Talking To Your Kids About Tough Financial Times

By Diane Lang

With the economic uncertainty and the threat of fiscal cliff repercussions paired with the high unemployment rate, your child/teen may be stressed or worried.

Even young kids watch TV, go on computers, and listen to their parents, peers and teachers. Elementary age kids can’t understand the meaning of a recession, but they can understand that the economy has its ups and downs. Middle school and older kids can more fully grasp the impact of the current financial worries. Today’s challenging economic times have everyone, including kids, on edge.

Signs of stress in children/teens can create changes in eating habits, sleeping habits, academic grades, and loss of interest in hobbies and/or leisure activities. Physical signs can include stomachaches, headaches, and low immune system/frequent illnesses. If a child internalizes his stress/worries he can become depressed and have anxiety disorders. Kids can have panic attacks too.

Talking with your children and helping them understand the national and family situation can go a long way to reducing kids’ stress levels.

Tips for talking to your children about tough financial times:

It’s okay to talk to your children about finances. Discuss how you make financial decisions in your home. Be empathetic to your child’s feelings.

Provide reassurance – even if you are worried about the financial future of your family watch how you express your fear both NON-VERBALLY & VERBALLY. Kids learn through imitation and role modeling. They may not understand what a recession is, but they can sense fear and stress. If they see you’re worried and stressed, they will feel the same way.

Age does not equal maturity – an age/number doesn’t mean a child is mature. The more mature they are, the more they can handle.

Don’t ever lie to your kids. When you lie, you are teaching your kids its okay to lie! Instead, be honest, clear, simple and concise.

Examples:  Dad is losing his job. I wish he wasn’t, but his company is going out of business or Dad is losing his job, but it’s okay because I work full-time and we have savings.

Then express what is good and safe in their life – love, family, friends, good community, etc.

Normalcy – try not to make drastic changes or big changes in their schedule. Keeping everything as normal as will keep the fear level down. If you do need to make drastic changes in the kid’s lives, follow these steps:

– Change one thing at a time

– Let the children be involved in what changes they have to make. If they can only keep one extra school activity or sport out of three, let them pick the one they want.

Tell the kids what you’re doing to make the situation better: looking for a job, collecting unemployment, taking on more hours at work, or you have a good savings. ALWAYS STRESS THAT THIS SITUATION IS TEMPORARY!

It’s good to use past experiences or real life experiences from your family on how you have dealt with difficult situations before.  

Q&A – let your child express their concerns and ask questions. Don’t dismiss them – answer them as honestly a possible. Allow your child to express his or her concerns about the changes and how they feel. As a parent explain that you have to make changes and sacrifices as well. Example: I wanted a new outfit for work, but due to our budget I couldn’t get it. This will show the child that the new rules/budget is for everyone

Don’t send mixed messages – don’t say you can’t buy or afford something for the kids and then buy it out of guilt. This will confuse the kids. They need consistency. As a parent/role model don’t use such phrases as: I want ___ or I wish I had____.  Don’t be too materialistic or try to “keep up with the Jones’s.”

Altruism – teach your kids to pay it forward. Teach them about volunteering/charity. Volunteer as a family is a good way to spend quality time together. Spend no money and be a good role model. Helping others is a key factor to happiness. Example: Meals for wheels – the whole family can drop off meals at senior centers or homes.

Frugal is not a bad word. Teach your kids about abundance. Kids should have abundance of love, affection, quality time with friends and family, etc. Frugal does not equal cheap. Example: We want to save gas and electricity so we have oil left for the next generation. We want to recycle to protect the environment. We garden to have fresh veggies because it tastes better and is healthier for us – no pesticides or chemicals. Teach your kids to live an abundant lifestyle filled with fresh air; quality time with loved ones; a good, safe location/environment and lots of fun and smiles.

If you see your child is extremely and/or chronically stressed or showing signs/symptoms of anxiety and/or depression like irritability, mood swings, sadness, isolation, changes in grades, changes in the desire to go to school and see friends, participate in activities, change in sleeping and/or eating habits, get outside help and/or tell your school counselor.

This article was written by Diane Lang, therapist, educator, life coach and nationally recognized author. Check out her website!


Diane Lang – Positive Living Expert and psychotherapist – is a nationally recognized author (Baby Steps: The Path to Motherhood to Career and Creating Balance and Finding Happiness), educator, speaker, therapist and media expert. For more information visit


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