Financial Hardships: Age-Appropriate Conversations with Children

In times of economic uncertainty, discussing financial hardships with children becomes a crucial aspect of parenting. Families may find themselves facing difficult decisions such as downsizing to a smaller home, taking on extra jobs, eliminating expensive habits (like going out to eat every week), or cutting back on family trips—even canceling planned vacations altogether. All adults understand that plans can change. Children, not so much. Approaching this conversation can be challenging, especially considering the varying levels of understanding across different age groups.

It is essential for parents to be mindful of creating unnecessary worry or concern by discussing financial hardships or with children (and even amongst adults when children can listen in). Children who overhear these discussions may lack the necessary context to fully understand, leading to inaccurate conclusions and unnecessary stress. Therefore, it’s crucial for parents to assess the information they share with children and ensure that it’s appropriate and necessary for their understanding and well-being. If children aren’t observing any significant changes in their daily lives, there may not be a need to bring up financial issues. Similarly, adults should be cautious about having conversations about finances or mentioning potential changes that are merely possibilities.

Here, we offer guidance on how to navigate these discussions effectively, tailored to the developmental stages of children.

Preschoolers (Ages 3-5)

For preschoolers, simplicity is key. Keep explanations straightforward and concrete, using language they can grasp easily. Focus on what their experience will be and what changes they may have. But more importantly, reassure them of what will stay the same. The intent is to promote a sense of safety and security within the family unit, regardless of any financial challenges. Utilize storytelling, drawings, or play to illustrate basic concepts of budgeting or making do with less.

Early Elementary (Ages 6-8)

As children enter the early elementary years, they begin to grasp more complex ideas. Children at this age tend to think in a time-frame of only a week or two at most. Discussions farther in the future are likely unnecessary. Provide basic explanations about financial difficulties, using relatable examples from their own lives. Consider including children in daily purchase choices. For example, explaining how to make choices within a budget. One idea might be to discuss the cost of buying a dozen cookies versus making them at home. Emphasize the family’s efforts to manage the situation positively and encourage questions to foster understanding and alleviate worries. The goal is to instill that the adults are actively thinking about solutions.

Upper Elementary (Ages 9-11)

These children are capable of understanding more nuanced discussions about finances. They are able to think in a bigger timeframe, often a few weeks to a month. Therefore, offer slightly more detailed explanations about budgeting, saving, and the reasons behind financial challenges. Engage them in brainstorming solutions or ways they can contribute to the family’s well-being. Consider including them in a family meeting about how to meal plan for the week, how to save by wasting less food, for example. Reassure them that financial difficulties are not their fault and that families work together to overcome them.

Early Adolescents (Ages 12-14)

As children transition into early adolescence, they seek more autonomy and understanding of the world around them. These children can think and plan for things in the coming month or two. Have open discussions about the family’s financial situation, including income, expenses, and savings. Teach them about financial planning and responsible decision-making over a greater period of time. Emphasize the importance of resilience and adaptability in facing challenges and “saving for a rainy day.”

Late Adolescents (Ages 15-18)

Teens preparing for independence and adulthood often think in terms of months. Depending upon their maturity, parents might engage in honest conversations about the family’s financial realities and potential long-term impacts. It is important to stress that these challenges are parental responsibilities to solve. Parents may encourage them to explore part-time job opportunities or develop skills that can contribute to their own financial independence, without expectation for major contributions to the household finances. Depending upon the situation, it may be appropriate to consider what the teen is expected to pay for and what still remains the obligations of the parents. Provide guidance on managing money wisely and planning for their future financial goals.

Seeking Support

Parenting through financial hardships can be overwhelming, and it’s okay to seek support. Even when following the best advice, children may still be negatively impacted by the situation. They may experience emotional and behavioral changes stemming from internalized stress due to the family’s financial burden. Parents might observe emotional shifts like heightened irritability, anxiety, or withdrawal in their children, alongside behavioral changes such as altered sleep patterns, appetite, or academic performance.

If these signs persist and significantly disrupt the child’s daily life, regardless of age, maintain a sense of hope and optimism while actively listening to their concerns. Validate their feelings and offer reassurance that the family is working together to overcome challenges.

Consider consulting a mental health professional if you notice significant changes in your child’s behavior or emotions lasting more than a few months. Therapists can provide guidance and support to help both you and your child navigate these challenges with resilience and understanding. Remember, you’re not alone in this journey.


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