Talking to Your Kids About Financial Difficulties – Part 1

Listen to any news outlet or scroll the headlines on your phone – or just take a look at your bank statement – and it’s evident that finances are tough these days. The crunch has affected many major companies, small businesses, banking institutions, manufacturers, and individual households. And if you’re feeling the pressure, you can be sure your children are feeling it, too. 

As a parent, one of your primary roles is to educate your children about how to live in the real world, and money management and problems are about as “real” as it gets. Here are some principles to consider as you enter this vital discussion with your family.

Times Have Changed – It’s Not Your Parents’ World Anymore

Many of today’s parents were raised in homes where discussion of money was “taboo.” Some of us were told that the family finances were none of our business and some were “protected” from harsh reality during childhood. But our culture has changed, and it’s now okay to talk about money. 

Parents today embrace a philosophy of more communication with children, partly because of an overall openness, and partly because they can’t avoid it. Information is everywhere and it is nearly impossible to shelter children from the headlines anymore. Since our kids are bombarded with information, as parents we have a responsibility to filter and clarify it for them. If they don’t understand what’s going on, they’re likely to become distressed or anxious about whether they, personally, have any control or whether they will be safe and secure.

Why We Need to Talk to Our Kids about Finances

Security and stability are essential to a child’s sense of well-being. Yes, we live in ever-changing times and, children adapt. But parents must convey to their children that there are some things they can count on: We will always love you. We will always do our best to protect you. We will always make family decisions based on what’s best for all of us. Of course, those promises need to go beyond words to consistent action, and when your children see you living out these promises, they are more likely to remain hopeful and cooperative when the family must weather financial storms.

Children are an important part of the family and deserve consideration when changes occur, or bad things happen. They can sense when things aren’t “right” or something is different. Since children tend to personalize events in their lives, they often feel that somehow, they must be the cause of the stress or unhappiness they see in their parents. They may bottle up their fears to “not cause any more trouble” and become little carriers of anxiety. If kids are kept in the dark (even if the intent is to protect them), their fertile young imaginations often magnify problems, which only makes matters worse and may result in acting out in inappropriate behavior or suffering silently. 

The best way to “protect” your children from the reality of financial problems is to help them understand what is happening and give them opportunity to be part of the solution. Financial struggles can also lay the groundwork for teaching your children money management and values.

Join me next time and we will talk about some specific things you can do to reassure your children when times are tough and set an example of how to handle financial hardship as a family.

Live, Work and Relate Well!

Dr. Todd