You may not want to have this conversation with your kids, but it’s better that it comes from you rather than someone else.

How to talk to your children about financial problems?

When you and your partner are going through financial troubles, the last thing you may think about would be to talk to your children about it. But that’s where most parents go wrong. The thing about financial issues is that it creates a sort of tension in most households that children are quick to pick up on. If they hear things in hushed voices or even witness fights, they may assume the worst and panic. 

On the other hand, your kids may be completely oblivious of the situation and keep demanding things that you just can’t afford just then – such as a new phone or an expensive dance class. Instead of simply telling them ‘no’ despite their repeated pleading, it’s prudent to sit down and have a conversation with them so that they realise what’s really going on. Here’s what to keep in mind:

Consider your child’s age

Talking about money to a really young child, say 7 or below, is unnecessary. They won’t understand any of it and it will only confuse them. However, with older children, it might help. In addition to age, you should also consider your child’s maturity. Some 12-year-olds can be more mature than some 16-year-olds. 

You should also consider their current state of mind. Are they already stressed or upset about something? Are their exams approaching? You should be careful about when you have the conversation.

Related: When is a good time to teach your kids about money

Tell them the truth

Being honest with your children about money helps make things easier for you in the long run – because when they know money is tight, they won’t ask to be sent to that fancy summer camp or expect to be thrown a fabulous birthday party.

Additionally, when you adopt the policy of being transparent with your children, you teach them that they can be honest with you about everything, and this will help you with parenting over time.

Don’t scare them

Tell them if you or your partner have lost their job, or if you have debt to pay, or if an unexpected major expense has cropped up. However, don’t scare them into thinking that it’s the end of the world. Explain what your plan is and how you’re going to overcome this hiccup as a family. 

Be optimistic, and if they see that you’re not too worried about it, they won’t be either. Be mindful of the language you use. Don’t use words like broke or poor because they may develop an unhealthy attitude to money that can harm them when they grow up. 

Related: Are you setting your children up for a stable financial future?

Don’t blame or fight with your spouse

While your children need to know what’s going on, they don’t need to see you and your husband fighting over money. Even when talking to your children about money, make sure that neither of you plays the blame game. An argument will only make the kids worry about two things instead of one and add unnecessary stress to their life. Irrespective of your personal conflicts on money, when you talk to your children, you should both maintain a united front. 

If you can navigate this difficult conversation with your children while keeping these points in mind, you will be surprised to see how mature your kids can be. Ultimately, you are in it together as a family, for better or for worse. Here's a mother's guide to raising financially responsible children