Parents: How to talk about money problems to your children


As a teenager, I experienced the recession of the 1990s in Australia, and I clearly remember this friend who asked his father for some money to go to the cinema. Both frustrated and resigned, his father had explained to him that he had just been laid off and that he was not sure that another job was on the horizon. So he didn’t have enough to give her pocket money for movie tickets. Rather than upsetting or frightening us, this response had been a kind of enlightenment by the somewhat helpless teenagers that we were.

This is how many children learn about their parents’ financial difficulties: by being denied something they always could have had. This is what produces a click.

But it’s not easy to talk to your children about the rising cost of living. Many parents worry about worrying their children or instilling in them for the rest of their lives a “scarcity mindset”, that is, the feeling that any expense would be a mistake.

So how do you find the right words to talk about money difficulties? And how to adapt his speech to the age of his child?

Keep calm and explain things simply to children

Most children of primary school age are unaware of the economic reality outside their family and immediate surroundings. They have not yet developed the ability to put sudden changes into perspective.

The key is not to let your own anxieties rub off on them. Children this age look to their parents as landmarks and will mirror any fear or anxiety you express, sometimes disproportionately. Calm and simplicity are therefore important keys.

Just explain that things cost money and that you currently don’t have as much as usual, so as a family there are some things you can no longer afford.

Very young children can be ruthlessly narcissistic, which is normal at this stage of their psychic development. They may even demand that you work more, or harder, so they can afford the items and activities they want. The best you can do is laugh at these types of responses and say you’ll try, while explaining that for now you’ll have to turn to other hobbies.

Consider a program that replaces their old activities with free activities. For example, explain that if they can’t play their usual sport this season, you’ll go to the local park every week to kick a ball around and have a picnic instead.

Give teenagers a role

Depending on their greater or lesser interest in current affairs and their apprehension of maths and economics, a sudden drop in the family budget can also be a shock for teenagers.

But around the age of 12, children experience a sort of explosion in their ability to understand and process information . Not only will they be able to understand your situation but also give you a hand.

By giving adolescents a “role” to play in helping the family, they are given a sense of competence and this way of looking at problems as a team responds to the worries they may have. In other words, they will feel less helpless. This approach is based on what psychologists and researchers call “self-determination theory” .

This concept, based on numerous studies, postulates that most human beings have an innate need for:

  • experience and demonstrate autonomy (make their own choices, act of their own volition);
  • to feel that they are good at something, to have accomplished something worthwhile;
  • to work well with others, especially with people who are dear to them.

Working as a team to achieve a common goal is therefore a great way for a family to stick together and contribute to everyone’s mental well-being. Talk with your teens about activities, events, and items that could be put on the back burner or dropped. Don’t forget that teenagers have a very acute perception of hypocrisy. There is no point in suggesting that they reduce their leisure time, for example, if you are not ready to do the same.

Take the opportunity to discuss the difference between “wants” and “needs” and ask them to classify family expenses into these categories. Calmly discuss points of disagreement.

Ask your teens to think of better ways to save money – and help you. They may like to come up with ideas such as shopping with a weekly menu program in less expensive stores, looking for promotions, walking or cycling to school when possible, finding a small job or baby-sitting.

Rather than focusing on what we should do without, it’s about working on what we can do differently. Teach your children that life can be full of pitfalls, but how you handle them matters. This will help them grow into resilient adults.

Author Bio: Rachael Sharman is a Senior Lecturer in Psychology at the University of the Sunshine Coast