Teaching Kids About Money in Tough Economic Times

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My heart goes out to families that are struggling financially. Other than a death or an illness, a financial crisis is one of the most difficult events a family could experience together; however, it can be turned into an opportunity for your family to grow closer together, learn new financial skills and experience new adventures together.

In my experience working with families in my Insurance and Financial services practice for the past 24 years, it’s best to handle a crises proactively by sharing “age appropriate” information with your children about your financial situation. However, be sure to share a positive plan on how you’re going to come through this experience stronger as a family.

Here are the steps I suggest:

  1. Teach your child (children) that this financial problem is only temporary and that by being proactive your family will overcome this current difficulty.
  2. Reassure your children by telling them how much you love them and that the financial problem is not their fault. Children internalize the financial struggles of their parents, so it’s very important you do not make them feel guilty for asking for money or things and it’s especially important you don’t make them feel responsible for your family’s financial struggles.
  3. Develop a plan of action on how you are going to overcome your current situation and then share with your children the steps you are going to take to get back to living a prosperous life. Get them involved. This is an opportunity for you and your children to learn or relearn financial skills. See my recent blog article on teaching kids about Goals and Money for more information.
  4. Now comes the fun part. When a family is under financial stress their lifestyle is going to change. This is an opportunity for you to rediscover that “the best things in life are free.” Instead of going out to a restaurant or pizza place, teach your kids how to make a pizza. Instead of buckling under the pressure to buy your child a new video game, make a play city out of boxes and other things you find around the house. Instead of telling your children you’re not going on family vacation this year, take them to one of the parks in your area and spend time in nature. Do you have teenagers? Invite their friends out on a hiking adventure. It may be a little tough getting teens on board, but once they have a few positive experiences you will find most teens want what we all want, love and attention. The cost: free.
  5. Know the signs of depression and anxiety. A financial crisis can be very stressful and you have to be aware of the signs of anxiety and depression in your children, your spouse and yourself. Seek professional help in dealing with the emotional impact of a family financial crises. The United States Department of Health and Human Services has a good resource at this website address: http://www.samhsa.gov/economy/.

There is hope! By applying solid financial principles and strategies, a little time and patience, you will overcome your current financial struggles. You will be stronger as an individual and as a family. You can use this time to teach your children one of the most important lessons of their life, that money is not everything.

As someone who had a young family at the age of 17, I know a little about what you’re going through. I followed the advice above and it worked for me. I think it will work for you, too.

Jack Vincent teaches you how to avoid the 17 pitfalls that lead to financial slavery and how to use the 23 principles that lead to wealth and prosperity. His book, The Way to Wealth Special Edition, is an updated, easy-to-read, modern day version of Benjamin Franklin’s, The Way to Wealth, originally written in 1758. His book has the practical wisdom you need to build wealth and gain financial freedom!


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