How to talk to your children about your financial problems is one of the most difficult issues any parent could face. Professionals and parents have different takes on this dilemma, and some parental advice forums even suggest that children should know as little as possible.
I have always been of the opinion that not discussing money with children is one of society’s biggest flaws. We are constantly pushing the boundaries when it comes to talking to kids about various important aspects like sex education and health issues, but somehow the topic of money is always left behind.
Perhaps my conviction that children should be included in their family’s conversation about money stems from my own childhood. Every Sunday evening my parents would sit me down with my siblings and we would have what we called Huisberaad (roughly translated, House Conference). Our weekly Huisberaad was an opportunity for all family members to talk about what was happening in their lives, discuss their achievements of the week and what they would like to have in their lunchboxes. The family budget was often included in this weekly family get-together.
Talking about money with your children is one thing, but talking about the lack thereof is a daunting beast of its own that most parents prefer to avoid at all cost.
While the solution to this financial question depends on a million factors unique to your situation and your family dynamics, we have compiled a list of general suggestions that might help to guide you in the right direction.
1. Your children are smarter than you think
According to a 2010 survey by the American Psychological Association 91% of children said that they know when their parents are stressed about something, even without their parent explicitly saying that they are.
Children are very perceptive and they will pick up on any changes in your financial situation, whether you like it or not.
2. The picture in their heads might be even worse than it actually is
As your children start picking up on changes in your mood or spending habits, they will start putting the pieces together. When they realise that you are experiencing financial problems, they might imagine the situation to be much worse than it actually is.
3. Your current financial problems might hold valuable lessons for your children
A 2015 article by The New York Times argued that it is important for parents to tell their kids how much they earn. They tell the story of a man called Scott Parker who went to the bank and withdrew his entire salary in small bills. Parker arrived home to his six children with a bag full of money.
Initially the children were very excited to see the large piles of money stacked on the dinner table. He then sat them all down and started allocating the money for their various purposes. He removed some bills for rent, for food, utility bills, and so on. Before long there was only a tiny heap of money left.
What lessons can your children learn from your current situation?
4. By not being honest with your children, you might be teaching them shame
Parents often don’t tell their kids about their own failures for the same reason they don’t tell anyone else: shame. By not talking to your children about money, you might convince them that financial problems are something to be ashamed of and something that should always be kept secret.
5. They might believe it is their fault
If your kids start picking up that you are having financial problems, but you are trying to hide it from them, they might start believing that your money troubles are their fault.
How do you tell your children you have financial problems?
Once you’ve decided to open up to your offspring about your financial struggles, here are some tips you might want to consider:
1. Keep it age appropriate. For example, a teen can deal with and understand different financial concepts that a younger child might not be able to grasp.
2. Make sure they understand it is not their fault.
3. Tell them what they can do to help, but they should know that fixing the larger problems are not their responsibility.
4. Be honest! You can decide how you say certain things, but do not lie.
5. Give it to them in “bite-sized” pieces. Do not drop all the bombs at once, rather break the info down into smaller pieces.
6. Get additional tools, like books and games that help children learn about money.
7. No matter how dire the situation, assure them that there is hope – it will just require some hard work.
8. If you are two parents, make sure you are presenting a united front and that you are both on the same page.
9. Make it fun! Include your kids in the “fun” parts of money management. Take them along when you go grocery shopping and tell them that it is their job to look out for the cheapest options, give them their own pocket money and have them create a budget, and ask them for their ideas on things like recycling.
Kids can sense the power of money, but they often don’t understand how it works. Your financial troubles do not have to scare your children, it can be used as an opportunity to educate them and might even bring the entire family closer together. This is a daunting task for any parent, but silence about money is unfortunately not the answer.