A drop or loss in income can be a scary and unsettling situation for your family. Kids, in particular, can sense the tension in the family and may feel insecure. As such, it is important to talk through the situation with them as soon as possible. Attempting to talk about family financial difficulties is will help in the long-run.
However, this is easier said than done. Most parents don't share bad financial news with their kids because they don't want to stress them. But that may be a big mistake.
By sharing your financial experiences with your children you prepare them mentally for challenging times ahead and allow them to learn. If you find it difficult to share, here are a few tips to help you.
Pick The Right Time to Talk About Family Financial Difficulties
Make sure you pick the right time to tell your kids about family financial difficulties. If one of them has a bad day, they may find it difficult to receive the news.
Pick a relaxing day when everyone is in a good mood. Perhaps on a weekend or when you go out as a family.
Tell Them Why
Most parents often leave out why they got into financial challenges. But if you want to get your kids on board, you must open up about it. The last thing you want is for your kids to keep guessing or repeating the same mistake in the future.
Also, it is wise to say what you're doing about it. So if you lost your job or business is not doing so well, tell them you're looking for another job or exploring ways to boost your business. Kids don't need to know all the details, but they love to know you're addressing the issue.
Inform Them About Spending Changes
The best ways to address family financial difficulties are to increase income or reduce spending. So if you plan to cut spending that affects your kids, let them know in advance. For instance, you may plan to cut back on clothing, entertainment, eating out or entertainment.
When informing them about these changes, present them as a solution and not unfortunate repercussions. Tell them their cooperation is a great way to help the entire family.
Allow Them To Participate In Creating The Family Budget
Letting your older children help in budget creation allows them to see how far your income can stretch. It also allows them to see the real value of a dollar. It might make them appreciate any money given and learn to spend wisely.
Bring In A Financial Expert
If you feel that the subject is too heavy for you, bring in a trustworthy financial expert. This is someone who can help you set the ground rules and keep the discussion on track.
Having a financial expert also allows your kids to take the discussion more seriously. This way, you're less likely to engage in blame games since everyone will be heard.
Set Family Goals Together
After talking about the financial challenges, set family goals together. Let your children contribute.
Use this time to remind your kids that these goals need sacrifice. Explain to them how missing a road trip or a few days of eating out will affect their future.
And if you set saving goals, make sure you celebrate with your kids when you achieve every milestone. That way, they will feel that they're contributing to your financial success.
Talking about financial challenges with your kids can be difficult. However, it is important to do so to avoid giving them too many expectations or stressing them when you cut certain expenses that affect their lifestyles.
Remember, to keep the discussion simple, honest and engaging. Someday, the discussion will help them make smart financial decisions.