If you’re a parent whose financial situation has changed due to the pandemic, you may be struggling to determine the best way to convey this new reality to your children. Fortunately, there are healthy and educational ways to have conversations about family finances with children.
To help inform these discussions, HuffPost asked a few experts about how parents can explain to kids that money is tight right now. Read on for their advice. Although our discussions focused on the current recession, this guidance can apply to other economic circumstances as well.
Inform, but don’t overshare.
“Regarding any discussion with children, whether it be about the pandemic or financial stress, developmental research tells us that parents should share enough about the current experiences so that a child feels informed, but not overshare to the point of your child feeling additional stress and pressure,” said Katrina Lindsay, a pediatric psychologist at Akron Children’s Hospital.
Details that aren’t age-appropriate may overload kids with information that could worry or scare them, so it’s best to stick to clear, brief explanations on changes in family spending. Be transparent and honest, but avoid saying more than they need to know. Ask them questions and prepare to answer any that they may have.
Lindsay encourages parents to engage in “knowledge checks” to get a sense of what their young children know. They can ask questions like, “Have you noticed that this summer looks a little different regarding our activities we are doing?” or “Has mommy seemed extra stressed to you?” or “When you asked for that toy yesterday, and daddy said ‘no,’ do you know why he might have said ‘no’ to you?”
“As I have seen time and time again in my own practice, kids often know more than what parents think, but they often fill in the details with their own fears and understanding, which may be a lot scarier than the actual reality,” she added.
“When it’s time, explain to your child that you can’t buy new toys or things they don’t need right now, but instead can be on the wish list for the next birthday, holiday, or other gift-giving occasions.”
Speak in a calm, relaxed manner.
Parents set the tone for these conversations, so consider the best time and setting to talk to your children. This is particularly important with younger children, said Sanam Hafeez, a New York-based psychologist.
“Suggest an activity such as coloring or a game to engage them and make them comfortable,” she said. “Trying to sit down for a formal talk with young children is not likely to be as effective. When it’s time, explain to your child that you can’t buy new toys or things they don’t need right now, but instead can be on the wish list for the next birthday, holiday, or other gift-giving occasions. Explain that you have the family’s best interest in mind and that if you don’t save now, they won’t be in a good situation later on.”
Hafeez added that kids under 10 may have a hard time grasping certain concepts, so this is a good time to explain what things like budgets are in simple terms. After the conversation, parents continue to set the tone for how the family will manage during this time.
“From there, you have to lead by example and not let your children hear you complaining aloud about money,” said Hafeez.
Use age-appropriate examples.
Lindsay advised using a local community example to explain your family’s economic situation ― like a favorite pizza place that has temporarily closed.
“A parent could explain that the pizza place remains closed so that the owner and employees can stay safe, but that the owner and employees may not be getting the same income as they used to, so the owner may have to make choices, and hold back on things that are unnecessary or expensive,” she said.
“Then, if your child is old enough and can understand, you might be able to explain your own financial reality through this lens, elaborating that like the pizza place, mom/dad/guardian’s workplace also made choices to keep their workers safe, and so all of the workers may have to cut back and make hard choices,” she added.
Lindsay also recommended using concrete, kid-friendly examples to explain the sacrifices the family may need to make to get through this time, rather than going into more abstract notions like bills, mortgages and bank accounts.
“Some of the hard choices may be keeping everybody safe and fed, and not getting to do other things that are fun or extra this summer,” she said. “Like not joining the pool this summer, keeping the air conditioner at a higher temperature, cutting the cable bill and not going out to eat as often.”
Highlight all the fun, free activities available.
“Parents could close on this conversation by working with their child to come up with a list of fun and free things they could do this summer (play in the sprinkler, make cards for family members, start a new book series from the library) so that the conversation ends on a positive note,” Lindsay said.
Hafeez echoed this, suggesting that parents get their kids excited about playing new games that don’t require money, rather than a new toy or video game. They can also reward good behavior with things like stickers or snacks rather than money.
“Also explain that not all ‘good things’ come from a store or are bought online and that there are other ways in life to have fun and experience joy without spending money,” she said.
Give them a sense of control.
“In uncertain times, one of the best ways we can combat some of that stress is to focus on the things we can control,” said Kumiko Love, a financial counselor and creator of The Budget Mom. “Give your child the opportunity to help when it comes to family finances, like helping to track financial goals, talking about creative ways to save, or helping in the kitchen with frugal meals.”
Kids can learn about budgeting and help determine what to prioritize when shopping for groceries and essentials. Love said she includes her son in her day-to-day finances and gives him an opportunity to ask questions.
“Adapting to change can be extremely stressful for children, so it’s important to remind them you are the constant in their life,” Hafeez explained. “If there are choices to be made, when possible, involve them. For example, ‘Kids, you can buy that new scooter or we can put it toward a staycation, which do you prefer?’”
“Frame the situation with positive language, and as a challenge, the family is equipped to, and will, overcome.”
Hafeez noted that teens and young adults can play an even bigger role, as they often earn their own money and have some experience making financial decisions. Although they may be angry, frustrated or annoyed at the family’s financial situation, they can at least grasp why it’s happening and appreciate that you’re all doing the best you can.
“Do not try sugar-coating anything and be realistic about what you can promise them for the future. If they begin speculating on ‘what could’ happen or ‘worst-case scenarios,’ steer them away and focus on the facts,” she said. “Frame the situation with positive language, and as a challenge, the family is equipped to, and will, overcome. Your teen might even take the initiative to help, and you should let them if this is the case.”
Emphasize that they aren’t alone.
It’s helpful for kids to know that theirs isn’t the only family going through hard times. This is particularly true during the current recession, which affects everyone in some way.
“Explain to kids that there are over 40 million people across the country whose jobs have been impacted and that your family is part of that number,” said Tim Sheehan, co-founder and CEO of the family-focused financial literacy app Greenlight. “Let them know this is just a temporary change that you’ll get through as a family.”
Families can find support and manage money-related stress by talking to a counselor or confiding in their loved ones.
“This is an opportunity for your family to find strength in themselves and each other, staying connected through conversations about their fears, hopes, joys, and money,” Hafeez said. “Since most people are limited as to what they can do because of the virus itself, you might want to emphasize to your kids that they are not missing out on travel or restaurants or parties during this time because these things have been scaled down by most people even if they have the money to do it.”
She also advised parents to let their kids know that they aren’t alone in sometimes seeing something they want but can’t have right away. It’s also helpful to emphasize the positive: all the things you do still have.
Use the opportunity to teach finance lessons.
“Kids learn by doing, so make them part of the solution,” Sheehan advised. “Talk about how emergency savings can help them through tough times and show them how to save. Work together to set savings goals or talk to them about a big-ticket item you’ve needed to save for in the past.”
He also suggested using this time to discuss needs ― essentials like shelter, clothing, food and water ― versus wants, like nice restaurant meals, the trendiest video games or things inspired by peers and pop culture.
“I find that getting as specific as possible when explaining necessities helps kids master the concept and can begin to apply it in real-life trade-off decisions,” he said.
“Remember that you are not depriving your children, but instead teaching them valuable lessons on delayed gratification, earning rewards, and how family finances and budgets work,” Hafeez noted. “Food, clothing on their back and rent come before toys and gifts.”