Talking to your kids about tough financial times

By: Diane Lang

Stats: 30% of children ages 7-17 years old said their stress levels are higher this year then last year due to financial reasons

Signs of Stress: Change in eating habits, change in sleeping habits, change in academic grades,  loss of interest in hobbies, 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.

Talking to your children:

1. It’s ok 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 kids 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. 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 ok. Watch how you express your fear both  NON-VERBAL & VERBAL. Kids learn thru 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/attitude 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 your doing to make the situation better:

Looking for a job, collecting unemployment, the wife or husband took on more hours at work or you had a good savings.


9. Basic needs – lets the kids know that everything will be ok and nothing much will change. All their basic needs will still be there. There will be food on the table, a house to come to, a car to pick them up from school, etc

10. Its 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:

Change one thing at a time

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 3. Let them pick the one they want.

12. Lie – 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 ok to lie!

Instead be honest, clear, simple and concise

Dad is losing his job. I wish he wasn’t but his company is going out of business.

Dad is losing his job but it’s ok 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.

Allowing your child to express 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.

Ex: 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”

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. Good way to spend quality time together, spend no money and be a good role model. Helping others is a key factor to happiness.

EX: 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.

Ex: 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 & 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 it’s 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 5 years old.

 Diane Lang is a Wellness Counselor/Educator and owner of DL Consulting.

(This article was previously printed in Dec. 2010 New Jersey Life Health & Beauty magazine and May 2009 The Alternative Press.)

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