Financial TMI

Talking Money
With Your Kids

The precarious state of the economy is definitely a hot topic, especially when it comes to family finances. With budgets and bills constantly running through our minds, it can sometimes be hard for parents to draw a line between what is appropriate to share with kids and what should be kept between adults.

family counting pennies

Elizabeth Berger, MD, mom of two, child psychiatrist, and author of Raising Kids with Character, provides valuable advice for parents wondering how to talk to kids about money.

The heart of the matter

When money is tight and finances are stressful, the family dynamic suffers, often because an uncertain financial future breeds destructive behaviors. "When times are economically rough, there are always increases in family crises such as domestic violence, child abuse, and use of drugs and alcohol," says Dr. Berger. "These are serious issues which families need to face openly and constructively." While it's common for parents to have heated discussions (or fights) over money, it's important that children are not asked to shoulder the financial stress.

The honesty policy

It can be tempting to keep financial problems a secret, but, truth be told, secrets have a way of surfacing through emotional outbursts and/or palatable anxiety. "If there is a change in the family finances, I think parents do better by sharing this information with their children in a calm, dignified, friendly way," says Dr. Berger. "People with money worries feel helpless anyway, so taking charge of the family communication proactively will give the parents a sense of being more in charge of their own lives."

Being honest with your kids, without giving them more information than they need, will help them feel secure in a potentially out-of-control situation.

Avoid casting blame

There's no question that raising kids is extremely expensive, a fact that can be exacerbated by tough economical times. Still, kids should not feel responsible for their parents' money problems, even when they are asking for something expensive. "It doesn't cost a parent anything to express generosity to the child as an emotion, even if the parent doesn't have the cash right now to be generous with money," says Dr. Berger. "Being generous with feelings is really all the child needs, anyhow. It is hard for the stressed parent to have faith in this sometimes, but it's the truth."

The silver lining

Nobody wants to experience financial hardship, but the reality is that many of us do. Depending on how you handle the situation, it can be an exercise in family communication. "The kids are being informed because the parents love the children and being honest about the pickle that you're all in together is part of loving someone," says Dr. Berger. "All such conversations need to be pitched to the level which is appropriate to the child's mind. Details, casting blame, and long explanations are not necessary. The family has money problems, that 's all."

Want to read more about family money and budgeting?

Tags: talking to your kids

Recommended for you

Comments

Comments on "Financial TMI"

luvlub November 10, 2010 | 12:58 PM

I think it's important to talk about money basics with your kids, but not about financial problems. There is a fine line between educating and unnecessarily stressing out. IMO

Kaye October 21, 2010 | 8:57 AM

I don't agree at all, Amber! I think it's important to talk to kids about money. We try to use cash with our kids so they understand that you can't just swipe a card anytime you want something.

Amber October 21, 2010 | 8:55 AM

I don't think you should talk about money with or in front of the kids. It totally robs them of part of their childhood innocence and wonder when you attach a value to everything or make them feel bad because you can't get them something.

Susan October 21, 2010 | 8:54 AM

I'm not sure when to start talking to my kids about finances. What's the right age to start these convos?

+ Add Comment


(required - not published)