How To Talk To Your Kids about Bad Family Finance Problems

Today’s bad economy seems to be the worst time to raise kids. Not only do you have to constantly adjust your budget to pay all your financial responsibilities, you also have to put away enough money for your children’s future. Education and health are just two of the most important as well hefty expenses that parents have to be able to afford for their children’s welfare. And then there’s the everyday cost of transportation, food, rent, clothes, utility and whatnot.

Open Up

Some parents think that shielding their children from their financial problems is the only sane course of action. Who wants to mess up their kids’ head with thoughts of looming loan deadlines and premium payments? However, keeping your children in the dark would only serve to give them a false sense of security in an era where prices are skyrocketing and available jobs are on the decline.

The good news is that there is a way to share the burden of the family’s financial dilemmas with your children without traumatizing them. You need to help your children deal with the problem in their own way. The key is in making them understand the situation in the simplest way possible. After all, they’re part of the family, and they deserve to know what’s happening.

A Family Affair

If you’re experiencing money troubles right now, rest assured that you’re not the only one. All over the world, millions of families are feverishly planning to make cutbacks on their usual expenses and trying to save more money from their meager incomes. These things are on the Internet and the television, so you can bet that your kids have at least a general sense of what’s going on. But it’s up to you to give them perspective and truth.

Here’s how you can talk to your family about the current state of your finances and your plans for the future:

1. Plan the family talk well ahead of time. Clear your schedule of all meetings, soccer practices and pajama parties so that you can discuss the issues together as one family. It will help if you prepare a bulleted list of points you want to bring up during the talk so that your kids can follow your train of thought. Let them know that this is a serious meeting so that they’ll be able to work out their own schedules accordingly. A poorly-thought out or a rushed pep talk can only confuse your kids and prevent them from seeing your financial struggles as clearly as they otherwise should.
2. Be honest. Don’t promise an overseas trip this summer if you know you can’t afford it—you will only end up disappointing your kids. Let them know why you’re constantly shouting for them to turn off all unused lights or to finish their packed lunch. Keep in mind that kids are smart, and trust that they will understand (to a certain extent) what you have to say. The best way to protect your kids from the harsh realities of life is to help them face the same—don’t scare them but don’t sugarcoat the ugly facts either.
3. Use the situation as an opportunity to teach your kids good money management. Put a positive spin on a bleak situation by giving your kids tips on how to handle their money more wisely. Help them make an Excel file of their weekly allowance to monitor their spending and saving habits. Tell them where to shop for food and clothes so that they can avoid the pricier establishments. Help them sell off old and unused toys and other items to earn extra income.
4. Ask for their opinion. Bad as the situation may be, now is the best time to involve everyone in the family in the effort to save money and steer clear of debt. You might even be pleasantly surprised at how enthusiastic they can be when asked to participate in making decisions about the family funds. People manage stressful situations best when they are doing something proactive to deal with what’s happening, and that goes for all ages and sizes.
5. Encourage and answer questions. Your kids will inevitably ask questions such as “Why did you lose your job?” or “Do we have to live on the streets now?” Some queries may be downright ridiculous, but try not to laugh at them anyway. Your job is to make them understand what’s happening, so tell them the story in the simplest, most straightforward way possible. Go online and make them read the news so they’ll know that this thing isn’t happening to just your family.

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