<p>I am asking because I am truly confused as to my family's financial situation.
Last semester I was admitted into an expensive university without aid - so expensive that I was thinking of taking a year off (my sister would have graduated by then, easing the financial situation). But my parents told me to take out a loan to pay for our first semester.</p>
<p>So come next semester, my dad sends almost 40k, for the loan and the coming semester's tuition. I inquire about this and he just tells me to not worry and focus on my academics. He also tells me not to worry about next year's expenses.</p>
<p>Now I am truly confused as to what is going on. I have asked countless times but my dad is so secretive with his finances that my mom does not even no. </p>
<p>Do you think its fair of me to demand to know what is going on (like he may be borrowing from the mob or something), or just let it be? How much do you tell your kids about your financial situation?</p>
<p>If your dad can just cough up 40K, then your family's situation is a rarity and you need to respect their privacy and just focus on doing as well as you can academically. </p>
<p>By now you should have a few clues: what do your parents do for a living? Do they live modestly? (still live in the same house they bought when you were little, drive sensible and not new/flashy cars, don't have a second home, etc.) If they own a business, go read "The Millionaire Next Door" and see if the shoe fits.</p>
<p>If you got in without aid, then chances are your parents have the means to pay your way. If they choose to do so then count your blessings, work your butt off to justify their investment, and appreciate the fact that they are sending you off into the world debt free or nearly so. Later if it turns out the mortgaged the family farm to send you to Harvard you can support them in their retirement! (g)</p>
<p>The house they live in is modest, and so is the car. My dad does own his business (as a broker buying machines and selling them), but he evades most questions about his work and I have no idea how much he makes. </p>
<p>The thing about aid is, I am an international student so they may have not given me aid despite my need.</p>
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Do you think its fair of me to demand to know what is going on (like he may be borrowing from the mob or something), or just let it be? How much do you tell your kids about your financial situation?
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good question ... each set of parents will decide how much they share of their financial situation with their kids and I do not think parents owe their children details about their financial situation (personally we share a lot of this info because we think it helps educate our kids about finances and financial choices). </p>
<p>What I do think parents owe their kids is a complete open answer about the the parents ability / willingness / plan to pay for college ... I believe you should know how much your parents are willing to play and how much you are on the hook for.</p>
<p>A few months ago, I sat down with my dad and asked him exactly how much he and my mom would be able to pay for college, and how much I'd have to come up with through financial aid. I chose the straightforward approach because although I knew we'd need financial aid I didn't know how much, and not knowing made me anxious about the whole process. I now know my parents' combined income before and after taxes, and how much they can reasonably afford per year. I still worry, but at least it's a concrete, tangible sort of worry ("I need at least $20,000/year in grants for this to be feasible") instead of just a vague sense of impending doom ("This is never going to work"). I don't know if that makes me a realist or a huge control freak. :o</p>
<p>... and then you get my family dynamic: divorced parents, neither wants the other to know how much they make, so when it comes time to file for financial aid, they both hand <em>me</em>, the 19-year-old, their tax returns, and expect me to deal with it by myself.</p>
<p>We have taught our children that we are NOT a bottomless pit of money and we do not have a money machine in the basement. We have also set reasonable limits to the amounts of money we give them for EVERYTHING, including college expenses. They also know what we expect them to contribute. Do they know every penny we spend...no. BUT both sat here while <em>I</em> helped them with the FAFSA and Profile (after all...it was THEIR signature that had to go on them), so they know something.</p>
<p>This is a tough one, that, I think, is totally dependent on family dynamics and the student doing the asking.</p>
<p>Students should realize that income and assets, especially savings, are among the most personal things we adults deal with. For example, in my circles, it is considered very poor form to ask another what they make. Knowledge of what co-workers make can be mentally suicidal.</p>
<p>We parents, who have tried to shield our kids from too much worry about financial issues, also worry that our kids may not fully understand the information, such as how much maintaining a household really cost. (I, too, and constantly amazed at what the outgo is..)</p>
<p>Nonetheless, because of some pending family financial issues, my own D recently became concerned about college costs, wondering if the family money well was deep enough for the next few years. I opened the books so to speak (a lot easier to do, and more convincing, with on-line accounts!), to reassure her. Turns out she did not want an in depth look, only to see that there was enough.</p>
<p>My mother is actually much more open about our financial situation than I am. Last weekend, at a dinner party, she confessed to a virtual stranger--a wealthy lawyer's wife--that she worried about financial aid and that money would play an enormous role in my college decision. When I suggested that we change the subject ("Mom, can we not talk about this over dinner?") she was offended. Later, she told me that the woman she was talking to didn't think I was being "realistic" about our financial situation. That actually upset me, because I've done much more research than my mother, who knows very little about the American system (we are European) but sensationalizes everything to gain the sympathy of strangers. Was I wrong to think my mother acted inappropriately?
Students should realize that income and assets, especially savings, are among the most personal things we adults deal with. For example, in my circles, it is considered very poor form to ask another what they make.
<p>My kids know a LOT about our finances. When my husband was diagnosed with lymphoma (seven years ago! hooray for new treatments!), one of their very early questions was whether we'd still be able to afford college. They hated every single minute of it, but I sat down with them and went over every detail of our assets and debits. I've reviewed it periodically with them (I call it the "plane crash scenario" as in "if we die in a plane crash on this trip, I want you two to know what's going on") since then. To my knowledge, they've never discussed the information outside our family.</p>
<p>I have noticed, however, that they're much more aware than most of their friends about what "big things" (like cars and houses) cost to purchase, maintain, and insure, perhaps because of these discussions.</p>
<p>My kids don't know anything about our family finances. They know they have never missed a meal, but nothing beyond that. It's just none of their business, nor anyone else's they might blab or leak it to.</p>
<p>I was, however, really clear with each of them from day 1 that I would pay the COA at our state flagship and that's it. They are on their own for any extra expense of a designer education. And 2 of 3 so far have done the designer thing with merit awards, loans and work-study. #3 still in HS plans to do the same.</p>
<p>Our son is kept generally aware of our finances, but we do not share details. We have invested for his college since before he was born, so we have money set aside for college and grad school. We have told him that money should not be a factor in his college decision, as we want him to focus on the academics and environments that he wants. By the same token, we encourage him to excel and take advantage of scholarship opportunities where they appear. We don't want him struggling with 50 scholarship applications and essays, however.</p>
<p>On the personal expenses side, we have tried to be instructive through high school on matters of budgeting, fiscal responsibility, etc. He does not work, as his classes, band, scouts, tutoring and community service work keep him extremely busy, and we want him to experience those opportunities. He does housesit for people on occasion, pays his own gas and car expenses, and takes care of his incidentals. As long as he continues to show fiscal responsibility, we are happy to assist. So far, so good.</p>
<p>Our son does know where our important papers, such as life insurance policies, living wills, wills, etc. are located, and we have shown him how to contact our bank and investment advisor in the event something should happen to us. We do not share details of salaries, investments, etc., but keep him in the loop at a high level.</p>
<p>Our kids know about our finances only because we had to go through the fafsa and profile with them, and just recently loan applications. We told them at the very beginning of the college search what the bottom line was for us to pay for colleges and looked for colleges with different price ranges. I very much steered them away from colleges that I knew had high tuition/low merit and/or financial aid and stats that were unattainable. Like dt123, they made the final choice about where they wanted to go knowing that costs over a certain amount were up to them to pay back.</p>
<p>Our kids are on a need to know basis. Up until say about 10th - 11th grade, their need to know revolved around the importance of teaching them that money doesn't grow on trees, and not giving them every last thing that they wanted. When my daughter, now a college freshman, was about 12-13, I overheard her and younger bro discussing the fact that we were "poor", mostly because we don't have many of the outward trappings of money. Their school's tuition is even now only about $7000/year, so that the wealth of the students varies greatly for a private school - some families spend more on gas for the boat each year, others sacrifice to make the tuition.</p>
<p>We are gradually telling them more, because their need to know is greater, as is their need for general financial knowledge. Dmd's and OhioGolfer's points are well taken, and I will discuss them with my husband particularly in regards to my oldest, who would have some responsibility for her younger bro in the plane crash scenario - he would eventually go to an aunt. I am going to buy her a copy of the Millionaire Next Door - all young people should read that book.</p>
<p>I don't think any of us can over emphasize how important it is for parents to explore college finances early, learn how they work, figure out what will be best for your family and what you can afford, and strategize those finances with your child EARLY, before serious searching starts - they don't need all the details, they just need to know what you can afford, what they will need to pay, and how that will affect their application strategy.</p>
<p>Those of you who don't want your children to know the details of family finances, why not? I notice multiple parents saying "it's not their business," but why isn't it? I want my children to understand how to manage money, not have to learn it on their own, and what better way than to help me with tax returns, analyzing stocks, figuring out how to keep gas/electricity/water bills down, comparing mortgage options, coming with me to negotiate a car purchase....</p>
<p>My D just had to file her first tax return, based on earning over the limit for non-filers on her campus job. It was the simplest of the returns, the 1040-EZ. Based on a couple of her questions and some other things, one of the things we're going to do this summer is spend an hour going through our [TheMom's and mine] joint tax returns, including Schedule C's. </p>
<p>Enlightened self-interest on my part: she needs to have some idea about navigating this stuff in the future. And I hope she walks away with a more complete understanding of just how much !@#$%^&*! a pain in the rear and time commitment doing her financial aid paperwork is.</p>
<p>NMD makes a good point about discussing finances being generally taboo. TheMom grew up in a household where income, expenses, etc. were <em>never</em> discussed and felt handicapped because of it through her early adult life. My background was dysfunctional but equally opaque. It took us a few years to cobble together a healthy and workable approach to dealing with finances and financial information.</p>
<p>I think we've imparted to D a far more prudent set of financial principles than either one of use ever received. Yet, similar to NMD's account, there are times where D displays astonishing holes in her understanding of household economics and that's <em>despite</em> all the fairly transparent dinner table conversations. </p>
<p>I think that dealing with real numbers, indicating choices you've made and pros and cons, is a good way to educate one's offspring. Certainly different levels of information are appropriate at age 20 than at 16 or 12. And a sense of confidentiality and financial "manners" is one of the first things to teach, though I think a lot of that is picked up by example.</p>
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Those of you who don't want your children to know the details of family finances, why not?
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<p>Because we make a lot of money, but we came from much more modest backgrounds where we grew up acutely aware of the value of money, and especially in my husband's case knew what it was like to not quite have as much to eat as you wanted.
Our children are growing up surrounded by privilege, kids who literally have millions and others, as I said, who are struggling. There are a lot of "big hat, no cattle" types at their school, too, and it is easier for a 10 year old to think his family is "ordinary" or "poor", than to explain why we don't have a beach house when Mama makes about the same as Johnny's Dad.
Our values are very different, too, we give heavily to our church, and spend lots on travel and education - not good for our long term financial goals, but what we strongly feel is right for us.</p>
<p>Finally, we have only our salaries to rely on, and while we have slowly built up assets, we started literally with nothing but an education, and our love of travel, education, wine and tithing AND lack of a real estate killing, has left us much better off than the huge majority of Americans, but still feeling very middle class.</p>
<p>We are beginning to talk finances more specifically with them as they get older, but still somewhat as a need to know.</p>
<p>One reason we've tried to keep our children somewhat in the dark about our financial situation is to make it easier on them when people ask them incredibly nosy questions. I've been amazed at the number of kids who've asked my D how much financial aid she got, how she's going to pay for college, etc. My D is honest almost to a fault and feels really guilty for lying in such situations, so I think it's easier on her to be able to say honestly that she doesn't know but that her parents are on top of it and then to change the subject. </p>
<p>My kids are figuring out that we're probably better off than our lifestyle suggests. We've explained some things so that they understand why we can send them to private colleges when families who live in homes worth 5 times ours say they can't afford to. The kids of those other families hear their parents say they can't afford it and see that we drive older cars and live in a more modest home than they do, and I think they infer from that that we must be struggling financially. But I feel better just explaining things to my kids in general terms about how families make choices and not giving them specific income and asset figures.</p>