Should You Talk to Your Kids About Money Troubles?

Experiencing money troubles is common for many families, and you may be wondering if you should share these challenges with your children as you face them. Although it's important to be open and honest with kids, experts say to balance your truthfulness with appropriate caution.

"While you don't want to burden a child with adult-sized problems, kids pick up on stress. So pretending things are great when they're not isn't helpful," Amy Morin, a psychotherapist, host of The Verywell Mind podcast, and the author of 13 Things Strong Kids Do: Think Big, Feel Good, Act Brave, tells Parents. "It's healthy to share the situation with kids so they understand what's going on, but it's important not to give them more information than they can handle."

Here's how to share details of money woes with your children—without oversharing and causing damage.

Try not to rattle off a list of overdue bills; instead, present relatable ways kids can be part of the conversation.

"When it comes to financial stress, it's often appropriate to talk about what you're doing with your money, rather than what you can't do," says Morin. For example, she suggests telling your kids that you're saving your money to pay the electric bill—rather than telling them you can't afford new sneakers.

Next, Morin advises parents to share with children what steps you're taking to address the situation, such as, "I'm working extra so we'll have a little more money," or "I'm meeting with some people who are going to help us pay the rent this month." 

If you're setting a budget and prioritizing expenses, share this strategy with your kids.

"You can communicate the plan with them so they know what to expect," adds Morin. For example, she suggests you might say, "We're not going to spend money on things we don't need this month. But we can still have fun by doing things that don't cost money, like going to the park or playing games."

Although it's OK to be straightforward and share that you're curbing some expenses and re-prioritizing spending, try your best to comfort your child's concerns.

"A healthy message involves a simple explanation of what kids can expect and some reassurance that the adults have it under control," Morin says. Morin recommends that some conversation-starters could be: "We're working hard to pay our bills. But for the next few weeks, we won't be buying any extra clothes or eating out." Morin says children feel safe when you acknowledge the stress but reassure them that the adults are handling the situation.

Refrain from allowing them to experience or witness upsetting exchanges.

"You don't want them overhearing an argument about money or hearing a voicemail from an angry landlord threatening eviction without any type of explanation," says Morin. "Kids will often form their own conclusions based on what they see and hear. So if you don't give them a simple explanation, they may fear the worst."

Address your conversations delicately, and consider the age of your child. Morin suggests the following age-dependent ways to approach your kids with money troubles.

Keep everything positive. Morin reminds parents that kids this age don't yet understand the concept of money and how it's earned or spent.

Morin says kids this age can handle simple explanations about how you're saving to pay certain bills, or how you're using your money to buy the most important things only.

Morin says tweens can tolerate more detailed conversations about the financial situation. You might tell them that you're not able to afford certain brands of clothing or trips to restaurants because you need to pay for the necessities first. You can also be open with them if you get assistance from others. 

Morin says teens are the easier ones to talk with about money troubles. Teens can learn the value of money by having conversations that teach them what things cost. You might turn it into hours worked, for example; explain how many hours you work to buy groceries or how many hours you work to pay the electric bill, she says.

While you don't want to make your teen(s) feel guilty for how much they eat or how much electricity they use, Morin suggests it can be helpful for them to realize that it takes a lot of effort to cover the basic expenses. She further adds that this may help them see that you're not saying no to things because you don't want them to have those things; rather, you just don't have the money as a family.

Don't overshare with your children the worst possible outcome for your family's money troubles. "Try to avoid catastrophizing, meaning introducing 'worst-case scenarios' or how the situation could potentially be worse," Jennifer Weber, PsyD, director of behavioral health for PM Pediatrics Behavioral Health, tells Parents. Also, she says, try to avoid comparisons with other friends or family.

"Children are generally egocentric, which is not selfish but rather normal developmentally," Dr. Weber explains. "They are worried about how changes will impact them and how their needs will be met. It is usually best to only address finances when the child will be directly impacted in some way by the financial change or situation." With this said, Weber advises parents to be concrete by focusing on what will stay the same and what the child can expect to change.

"This allows your child to ask questions you can then answer specifically," Weber concludes. "By answering just what they ask, you can avoid potentially creating more anxiety around the situation for them—and for you."