How to Talk to Your Children About Money in These Uncertain Times

The current state of the stock market, inflation, potential recessions, and layoffs of federal workers are all topics that children may overhear their parents discussing. However, children may not fully understand the implications of these discussions on their family’s finances. Experts suggest that parents should be prepared to have open and honest conversations with their children about money matters.

According to Ashley LeBaron-Black, an assistant professor of family life at Brigham Young University, parents play a crucial role in their children’s financial education. Here are some tips for navigating these conversations:

Are children aware of the national economy?

While children may not be directly paying attention to national economic issues, they are likely exposed to discussions about tariffs, inflation, and market fluctuations. It’s important for parents not to assume that their children are oblivious to these matters, as noted by Rebecca Maxcy, director at the University of Chicago’s Financial Education Initiative.

Children may not comprehend all the details, but they are absorbing information about prices, tariffs, and economic challenges from various sources. It’s essential for parents to address any concerns their children may have about the family’s financial situation in an age-appropriate manner, as suggested by Maureen Kelley, a certified financial therapist in Denver.

Parents can alleviate fears by discussing the steps they are taking to navigate financial uncertainties, such as building a rainy-day savings fund, according to Deana Healy, vice president of financial planning and advice at Ameriprise.

When children inquire about how economic changes may impact their family, it presents an opportunity for parents to have a constructive conversation. It’s crucial to avoid discussing money matters when stressed and instead find a calm moment to engage with your child, advises Robin Gurwitch, a psychologist and professor at Duke University Medical Center.

Dr. Gurwitch also recommends initiating discussions with teenagers indirectly by asking about their friends’ perspectives on economic issues. This approach can help parents address their children’s concerns and correct any misconceptions they may have.

The key message to convey to children is that their parents are there to support them, even in uncertain or challenging times. Involving children in budgeting decisions can empower them and give them a sense of control, as suggested by John Lanza, author of books on allowances and family finances.

It’s okay for parents to admit when they don’t have all the answers about money matters, according to Scott Rick, an associate professor at the University of Michigan’s business school. Encouraging children’s curiosity and willingness to learn about financial topics together can foster a positive attitude towards money discussions.

Parents should not shy away from talking about money with their children due to feelings of guilt or shame. Open conversations about finances at home, starting at an early age, can instill healthy financial behaviors in young adults, according to Yanely Espinal, a financial educator and author.

To initiate discussions with children about money, parents can utilize everyday experiences, such as sharing a receipt after shopping, to introduce concepts of cost and budgeting, as suggested by Cynthia Fitzthum, a financial education expert at St. Cloud State University.

Using resources like books and educational tools can make learning about money engaging for children. Stories like “Beatrice’s Goat” and the “Little Economists” series can introduce financial concepts in a relatable and understandable way.

The Council for Economic Education offers free resources for families to use at home, promoting financial literacy and responsible money management from an early age.