Talking to children about money

News reports about struggling households are everywhere and many children will be aware of the impact this may be having on household finances – like fewer takeaways, meals out or day trips, less (or no) pocket money, or being told to put on another jumper rather than turning up the heating.

Although it may be tempting to shield children from any money concerns you may have, it can actually help children to talk about your household finances in an age-appropriate way.

In this article we look at how you can talk to about money, in a way that keeps their anxiety levels as low as possible.

Tackle the subject head on

It’s natural to want to protect children from issues that may affect their wellbeing. But silence may actually increase children’s anxiety and lead them to imagine the worst. Being open and honest with children, in an age-appropriate way, can be the first step to ease any worries they may have.

You may find an opportunity for a conversation occurs naturally during the course of the day. Or you may decide to set aside time to talk in a more formal way, for example at a ‘family meeting’. No matter where or when the conversation occurs, it can be helpful to have given some thought in advance to what you think your child needs to know.

It may be that the children are already more aware of the situation than you might expect. Older children may be more aware of pinch points within the household finances, as they’re more likely to pick up on any conversations you may have with other adults. But younger children may also have observed changes in their routine that may be the result of a reduction in household spending.

For further support, you may want to visit the Bank of England (BoE) website. This website offers a range of age-appropriate education resources aimed at teaching children from as young as five about money, including relevant topics such as inflation.

Manage expectations

If you foresee a change to your usual spending habits, for example having less money to spend on birthday gifts or other family celebrations, it’s important to let children know this in advance.

Explaining that there may be fewer presents or that a birthday meal may be at home this year, rather than at a favourite restaurant, will help to manage children’s expectations and avoid unnecessary disappointment.

But the important thing to stress in these conversations is that a change to the usual celebratory plans doesn’t mean they can’t still be enjoyable. You could use this as an opportunity for the whole family to get creative – perhaps having a ‘competition’ to see who can make the best homemade gift, or giving a small prize for the best idea for a party game.

By involving everyone in the change of routine the current crisis may bring can help give a feeling of shared responsibility and empowerment to the whole family.

Encourage older children to help

Although children are legally allowed to work part-time from the age of 13, many jobs require applicants to have reached the minimum school leaving age (age 16 in the UK).

Encouraging an older child to look for a part-time job, if they’re able, could help reduce anxiety levels by making them feel they’re part of the solution, rather than part of the problem.

Although most parents are unlikely to ask their teenagers to hand over any hard-earned wages, having their own source of income will mean they’re able to self-fund any social plans more easily, which in turn means less of a drain on the family finances. Another bonus is that having some form of paid employment on their CV will be beneficial when they come to apply for higher education courses or their first full-time job.

Sources of help

If you’re struggling with finances, you can visit the Government’s dedicated hub page called Help for Households which details a number of ways to get help and cost of living support.

The Citizens Advice Bureau can also support with ways to get help, mental well-being advice, support from the Government and more. You can access their Get help with the cost of living page on the Citizens Advice Bureau website.