It’s an indisputable truth: Many parents lie to their kids about money. In theory, we know for the most part that’s a no-no, but there are some instances where it’s acceptable to be less-than-truthful to your children about money, experts say.
Multiple surveys reveal that parents — sometimes regularly — lie to their children about money. A recent one from T. Rowe Price found that 77 percent of parents are sometimes dishonest with their kids about money, with 15 percent of them admitting to not telling the truth about money to kids at least weekly. And a survey released in August of 500 moms from online shoe retailer ShoeBuy.com revealed that one in four say they’ve lied to their children in order to avoid purchasing an item that was on their kids’ wish lists.
But some of the lies parents tell can have serious consequences. One common lie, which 43 percent of parents commit, according to T. Rowe Price’s survey, is they don’t reveal how worried they are about money. Another common lie is telling kids they can’t afford something that they really can afford (about one in three parents do this), according to T. Rowe Price. Parents also lie about issues surrounding inheritance, budgeting, being able to afford college and more.
In general, lying to your kids about money is wrong, experts say — even if it is easy to do in the moment (and can help you avoid having to buy something your child doesn’t need or even really want). “It’s helpful in the short-term, but not in the long-term,” says psychologist Elizabeth Lombardo, author of “Better Than Perfect.” Or, as Syble Soloman, the creator of Money Habitudes, a program that helps people learn to talk about money, puts it: “Lying and pretending rarely have good long-term consequences.”
But there are times when lying, or at least not telling your kids the whole truth, may be warranted. “So much depends on the child’s age, maturity and personality,” says Soloman — so take that into account before you avoid the truth. Here are four instances when it may be OK to be less than truthful — or at least omit some key facts.
When Your Child Will Inherit a lot of Money
When parents plan to leave a large inheritance to a child, Soloman says that it may be appropriate to not tell the child this or lie about it because knowing can create a sense of entitlement, take away the joy of paying one’s own way, remove the intrinsic reward for working and saving toward a goal and create a sense of being independent that may interfere with the parent/child relationship.
“You don’t want to do something that will prevent the child from working their hardest or achieving their personal best,” says Samantha Ettus, a work-life expert and author of The Expert’s Guidebook series. “It’s acceptable to wait until they are an adult [to tell them].” If they ask about inheritance when they are younger, Ettus says you can say something like, “maybe you will [get an inheritance] — we hope so and we are working hard to make that happen.”
When Discussing Someone Else’s Financial Situation
With respect to other people’s financial situations, you may want to omit some of the facts — or seriously downplay the extent of the problem — in two instances, says Soloman: 1) when knowing how much money someone else has might change the child’s behavior toward the person; and 2) when a child may share information that would embarrass a close friend or relative who is going through a rough financial time and prefers to keep it a secret.
If a child specifically asks about the person’s financial situation, Ettus says you should first find out what they already know so that you aren’t sharing any additional details with them, and then tell “an age-appropriate truth” so that a young child isn’t terrified that what’s happening to another family (like losing a home, for example) could also happen to them.
When Your Financial Situation is Dire
While you shouldn’t outright lie about the fact that you have money problems, Lombardo says that young children needn’t know all the gory details of what’s going on. “The information needs to be age appropriate,” she says. So, while you might be afraid you’re going to lose your home or become homeless, don’t terrify them unnecessarily with this information. Say: ‘right now, we don’t have as much money as in the past,’” she says — which is true, but not the full truth. Then give them something to do that they think can help (like ask them to make lunch each day instead of buy it at school) so they don’t feel helpless, she advises.
If Your Child is an Addict or Has Serious Behavioral Problems
“If the truth will enable destructive behaviors, lying may be a wise strategy,” says Soloman. “Examples would include a child with addictions, impulsive behaviors or a need to be accepted that results in indiscriminate giving to others.” Ettus agrees that it may be appropriate to not tell the truth in dire situations like a child with addiction, if in doing so you are protecting yourself financially. “If it [the situation with your child] is jeopardizing your own financial safety, it is OK not to tell the truth,” she says. So, for example, if a child is an addict and might steal from you, it’s OK to lie about owning certain items.
Catey Hill covers personal finance and travel for MarketWatch in New York. Follow her on Twitter @CateyHill. This article originally appeared on MarketWatch.com and is reprinted by permission from Marketwatch.com, ©2014 Dow Jones & Co. Inc. All rights reserved.