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If your child seems anxious or withdrawn when money and expenses are mentioned they could be picking up on money stress in the home. Don’t let this add to your worries! We’ve got the tips you need from leading experts to help you talk to your children about money.
Children feel money stress
When a family faces money stress, children feel it too, no matter how hard you might try to protect them. You may want to hide the truth, but this can often add to their stress. Instead, if you talk openly with them, you will be able to address their fears and reassure them that there’s a plan in place.
We chatted to wealth coach Ursula Malebo Molefe of Wellfin and Gugu Sidaki, certified financial planner and author of Nala and the 3 Piggies, to get some tips on what to share with your kids when money is causing tension.
1. Prepare for the conversation
You need to have a plan in place to deal with your financial situation before talking to your children. When you have a plan, your children will feel more confident, less stressed and less anxious because they know you are in control and can manage the situation. If you need to, chat to a financial adviser or money coach – or even your bank – to help with this step, and work out a debt payment plan if you need to. Also, consider talking to family, friends and your school so that they understand your circumstances and can avoid putting extra pressure on your children, such as expecting them to attend expensive events and concerts.
Then, think about what you are going to tell your children about your financial situation. Prepare for any questions they may have and make sure you share age-appropriate information. Teens will be able to understand a budget, for example, whereas younger children just need to be reassured you are in control of the situation and they don’t have to worry about food, clothes or having a roof over their heads.
2. Talk to your children about your money situation
Be honest about your financial situation, but don’t overwhelm your children with too many details or scare them. This can be as simple as “We have a bit less money this month so we won’t be able to pay for x, but we will have enough for y.”
“Don’t try to hide or mask the situation, or sacrifice some expenses or go into debt to meet your children’s demands,” says Ursula. “Be honest with them so they know what you can and cannot afford.”
3. Involve your children in the budgeting process
Let your children help you with your budget or explain to them how it works. Gugu says this will help them understand how much things cost – and how the costs add up.
She says this is also a good time to explain the difference between needs and wants, and why needs are always prioritised. If you are cutting costs, you should explain which costs are cut, by how much and why, including any allowances such as cash or paying for items such as data.
“Don’t forget to reassure them that they won’t go to bed hungry or have to do without a roof over their head or give up school,” Gugu says.
Older children may also be able to come up with some savings tips or ideas for cheaper entertainment options!
Ursula also suggests getting your older children to work out their own expenses for the month, so they learn how to budget and what happens when the budget is not followed – there is no more money until the next month!
4. Encourage saving for items that cannot be purchased today
Both Ursula and Gugu say one of the most important money lessons we should teach our children is the concept of delayed gratification. This is waiting for something rather than having it immediately, such as saving for an expensive branded phone rather than using credit to buy it.
“Children can be very demanding, especially teenagers,” says Ursula. If they demand something outside the budget, explain that it is unaffordable now, but can be saved up for and draw up a plan for how to do this. “This teaches children that they can save for something they want, and helps them avoid debt when they are adults.”
5. Help your children deal with any money stress they may face outside the home
Children will feel a change in their circumstances and may face peer pressure at school or when they are with friends and family. Give them some responses they can use when money issues arise, such as: “My parents are on a cost-cutting drive at the moment so we aren’t spending a lot of money,” or, “We’re keeping to a strict budget at the moment and are limiting our outings.” Let them know that they can talk to you about the pressure they feel so you can come up with solutions and responses.
6. Talk to a professional if you need help
If you are struggling to find financial harmony in the family you can also speak to a counsellor, such as the services available on SADAG (South African Depression and Anxiety Group) and Childline (for children). Your GP may also refer you to a counselling service.
Your children are part of your family, involve them!
Include your children in your money discussions, but always let them know the situation is under control. And don’t be afraid to ask for help if you need it!
“You must prepare your children for the real world,” says Gugu. “The more equipped they are regarding money, the higher the chances of them managing their money effectively. This reduces the financial strain on you, as the parent and on society at large. We must teach children about good financial habits as well as teaching them about other values such as good manners and good personal hygiene.”