Gyrations of the Stock Market. Inflation. Layoffs of federal workers. A possible recession.
Children can listen to their parents talking about these things and not completely understand what is happening or how they can affect their family’s finances. But if children have questions, parents must be ready to talk, experts say.
“Parents are the greatest influence on children’s financial learning,” said Ashley Lebaron-Black, a family life assistant at Brigham Young University.
Here are some tips to have conversations about money.
Children do not pay attention to the national economy, right?
The economy of the nation seemed a solid terrain at the beginning of the year, but economists expect growth to slow down in the first quarter amid the uncertainty about President Trump’s rates. Inflation has stabilized, but threatened tariffs could carry the highest prices again. At the same time, the high indebted costs are weighing households, particularly those with lower income, and more people are late when paying their credit card bills. The stock market has caused when Trump has repeatedly reviewed its rates plans. And consumer expectations for the economy in the coming months have been grated.
Parents should not assume that their children are oblivious to these issues, said Rebecca Maxcy, principal and principal researcher of the Financial Education Initiative at the University of Chicago.
It is possible that children do not understand the details, but they have heard adults discussing prices in groceries and restaurants. And they are probably listening to unknown terms, such as rates, television or online or friends at school. This month, for example, news reports discussed the possible impact of the tariffs proposed by the Trump administration on the price and availability of the new Nintendo 2 video game console, an element of interest for many children.
“It’s everywhere, it’s on your face, and children listen and see it,” Maxcy said.
Children are intuitive, he said, and can capture their parents’ concerns about the cost of living or the effect of market changes in their retirement savings or university savings.
How can I talk about money without making my son anxious?
If a child wonders how the family can be affected by changes in the economy, talking about concerns can help reduce fear and confusion, said Maureen Kelley, a financial therapist certified in Denver. “You want to keep it honest but appropriate for age.”
Instead of saying that the family may need to reduce spending, said Kelley, can try “we are being more careful with our money at this time” or “we are adjusting how we spend our money.”
Parents can emphasize any step they have taken to prepare for financial potholes, such as creating a rainy day savings, said Deana Healy, vice president of financial planning and advice with America. They could say: “Yes, things are perhaps uncertain, but this is what we have done.”
If your child asks what all this can mean for your family, it can be a “main moment” to have a conversation because that will make any possible belt adjustment more understandable, Maxcy said. “It can be said, ‘we are making some changes’, instead of saying ‘no’ all the time,” he said.
Avoid having money conversations with children when it is stressed, Maxcy said. If you are busy and are not ready to speak, let’s say you will find time to chat when things are calmer. “You may not have the conversation if you have just opened your statement 401 (k),” he joked.
Robin Gurwitch, a psychologist and professor at the Medical Center of the University of Duke, recommends addressing the subject with children, even if they do not ask, because they have probably heard about economic concerns, especially if they are on social networks.
“You can say: ‘There is a lot of talk about our economy and tariffs. I wonder what you have heard about that.'” Once parents understand what the child knows, they can address any wrong restlessness or correction.
Because some teenagers can deactivate parents’ consultations, said Dr. Gurwitch, can help address their concerns indirectly. Maybe you can ask: “What do your friends think about this?” If your teenager says that her friends are worried that they can’t buy a dress for graduation dance, she is probably also worried. Then, said Dr. Gurwitch, you can assure you that the family can pay a new graduation dress, if that is the case or, if the money is tight, discuss a budget.
The general message for children, he said, should be: “We are here to support even if things are uncertain or scary.”
John Lanza, who has written books on family subsidies and finance, said that including budget children could help them give them a sense of control.
“Children want to be part of the solution,” said Lanza.
If, for example, the goal of a home is to eat at home most of the nights instead of dinner, make it a game when making the children suggest meals and help cook them. And if you can balance it, it offers your children some of the savings as a pocket money.
What happens if I’m not sure to talk about money?
Parents may feel that they need to have all the answers, but “it is good to admit that he is not an expert,” said Scott Rick, associate professor of marketing at the University of Michigan’s business that has studied financial decision making.
If your children ask about tariffs, for example, and you don’t have enough knowledge about the subject, you can encourage your curiosity and demonstrate that you are fine to ask about money, offering investigating the subject with them.
“You could say: ‘I would like to have a better handling of that. Can we investigate it together?'” Said Dr. Rick.
Some parents can avoid talking about money with their children because they feel guilt or shame for past financial errors, said Yanely Espinal, a financial educator and an author. But it is intelligent to talk about money at home “early and often,” he said. The research suggests that parents’ education during childhood is linked to healthy financial behaviors in young adults, said the use of the responsible credit card.
How can I start conversations with my children about money?
You probably already have some resources by hand. Simply sharing a receipt after going to the store, for example, you can lead to conversations about how much things cost, said Cynthia Fitzthum, an expert in financial education at St. Cloud State University in Minnesota.
Dr. Lebaron-Black’s parents once gathered her brothers around a pile of monopoly money and told how many income they obtained each month, he said. “I thought, ‘that’s a lot,” he recalled. Then, their parents began to subtract: the amount they spent for the mortgage, heat, electricity and food. In the end, there was still a bit. But the point was made. The family’s needs were covered, but they had to spend wisely.
Reading and discussing books, including those that are not explicitly about money, can initiate conversations about why the characters make the decisions they make and how money may have played a role, Mrs. Maxcy said. For young children, he suggested “a bicycle like Sergio’s”, about a child who desperately wants a great bicycle.
Dr. Fitzthum suggests a book for students from third to fifth grade, “Beatrice’s Goat”, about a girl in Uganda who receives a goat and the impact he has on her family. Without using unstable terms, it introduces concepts such as income, savings and even opportunity costs: the economic principle that taking an choice can mean that the benefit of making a different one is lost.
Kelly Li said he had decided to write the series of “Little Economists” books for children from 3 to 8 years after becoming a mother and learning that many Americans lacked savings. (Mrs. Li, who previously worked in finance, wrote the books, with titles such as “What is money?” And “What is inflation?” – Under the last name Lee).
The Economic Education Council, which focuses on economic and financial instruction in the kindergarten through high school, offers a free financial fun package on its website with exercises that families can use at home.
