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The Importance of Talking with Your Kids about Finances When Times are Tough

By July 31, 2020September 2nd, 2020No Comments

The Importance of Talking with Your Kids about Finances When Times are Tough


The recent news on job loss is staggering. Unemployment rose higher in three months of COVID-19 than it did in two years of the Great Recession. According to the Pew Research Center, the unemployment rate is higher than officially recorded, more so for women and certain other groups. If you think those kinds of headlines are frightening for you to read as an adult, imagine the impact that your financial insecurity has on your children. I feel strongly that parents need to be honest and straightforward with our children, at an age-appropriate level, when it comes to our feelings about money.

I had an opportunity to share my thoughts on speaking to children about finances during these difficult times with Gabrielle Olya for In her article, 10 Reasons Why Talking To Kids About Money Is More Important Than Ever, Olya details why we need to have honest conversations with our kids about money. 

It’s very important for parents to discuss financial issues, especially difficulties, with their children. For one thing, kids of all ages know we are in unusual times and most want to talk about it. If you are also having personal financial difficulties, most kids by middle school-age, are going to know that something is up with you. Many will blame themselves or others for your increased stress level.

Kids could likely see the impact of job loss in real time, within your household or even parents of friends and family members. It can be an opportunity to discuss the “we are all in this together” motto that can help make cutting back on expenses a family affair, and also allowing them to be part of figuring out where the household can save on costs. If you don’t discuss it, it can lead to all sorts of anxieties around money. And, lessons learned during these difficult times can help kids and their parents have a healthier relationship with money when times get better and when the kids grow into having their own families.

 As for how much or what exactly you should discuss, it depends on their age and maturity. For younger kids, you can speak more generally and say that there’s more uncertainty than there usually is with your job or income or investments. For older kids, you can also let them know that tough times will come and go and that we all have to face those tough moments in our lives. Tell them you are facing them now and trying to come up with the best solution you can. Be honest, but balance it with good news around finances, like how people are coming together during a time like this to help each other.

 Teach them that tough times aren’t something that can be totally avoided, even for adults. If they see you addressing your difficulties head on, being open and honest and willing to talk about them, you are providing them a great lesson. If parents have these conversations about financial implications, it can help kids take back a sense of control. It will be much easier for them to confront their own financial crises as they get older.

In the short run, if your difficulties lead to changed life circumstances, let your kids know what they are. If your kids have a heads up that something may not be right, again, they will be better able to handle it and might even be able to help the family figure out a solution together. Not addressing things with them will make matters worse, and things are already bad enough for a lot of folks and their children.

Please contact us if you’d like to discuss your financial plan. As always, hang in there. 

My name is Mike Garry, and my company is Yardley Wealth Management, LLC. We are a fiduciary, fee-only financial planning, and wealth management firm in Newtown, Pennsylvania (that’s in Bucks County).

Our law firm is Yardley Estate Planning, LLC and is in the same place. We only do Estate Planning work and I am licensed in Pennsylvania and New Jersey.

If you’d like to talk about this or anything else, please reach out: 267-573-1019, [email protected] or @michaeljgarry

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Michael Garry Yardley Wealth Management

Author Michael Garry Yardley Wealth Management

Michael Garry is a CERTIFIED FINANCIAL PLANNER™ practitioner and a NAPFA-registered Financial Advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

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