How to Explain a New Financial Norm to Your Kids
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COVID-19 has left many families in a very different place than they were at the beginning of the year. Lay-offs, job furloughs and childcare changes have put a burden on families around the world. As we see the extra $600 in unemployment benefits come to an end, this burden is only going to increase.
As your local credit union, we’re doing what we can to help our community through this time. Learn more here. Plus, check out these articles to help you navigate some of the issues we’re all facing:
- How to Save Money, Even During a Pandemic
- 4 Ways to Invest During COVID-19
- 12 Inexpensive Staple Foods to Add to Your Grocery List
- 101 Financial Lessons Straight From Our Members
These circumstances have left many parents struggling to explain not only the impact COVID-19 is having on their social life but also what it’s doing to their finances. You may be experiencing questions like:
- Why can’t we buy new clothes like we did last year?
- Why aren’t we going on vacation? You promised!
- Why are we having to move in with Grandma and Grandpa? I want my old room back!
- Why can’t I have a big birthday party like I did last year?
You may be tired of answering questions like these and more. You may struggle to convey to your children the challenges and changes needed to move forward. There’s a delicate balance between honesty and burdening your children with a responsibility they can’t help shoulder right now. Let’s look at a few tips on how to handle the conversation:
- Share age-appropriate information. Depending on the age and maturity level of your child you’ll want to tailor the information to what they’ll understand. If your children are young, they may need to feel more secure and hear examples of simple steps you’re taking to make frugal choices. Plus, you can talk to them about their role in helping you do that. But, if they’re teenagers, you may need to share more of the “why” you’re making certain money decisions. They may not like the decision you’re making but if they understand the reasoning, they may be more willing to help instead of complain. Read more tips here about helping your kids of any age cope with the changes caused by COVID-19.
- Be honest with them. Now, you don’t want to scare them, but it’s important to help them understand why things are changing in your family and in the world. They’re going to have questions, so be prepared with honest answers, even if you’ve decided it’s best not to give them all the details. Dave Ramsey suggests not covering up financial challenges or failures. How you’ve handled money in the past can help prepare your children for how to handle their money in the future. That still stands even in the pandemic. Help them understand the importance of concepts like an emergency fund, savings, budgeting, etc.
- Don’t pass the family’s financial burdens on to your children. Now, we did just say to be honest, but there’s a delicate balance to be kept here! This article recommends to maintain the parent/child relationship and not look to your child as a confidant. They won’t have the big picture answers you’re looking for, so focus on helping them feel secure, even in uncertainty.
- Use this as an opportunity to teach your children about managing money. For instance, get them to help you at the grocery store. Talk to them about budgeting and how when you change jobs or big purchases come up, that’s when the budget changes too. Brainstorm with them on how you can save money as a family. Their ideas might surprise you!
- Don’t promise things you can’t predict. Wendy Mogel, a clinical psychologist, says if you’re not sure you can deliver on something then don’t promise it. Go back to point number two, be honest. None of us know what the next year will look like. One thing for certain is that it will look different. Making promises you can’t keep will only frustrate you and your children when they don’t come true, for example: “you can go to camp next year” or “when this is all over in a few months we’ll all go on a big vacation”. Instead look for small positive promises you can make. Can you have a movie night in the backyard? Can you promise to teach them something new? Can you carve out a specific time this week to do something special with each child? They may be short-term promises, but these are promises you know you can fulfill, which builds trust and anticipation with your children.
- Practice gratitude and looking for the good. Help your children find things they’re thankful for each day. This helps them shift their focus from the things they can’t do to the things they still can. It’s a good practice for the whole family, try to make this a regular part of your routine.
Talking about financial challenges with anyone, much less your children, is a challenge in itself. But, it’s necessary for the emotional/mental health of your family to not ignore what’s happening. Help your children understand the why and the steps you can all take to work as a team at this time.