose inheritance

    If parents tell kids they are going to get an inheritance, it can be a
    de-motivator, Hill says.

    “Instead of saying, ‘Sure, you’re getting an inheritance.’ Say, “Maybe. Mom
    and dad are working on it. You know, if it happens, it happens. We’re maybe
    giving you an inheritance.'”

    Parents don’t need to give kids details and parents don’t need to guarantee to
    give
    them an inheritance, Hill says.

  • Don’t discuss someone else’s finances

    Children don’t need to know details about someone else’s financial situation,
    such as a family losing their home.

    “What happens is that with smaller kids, they get very nervous about these
    kinds of issues and they think, ‘Oh my gosh, is this going to happen to me?
    What’s going on?'”

    Parents should find out what their kids know and limit the other information
    they get, Hill says.

  • Don’t share too much about your finances.

    Kids don’t need to know the details of parents’ financial situation because
    kids can get more “freaked out” when they think bad things are happening, Hill
    says.

    Don’t be unrealistic and say things such as, “Money grows on trees,” but don’t
    tell kids that you may be losing the home — unless that is an immediate
    reality, Hill says.

    “Little kids — it’s hard for them to process the information, so don’t really
    say that to your kids,” she says. “Avoid talking to them about that.”

  • Lie when behavioral issues are at play.

    A time when you can flat-out lie to kids is if they have behavioral
    problems, Hill says. If a child is an addict or prone to theft, don’t let
    him know how much money is in the bank or where valuables are kept.

    “At that point, you have to protect your own financial security over your kid
    stealing from you,” she says. “That’s a dire situation, but one that plenty of
    families face.”

    Read more about Hill’s tips on Marketwatch.com.

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