Do Children Need To Know About Family Finances?

(This is a guest article by Trisha Wagner*)

Specifically should you talk to your children if you are experiencing a financial hardship? Just as each family is different each situation is unique and there is not one easy answer to this question. I have a three year old and while we ran to the store this weekend to pick up a new router for my new work at home job, I was faced with some difficult questions from my toddler (since this is my only child, I am still amazed at how hard it is to answer some of his questions). It made me think: how much do our kids have to know about our finances? Is it possible to give them too much or too little information? In my case, the answer is a bit simpler. There is only so much a three year old can wrap his head around. There is no need to go into budgets, the credit crunch or why mommy has to wait and see how her new job pans out before spending money that might be needed for other things. He simply doesn't care and doesn't have the ability to comprehend you can only have ONE thing and it can't cost more than ten dollars. I get that. But what if you have older children.....kids old enough to have the basic gist of how money works and how important it is in keeping the household running?

If the current economy has you on your toes when it comes to the family finances it is likely your kids already sense something is amiss. Before you start worrying about how or if you should discuss a financial hardship with them you must realize that a child of any age first needs to know that they are safe, secure and loved. In their world, those things are more important than money and it is your job as a parent to explain to them that regardless of what may be going on with the household budget they can feel confident in those three things.

That being said you definitely should consider having a family meeting to discuss what is going on with your children in an age appropriate way. Some children will feel more secure by being included and you will also have the opportunity to prepare them for any possible changes that may be in the cards due to the economy. However, there is no need to go overboard and burden your kids with too much adult information which they may not be able to process. In doing this you are simply adding to their fears and feelings of insecurity instead of easing them.

Since the economy is not likely to turn around just because we have crossed over into a new year, it will be important to keep the lines of communication open with your children. If you or your spouse have lost a job or anticipate significant changes in your life due to finances, consider having a regularly scheduled family meeting to briefly go over information and answer any questions your children might have.

Many families are facing tough times but most will be able to weather the storm. Make sure you take the steps necessary to ensure your kids don't worry needlessly or have increased negative effects due to too little or too much information.

*About the author: This article was contributed by Trisha Wagner. Trisha Wagner is a freelance writer for DestroyDebt.com, a debt community featuring debt forums. Trisha writes regularly on the topics of getting out of debt and personal finance.

*Image Credit: Photograph by lucias_clay [via Flickr Creative Commons]



If you like this article, you can bookmark it or subscribe to the feed.

6 Comments:

Retirment Planning said...

Yes, so that they can adapt to the lifestyle that parents could only just afford.

Sara said...

In my opinion, I think parents should talk to their kids about financing, but in a non-direct matter. For example: the parent (expert) should hold a workshop for their kids and their kids friends. My mother tried to warn me about getting a credit card, and against her wishes I got one anyway, and my credit is now shot! This is why I say that parents should use a non-direct approach because children like to do the opposite of what their parents say.

Sara,(Check out my Employment & Career Blog)

http://www.employmentmoney.blogspot.com

Bad Credit - Easy said...

Keeping your children informed about the family finances benefits them in two ways.

First, they will start to appreciate the value of money much faster when they are exposed to how mum and dad deal with having to get by on a limited supply.

Secondly, keeping your children in the loop really makes explaining cutting back a lot easier. You can simply refer back to any conversation that you have had with them regarding the $$$ issue and they will have a much easier time dealing. By then not spending they are also helping the family so they feel better for themselves too.

Naturally you have to be sensitive of what information that you tell them and at what age. Don't waste your time trying to explain the workings of the credit economy to a 5 year old.

Make $200-$900 a Day On Google said...

I think that you should talk to your children if you are having financial hardships. While most parents are embarrased to actually devulge this information, it is important to let children know the reality of a situtation just in case something else comes up, they will know what the root of the problem is. Children can handle more than what people give them credit for.

Jerry said...

Far too many kids are being cranked out into society with no clue about money at all. This leads to an entire segment of society that becomes a part of the problem, rather than some insurance for the solution. Teaching kids to be smart and savvy about money should be mandatory... but then again, so should a whole bunch of other things that poor parents avoid.
Jerry
www.leads4insurance.com

Pauline said...

CountlessFINANCIAL parents pay a lot of money to assist their children acquire the best professional training but forget to forfeit the little essential to help them acquire the skills of managing their education paybacks- salaries.