Photo courtesy of freeparking
I chose the image above because according to the owner it was taken around the Depression Era. Notice the expressions on the kids’ faces. It’s as if their faces tell the story of the struggles felt at home.
Kids are intuitive creatures. They often pick up on subtleties lost on many adults. Over the last few weeks my oldest child has overheard conversations about money, the stock market, and the broader economy. She’s also heard news reports about the upcoming election, and how the struggling economy is playing a major role in the ongoing political debate. My daughter is eight years-old; old enough to pick up on these conversations, but not quite old enough to grasp all of the concepts. She asks questions about the political candidates, about foreclosures and taxes and job layoffs. Other parents might be fielding similar questions in response to conversations their kids have overheard. Here are the age-appropriate approaches I recommend for addressing their questions.
Small Kids and Money
My son is only four years-old, and he is oblivious to most problems with our economy. As long as his basic needs are met he couldn’t care less what the market is doing! What he would be able to detect is financial stress between me and my wife, which is why we try to limit any discussions about money around him. Like I mentioned in the opening paragraph, kids are very intuitive. He very easily picks up on stress in the home, even if he can’t yet identify its cause. For this reason, try to avoid money discussions around young ears.
Preteens Have Lots of Questions
If your kids are anything like mine their favorite question is, “Why?” I hear this all the time–why is the sky blue? Why do you have to go to work? Why are some people rich and others aren’t? Some of these questions are easier to answer than others. Preteens are old enough to understand some basic financial concepts, such as compound interest and primer discussions on debt. However, any worries expressed in the household over finances and overheard by preteens often lead to insecurity as kids start to think something bad will happen to their family if they go broke. For this reason, try to keep things general when discussing money rather than fully disclosing your financial problems to your preteen. Statements like, “We have some debt and are working extra hard to pay it off” acknowledge the problem, but focus on the steps taken towards a solution. That’s what kids this age need to hear most.
Teenagers Have All the Answers
If preteens have all the questions, teenagers have all the answers. Don’t believe it? Just ask one. If you are struggling financially it makes sense to include your teenager in discussions affecting your household, such as a parent taking on a second job, or selling the family car to lower your monthly payments. If kids know about the difficulties you are facing as a family they will be less likely to question the sacrifices made during tough times. Not that there is a problem with simply telling kids no, but sometimes it helps to explain why you can’t afford to do something or buy something in the context of a larger plan to turnaround your financial situation.
Although you are freely telling teens about your financial difficulties, it is also important to reassure them that things will be okay–that you will pull through as a family, and you are busy making sacrifices to support them. Older teens may even feel inspired to pitch in by picking up a part time job, and this provides a great opportunity to do a little character building that will last a lifetime. As a parent, you know your kids better than anyone, so tell as much or as little as you feel comfortable sharing, but always do it with their best interest at heart.