It’s easy to be naïve and think that kids are too young and unaware of the ways of the world to become stressed over financial issues. This, though, is a big mistake! Even younger children can become stressed about family finances, at least through picking up on stress signals their parents are sending out during tough times. Older kids who hear at school, on the news, and from friends about general economic crises are likely to become concerned about how that could impact their own families. Plus, kids aren’t dumb; they know when you’re cutting back on spending on things they enjoy, like movie nights and toys!
Today, Daniela Baker with the consumer credit card website, CreditDonkey is here to help. She is a mother of two and knows while you can’t completely isolate your children from the effects of financial problems, you can protect them from stress about those problems in many ways. Here are just a few:
Be honest
You don’t need to reveal every aspect of your financial standing to your children, but you should be honest with them. If you normally take a family vacation but can’t this summer, don’t make up some fictional reason that you can’t go on vacation; just tell them that you don’t have enough money to go!
Honesty is especially important if your financial situation means major life changes, such as moving into a smaller home or downgrading your lifestyle in other ways. Kids definitely need to be prepared for these changes. However, they also need to understand that you know what’s most important – your family – and that together, you’ll get through even the toughest changes brought on by financial hard times.
Give the older kids actual numbers to look at
Most of the time, parents are very private with their children about what they make each month and what they pay in bills, but there’s really no good reason for this. Older kids should understand how the family finances break down. If you’re comfortable with it, giving your kids actual numbers to look at can help them understand where you’re at financially. For most kids, this information and understanding will leave them feeling less stressed – not more – because they don’t feel isolated and in the dark about what’s going on in your lives.
If you aren’t comfortable giving your kids the actual numbers of what you make, what you pay on your mortgage, etc., consider giving them percentages. Make a pie chart showing what percentage of your family income goes towards housing, food, clothing, gas, etc. That way, kids can understand that you are still taking care of the necessities, even if you have to cut back on the extras because the money simply isn’t there.
Teach them that money doesn’t grow on trees
One of the best ways to protect kids from financial stress now and in their own adult lives later on is to teach them that money doesn’t grow on trees. Don’t think that you have to continue providing your child with the same lifestyle you’ve always had, regardless of your financial circumstances. Most kids will handle changes surprisingly well if they have always known that you had to go to work to make money. Kids who work with a commission-based allowance, where they only get paid if they work, will understand the concept of working for what you get even more readily.
Help them manage their own money wisely
Start teaching kids good money management techniques for their own finances, and show how these techniques carry over into your family finances. For instance, you might make a sample budget with your kids, and help them make a budget with their own allowances or part-time work earnings. Teaching them good money management skills now will help them be less stressed about family finances because they’ll be able to see you’re making good choices with your own income, and it will help them be less stressed about finances in the future because they will themselves make good financial choices.
Make wise credit decisions
Credit problems are perhaps some of the most emotional and stressful financial issues for parents, so making wise credit decisions, such as using credit cards wisely, can help protect your entire family from financial stress. Even if you aren’t in bad shape financially right now, start making the best possible credit decisions for your family. Use credit cards when you need them, but pay them off quickly. We see too many families getting the wrong cards — if you rarely fly, it doesn’t make sense to go for airline miles — instead most parents are usually better off with a gas credit card that they’ll actually use. Look for good interest rates and rewards to use for everyday purchases such as groceries and gas, and don’t get yourself in debt over your head. Protecting yourself financially means you’re protecting your children from extra financial stress.
It’s impossible to make sure your children are never stressed about anything, but by openly communicating with them and allowing them to ask questions, you can help them stress less about finances and the economy in general.
I really do appreciate this post. I have really gotten into the show “Downsized” and I am so in love with the family and their bravery and courage. In today’s economy, you can be on top one day and on the bottom the next. With my husband owning his own small business, I thank God every night that he is prospering and I pray that it continues, but you never know. I do believe that we should teach our kids how to manage and be smart with money from a young age to equip them for the future.
DO you have any ideas on getting kids geared up for their financial future?
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