Talking to your kids about financial struggles should be done on an as-needed basis while exercising caution. You want your kids to still be kids and not have to worry about the stresses of adulthood. When parents put the weight of financial struggles on their children, it can cause them unnecessary stress and anxiety. Here are some tips for talking to your children about financial struggles.
You should discuss financial struggles with your children when their daily lives and/or habits and routines are going to be impacted.
It's important to talk to your children in a calm tone that is free from signs of anxiety or stress.
Allow your children to be children by assuring them that you are going to take care of them and protect them.
Discussing finances with kids is a great opportunity to teach them about money matters and healthy financial habits.
When you are raising a family and finances are tight, it can be difficult answering to the demands of your children. Typically, as children develop they operate from a mindset that does not understand finances, bills, or the economy, and may find themselves asking their parents to buy them everything under the sun. As a parent, it can be difficult knowing how to answer these questions all the time.
Discussing financial struggles with kids:
While it is not easy to discuss financial struggles with your children, there are ways to lessen the burden and protect their mental health. Below, I've provided tips to help you lead a healthy discussion about finances with your kids when you are having struggles.
Know when to discuss finances
Not every ebb and flow of your financial history should be discussed with your children. You are the parent, and children shouldn't have to worry about finances more than needed until they are able to start working legally and earning their own money.
However, there may be times when financial issues change the way you live your life, and under these circumstances, it is best to tell your children the reality of the situation in a way that does not cause them undue stress or anxiety about the future.
Instances when you should talk to your children about finances include the following:
- The loss of a job;
- Having to move or downsize to a smaller home;
- When you have to change your spending habits;
- When you have to make lifestyle changes.
Speak in a calm tone
When telling your children about your financial struggles, it helps to do so in a calm tone while speaking in a matter-of-fact manner. Give only facts and do not go into extreme worst-case scenarios.
For example, if you or a partner loses their job, do not tell your children that you may end up homeless. Simply tell them that the job was lost, assure them that you are looking for a new one and that you are going to take care of them, but that you may not be able to buy certain things until the new job is found.
You do not want your children to be alarmed more than need be. Only tell them what they need to know as they need to know it. Whatever is changing in their life is a good place to start.
For example, if you have to move, change schools, cannot afford to pay for extracurricular activities or certain luxury items, or need to refrain from buying certain things from the grocery store or dining at restaurants, you can tell them, but assure them that you are working to make things better. If you express any signs of stress or anxiety when speaking to your children, they will pick up on it and will likely become stressed and anxious themselves.
For children, this can be a terrifying experience, as they are not capable of caring for themselves and depend on their parents to provide for them. When they see fear or anxiety about the future in their parents, it will cause them to worry excessively about their own futures.
Pick an appropriate time and place
When discussing financial struggles with your children, it's important to pick an appropriate time and place. Do not go to their school to tell them or discuss it in front of their friends.
Pick a quiet environment, such as a room in your house, sit them down, and make sure there are no distractions before you discuss the issue with them. It's best to do this after school or an event, rather than before, so they are not going into anything with the stress of this new information hanging over their heads.
Ensure that you leave plenty of time for them to process the information and ask any questions they may have. When they do, try to answer in the most calm, factual way possible without showing any stress or uncertainty.
You want your children to have confidence in your ability as an adult to take care of the situation for them. You do not want your children to feel like they must take on the worries of adults, as this is not a situation they can help with.
Model healthy coping skills
Do not panic in front of your children in the face of financial struggles. If you feel like you may have a sad or stressed-out reaction, please be sure to react to the news away from the eyes and ears of your children. When your children see you panic or stressed, they can feel ten times as much panic and stress since this is a situation out of their control, and they look to their parents to provide for them and protect them. If they see you sweat, they are not going to feel as protected and safe.
Do not put your stress or anxiety onto your children, or allow them insight into any negative thoughts you have surrounding the situation. Allow them to be kids and to feel secure in your ability to care for and protect them. It is perfectly normal to have a negative reaction after losing a job or experiencing a financial upset, but it's best to express your feelings and emotions to a trusted friend or therapist.
Putting your feelings and emotions onto your children is an unhealthy crossing of boundaries that could technically be considered a form of abuse if taken too far. Let your kids be kids, and do not make them your therapist or confidant for adult problems. They will have to deal with the same concerns soon enough when they are adults.
Use the moment as a teaching opportunity
When talking to your children about finances, it is a great opportunity to teach them about good financial habits, such as budgeting and saving. Many people are not taught these lessons in school, so you can use this opportunity to make a lesson out of it. You can even try to make it fun by allowing kids to participate in creating budgets and thinking of creative ways to save money in their daily lives.
When children are taught healthy money management skills, they are set up to make healthier financial decisions as adults. They may even refrain from asking for expensive toys and electronics as a result in the future, but that is not a guarantee. When kids are of a legal working age, they may even think of creative ways to earn money for the things they want or to help the family, but this is not something they should feel burdened by.
It is a good practice for teens to start working to understand the value of earning a living and saving to pay for the things they want but cannot afford. This will help them have realistic ideas surrounding money and to realize that not everything in life comes easy.
Give them assurance
The most important message to relay to your kids is that despite the current struggles, everything is going to be okay and work out. There may be some time working with a tight budget and needing to save money, but you are the parent, and you are the one who is in charge of taking care of finances. Let them know this is your duty to be concerned about and that they do not need to worry, but that you will take care of them and do what is best for them.
You may even want to give them examples of times when things were difficult, but then with effort and consistency, turned around for the better. Instill in your children the reality that circumstances change, including negative ones. Reassure them that you are in charge and taking care of them and have a plan no matter how long it takes for your financial situation to turn around.
A lot has happened over the past few years economically that caused many families to experience financial struggles and uncertainty. This, paired with everything that is in the news, can truly scare children. However, if you know the best way to talk to your kids about these difficulties and uncertainties, you will be helping them develop into mature adults who are able to cope with the struggles of life in healthy ways.
- Journal of Family and Economic Issues. Families' Financial Stress & Well-Being: The Importance of the Economy and Economic Environments.
- North Carolina State University. Talking to kids about money: Study highlights importance of parents discussing financial matters with children.
- Journal of Financial Counseling and Planning. Teaching Children About Money: Prospective Parenting Ideas from Undergraduate Students.