20 Tips: Talking to your kids about tough financial times

Thirty-percent of children ages 7-17 years old said their stress levels are higher this year than last year due to financial reasons.

Signs of stress in children/teens: change in eating habits, change in sleeping habits, change in academic grades, loss of interest in hobbies and/or leisure activities

Physical signs: stomachaches, headaches, low immune system – frequent illnesses
* If a child internalizes their stress/worries they can become depressed and have anxiety disorders. Kids can have panic attacks too.

Here are 20 tips for talking to your children about tough financial times:

  1. It's okay to talk to your children about finances.
  2. Discuss who makes the financial decision in your home.
  3. When discussing the financial situation, make it clear that it’s not their fault. Be empathetic to your child’s feelings.
  4. Normalcy – try not to make drastic changes or big changes in their schedule. Try to keep everything as normal as possible with their schedules. This will keep the fear level down.
  5. Age does not equal maturity – an age/number doesn’t mean a child is mature. The more mature they are, the more they can handle.
  6. If a child becomes fearful, overwhelmed, stressed and/or anxious, they can act out. A child can become depressed as well. We now see depression as early as 3 – 4 years old. Children can act out and become angry or guilty like it’s their fault. If you see your child is extremely and/or chronically stressed or showing signs/symptoms of anxiety and/or depression like irritability, mood swings, sadness, isolation, change in grades, change in the desire to go to school and see friends, participate in activities, change in sleeping and/or eating habits, get outside help and/or tell your school counselor.
  7. Reassurance – even if you are worried about the financial future of your family, don’t let it show. Reassure your kids everything will be okay. Watch how you express your fear both NON-VERBALLY & VERBALLY. Kids learn through imitation and role modeling.  They absorb like sponges; if they see your worried and stressed, they will feel the same way. Also remember – positive and negative behaviors/attitudes are contagious. If your family is in a bad mood constantly it will rub off on the kids. Happier people handle situations better, they are more realistic and recover from negative situations quicker. The more optimistic and happy the parents are, the easier it will be for the family to remain calm and intact. Kids don’t understand what a recession is, but they can sense fear and stress.
  8. Tell the kids what you’re doing to make the situation better: looking for a job, collecting unemployment, the wife or husband took on more hours at work, or you have a good savings. ALWAYS STRESS THAT THIS SITUATION IS TEMPORARY!
  9. Basic needs – let the kids know that everything will be okay and nothing much will change. All their basic needs will still be there. There will be food on the table, a house to come home to, a car to pick them up from school, etc.
  10. It’s good to use past experiences or real life experiences from your family on how you dealt with these types of situations.  
  11. If you do need to make drastic changes in the kids life. Follow these steps: 1. Change one thing at a time. 2. Let the children be involved in what changes they have to make. So, if they can only keep one extra school activity or sport out of three, let them pick the one they want.
  12. Don’t ever lie to your kids. You will feel worse about yourself. You will feel guilt. The kids can lose respect towards you. When you lie, you are teaching your kids it’s okay to lie! Instead, be honest, clear, simple and concise. Examples:  Dad is losing his job. I wish he wasn’t, but his company is going out of business or Dad is losing his job, but it’s okay because I work full-time and we have savings. Then express what is good and safe in their life. Love, family, friends, good community, etc.
  13. Q&A – let your child express their concerns and ask questions. Don’t dismiss them – answer them as honestly a possible. Allow your child to express his or her concerns about the changes in their life and how they feel about it. As a parent explain that you have to make changes and sacrifices as well. Example: I wanted a new outfit for work, but due to our budget I couldn’t get it. This will show the child that the new rules/budget are for everyone
  14. Don’t send mixed messages – don’t say you can’t buy or afford something for the kids and then buy it out of guilt. This will confuse the kids. They need consistency. As a parent/role model don’t use such phrases as: I want ___ or I wish I had____.  Don’t be too materialistic or try to “keep up with the Jones’s.”
  15. Don’t bribe your kids with materialistic items. Use positive reinforcement like praise and compliments.
  16. Altruism – teach your kids to pay it forward. Teach them about volunteering/charity. Volunteer as a family; this is a good way to spend quality time together. Spend no money and be a good role model. Helping others is a key factor to happiness. Example: Meals for wheels – the whole family can drop off meals at senior centers or homes.
  17. Frugal – is not a bad word. Teach your kids about abundance. Kids should have abundance of love, affection, quality time with friends and family, etc. Frugal does not equal cheap. Example: We want to save gas and electricity so we have oil left for the next generation. We want to recycle to protect the environment. We garden to have fresh veggies because it tastes better and is healthier for us – no pesticides or chemicals.  Teach your kids to live an abundant lifestyle filled with fresh air; quality time with loved ones; a good, safe location/environment and lots of fun and smiles.
  18. Give and Take – discuss with your kids the give and take method while budgeting. They can buy _____, but then you can’t buy________.
  19. Elementary age kids can’t understand the meaning of a recession, but they can understand that the economy has its ups and downs. Middle school and older can grasp the meaning of a recession.
  20. Media – kids are smarter then we think. Even young kids watch TV, go on computers, listen to their peers and teachers and they know more then we think. My daughter has asked questions about money, economy, etc. since five years old.

Diane Lang – Positive Living Expert and psychotherapist – is a nationally recognized author, educator, speaker, therapist and media expert. Lang is extremely mediagenic and offers expertise on a variety of health and wellness topics about creating balance and finding happiness through positive living. Lang offers expertise in multiple mental health, lifestyle and parenting needs.  In addition to holding multiple counseling positions, Diane is also an adjunct professor at Montclair State University and Centenary College.   

Lang is the author of two books:  "Baby Steps:  The Path from Motherhood to Career" and "Creating Balance and Finding Happiness."