Families go through money trouble for different reasons. Maybe there was a job loss, an illness, or some other unexpected expense. Whatever the reason, pretending that children don’t notice money problems can be harmful. For example, it may cause them to have an unhealthy relationship with money later on. Luckily, there are ways to talk to young children about money troubles in a way that is both honest and age-appropriate.

Here are some tips.

Choose the Right Time

There’s a wrong time to try to have a conversation with children. In the middle of bath time when they’re distracted by how bathtubs work or at bedtime when they’re tired from a long day of playing for instance. 

You want a time that’s quiet and relaxed, where you can be sure they’re paying attention. The best times for this include after homework, during family dinner, or on the weekend.

Keep It Simple

When you’re explaining money trouble to children, it’s important to keep your language simple. They likely won’t understand terms like “laid off,” “downsized,” or “unemployment.” 

Instead, focus on explaining what’s happening in the present. For example, “Mummy lost her job, so we’re going to have to stop buying a few things for a while.” Or “We’re going to have to postpone our family vacation this year because we don’t have as much money.”

Focus on the Positive

Even if times are tough, it’s important to focus on the positive when explaining money trouble to children. There’s no need to go into detail about every single money worry you have. Just explain what’s happening in a way that’s reassuring by putting a positive spin on things.

For example, try saying “I know we’re not going to be able to go out to eat as much as we used to, but that just means we’ll get to make our own yummy food together.” Or “I know you’re disappointed we can’t go shopping for new toys right now, but we can plan a fun day at the park instead.”

Encourage Questions

After you’ve explained what’s going on, encourage questions from your children. This shows that you’re open to talking about the situation and that they can come to you with any concerns they have.

You can even put a fun spin on the question-asking portion by turning it into a game. For example, you can say “I’ll answer three questions about our money troubles and then you have to answer three questions about your day.” This helps take the focus off of the negative and encourages conversation.

It’s important to be honest with children about money troubles. However, it’s also important to choose the right time, keep the explanation simple, focus on the positive, and encourage questions. By following these tips, you can help your children understand what’s going on in a way that is both age-appropriate and reassuring.