No matter their age, teaching children about money is important. People may face financial pressures in their adult lives, whether it’s a national economic recession or personal circumstances, and it’s very important to know how to deal with it. But that doesn’t mean children should be kept completely away from these important financial matters.
When to Talk to Your Kids
Talking about family financial issues isn’t something to do randomly. You should think about the time and place when the gravity of the situation arises, but your child should also feel comfortable. Quiet mornings before school or story time before bed may not be the best times to discuss money.
Instead, consider doing it over the weekend when your kids aren’t rushed with school or activities. For example, when you sit down for dinner as a family, or when you’re getting ready to play a game together, or when you’re on a long car trip together.
Note: Even with good planning, your kids may not be in the right state to hear what you want to say. If they are upset or working on a project or busy with other things, consider postponing the conversation to another time.
How to Talk to Your Kids
While financial stress is challenging, it’s important to be aware of the general stress levels among children and teenagers. Reports of depression and anxiety among children and teens have increased over time. According to the Centers for Disease Control and Prevention (CDC), 7.1% of children in the United States aged 3 to 17 (about 4.4 million children) have diagnosed anxiety.
For this reason, when dealing with a subject like financial problems, it’s important to proceed with caution.
Understand the Information You Share:
Before you talk to your kids about financial hardships, it’s important to make sure you really know what you’re talking about. For instance, if you’re discussing fluctuations in the stock market and how it’s currently affecting the country, you should do your research ahead of time. Or if a family member has lost their job, make sure you understand the circumstances and be prepared to convey it in a way your child can understand.
Be Careful with Language:
The words you use have a significant impact. If you’re worried about money, share with them what’s causing your concern and how it affects your family. While kids can sense that something’s off, they don’t always know what it is. Use this time to explain what’s happening in clear terms.
Pay Attention to Your Tone:
Sometimes serious conversations can scare children and make them think they’ve done something wrong. Be gentle and inviting so your kids feel comfortable asking questions. Reassure them that while you are serious, they are not in trouble and what’s happening is not their fault.
Keep the Conversation Going:
If you’re experiencing ongoing financial problems, one conversation might not be enough. If you’ve lost your job and shared that with your children, celebrate when you get a new job. If you have to move because of a job or opportunity, let them know about that too. Don’t stop at just one conversation; help them learn to trust you when you share important information. Open the door for dialogue and allow your kids to ask questions, and don’t be afraid to answer them, even if you don’t know the answer right away. “Kids learn by doing, so make them part of the solution,” Sheehan says. “Make it fun and hands-on. They will carry these lessons with them for a lifetime.” Your kids will feel involved, and you’ll have the opportunity to grow together. It’s also perfectly fine to say “I don’t know” – sometimes that’s all you have, and they will know that.
Note:
When
Talking to Your Kids About Economic Hardship or Financial Issues, it’s important to share with them that every family’s financial situation is different, and that’s normal. If they talk to other kids about money at school, they should know they need to refrain from judgment and approach the conversation with empathy.
What to Say to Your Kids Based on Their Age
What you say to your child may depend on their age and level of understanding regarding personal finance and economics.
Preschool and Early Kindergarten
Younger children may not understand the details of money problems, but they may grasp the concept of money.
Explain what it means to not have enough money for your family. This might mean no vacations next year or fewer gifts during the holidays. For some families, it might mean moving from your home. When your children ask questions, be clear in your explanations and try to break things down as much as possible. It’s also best to avoid using figurative expressions, as younger children may take these expressions literally.
Early Elementary School
Older elementary school children may know a little more about money than younger kids. For example, if you’re no longer leaving home to go to work, they may understand that this means you don’t have a steady income.
Share with them regarding the existing problem, such as if you have to pay a large bill or why you’re not driving the car anymore. It’s important to be detailed without being overwhelming. Your child may not understand why hospital bills or owning a car are so expensive, but they will understand that you need money to pay for those things and that you may not have the money right now.
“For younger kids, put it in their world,” said Sheehan. Instead of sharing tough facts with younger children, Sheehan recommends tying it to major events in the world, such as the recession in 2020, and explaining how these events have a direct impact on how people are managing their money.
Middle and High School
Most older children have the ability to understand much more than we might think. While it’s good to explain what’s happening, you can also use them as an advisory board.
“If they are at a sufficient level of maturity, you can share high-level facts,” said Sheehan. “Like how you or members of your community could be affected by job loss and what that means for spending in the coming months.”
Share with them how you plan to pay things or get out of this financial hole. If you lost your job, share that you’re looking for a new one. If you need to pay a large bill, explain that you’re working on a payment plan. Involving your kids gives them a sense that what they say and do matters in your family.
How to Involve Your Kids in Your Financial Matters
Kids don’t need to be oblivious to money problems. Even after you explain the financial issue you’re facing, you can build their financial knowledge.
Younger Kids
Teach them how to earn money, where it goes, why you need to pay for things, and what happens when you don’t have enough money to cover your bills.
If you have the capacity, explain to them how to save money – whether through a piggy bank or a bank account – and show them how to
Source: https://www.thebalancemoney.com/how-to-explain-financial-trouble-to-your-kids-5089685
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