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Financial Hardship: How to Tell Your Kids Money is Tight

Experts share how parents can navigate financial hardship with their children.

The COVID-19 pandemic has had an unprecedented impact on the U.S. economy. Over 50 million Americans have filed for unemployment since March of this year. Whether you or your spouse have been let go from your jobs or you’re preparing for a potential layoff, your finances have probably changed a lot from earlier this year. Financial hardship, temporary or long-term, can take a toll on a family. Your children may be impacted by your changing finances, and you might be wondering how to communicate your new financial normal with them.

Here is how experts recommend discussing financial hardship with children.

1. Don’t overshare

“Parents should share enough about the current experiences so that a child feels informed, but not overshare to the point of your child feeling additional stress and pressure,” says Katrina Lindsay, a pediatric psychologist at Akron Children’s Hospital.

Stick to clear, brief explanations on any changes in your family spending. Be prepared to answer any questions they might have. Ask them questions to determine how much they already know. “Kids often know more than what parents think, but they often fill in the details with their own fears and understanding, which may be a lot scarier than the actual reality,” says Lindsay.

2. Keep the tone relaxed

It’s important to stay calm and keep the tone relaxed. Your child may be sad, angry or frustrated to learn that they can’t have the toy they want, take the trip that was planned or continue certain classes or sports. Explain the current financial situation to them in terms they can understand and let them know that these budget cuts are for their best interest and the best interest of the family. Things can escalate quickly but do try your best to stay calm and keep your composure.

3. Use examples your child can understand

For example, if you’re trying to explain why you’ve been furloughed to your child, you can use local businesses they used to visit. You can say something like, “Just like the toy store, mom’s work is also closed to keep me and other employees safe. This means that all the workers have to make cuts.”

4. Showcase the fun they can have

If you have to cut certain activities from your budget, highlight the tons of fun your child can still have. There are plenty of fun free activities you can still enjoy together. Let your children know you can still take hikes, visit the beach, go on bike rides and go camping. While you might not be able to buy new toys, you can rent books and video games from the local library.

The pandemic has made caused financial hardship for millions of people across the globe. If you need a personal loan you can request up to $10,000 from BrigherPays.

This post is not intended to be a solicitation for a loan. BrighterPays provides these blogs for entertainment and informational purposes only. Remember to consider all your financial options before making any decisions related to credit.