Thursday, 23 August 2007

What to tell the kids if your family is in financial hardship?

Recently I did a guest post over at The Happy Rock about raising financially savvy kids . I want to explore one of the points a bit further. In that article, I wrote

Be upfront with them - Don't colour the family financial situation for the kids as this may bring up false expectations in the kids. You know, if the family can't afford to go on the big holiday this Christmas, let them know and the reasons why. Or if the big holiday is happening due to strong financial commitment from family, let them know that as well.

I have been thinking about this point today as I was watching son play with his toys. If we were in financial hardship, how would I let him know? I don't think I would not tell me about it, and I definitely not lie to him and tell him that everything is OK. It would him give a false sense of security, and if the financial hardship were to become something worse, the situation would be hard on his emotions.

I think I approach it in the following manner.
  1. Tell him that we will be short on money over the few months, and explain to him what it means to our lifestyle. The language that I would have to be suitable for my son's age.
  2. Show him some of mum's and dad's activities that will be changing.
  3. Allow him to select some of his activities that will be changing.
  4. Allow him to contribute in a positive manner towards the good family life.
  5. Most of all, I would show him a plan that would get the family out of the financial hardship. This would give him hope.
There many other ways to approach this situation, and will largely depend on the family dynamics and the relationships between the family members.

How would you approach this if you were in this situation?


4 comments:

Anonymous said...

The most important thing is not to lie. If you can't afford things or you need to cut back then don't lie about it. Its not about protecting your kids now, its about bringing them up so that they have a better life (and fewer debts) than you hae.

Andy said...

You share everything which affect your family. Kids needs to learn about financial realities and be prepared.

check out my blog at : ozfinance.blogspot.com. I will be recommending yours there.

Andy

John said...

I agree that it's important that your kids understand if things are going to be tight. I think it's most important that the child see that the parents are making sacrifices. As we all know, they do what we do, not what we say. BTW...I'm the creator of "The Money Mammals," a show that teaches young kids 2 and up about the value of money, www.themoneymammals.com.

Anonymous said...

John, great comment. As a parent of a 2 year old, I totally agree with that observation of they kids understand actions rather than words.

thanks for letting me know about "The money mammals". I shall check it out.