Many families have had to make difficult financial decisions since the pandemic hit, or at least ones that are different from those they usually make. And while these choices may make sense to grown-ups, for kids they can be downright confusing.

If you're a parent, chances are good you’ve heard questions like, why do we have to cancel our vacation? Is Mom or Dad going to lose their job? Why aren’t we buying the things we normally buy? The truth is, this is different from anything kids — and most adults — have ever experienced. When you’re answering your kids’ hard money questions, consider these tips to help guide these challenging discussions and turn them into educational moments for your children.

BE AWARE THAT KIDS HEAR MORE THAN YOU THINK

“Little children can have surprisingly large ears,” says financial therapist and author Maggie Baker. “They often pick up on more than we give them credit for.” That could happen while they’re hearing a conversation adults are having in the next room, a newscast that’s on in the background, or something more subtle like reading a parent’s emotions after they open a bill. “Children are always listening, absorbing information, and processing it as a function of their age, their relationship to their parents and their own unique personality,” Baker says.

BE TRUTHFUL

The most honest of parents may find themselves lying to their children when confronted with one a challenging question. We all want to shield our kids from anxiety and stress, but Baker says doing this will often have the opposite effect.

“Children are very skilled at picking up on discrepancies,” Baker says. “Even if you keep your story straight 100 percent of the time, a child knows when something is amiss. If you tell them that there’s nothing to worry about but your body language betrays the truth, your child is going to notice, even if they can’t articulate what’s happening.”

That’s why it’s so important for parents to answer kids’ questions truthfully. You can, of course, be selective in the details that you share but, “the last thing you want is to be caught in a lie, which could destroy your child’s trust in you,” she adds.

UNDERSTAND YOUR OWN RELATIONSHIP WITH MONEY

Each of us has a unique relationship with money, which was likely forged during childhood and early adulthood. Those who lived through the Great Depression (1929 to 1933) and the Great Recession (2007 to 2009) tend to be more frugal and debt-averse than generations who grew up with prosperity. Those early experiences influence how we talk to our children about money.

Baker says understanding this will help you regulate your emotions so that your body language will reflect your message. “For example, imagine that your child asks you how the family is going to be able to pay the mortgage now that you’ve lost your job,” Baker says. “If you tell them that everything will be all right, that’s all fine and well. But if you say it through a clenched jaw or with sweat dripping from your forehead, your child is going to notice. Your non-verbal communication will contradict the verbal message you’re trying to convey.”

TAILOR YOUR MESSAGE

Baker advises customizing your conversation along these age categories: under 5 years old, 5 to 10 years old and teenagers.

For the youngest kids, Baker recommends being straightforward and comforting, and only offering necessary details. A 4-year-old won’t understand the concept of a mortgage, for example, but knows in a limited way what a bank is.

The middle age group, meanwhile, “is more capable of abstract thought,” she says. For children in this age range, you can offer more detail. Ask your child if they have questions as you go, so that they understand that this is a discussion and not a lecture.

“And then, of course, teenagers are very capable of understanding the content of what you say,” Baker says. “They’re also more likely to push back and question your message — that’s just what teenagers do.”

Parents should offer as much detail as their teen will understand, but be prepared for some defiance. “All children, regardless of age, need to understand that what’s happening isn’t their fault, that you have an action plan to make things better and that, at the end of the day, their needs will be taken care of.”

ACKNOWLEDGE YOUR FEELINGS

While answering your children’s questions, there’s no harm in acknowledging your own emotions, Baker says. In fact, that can even help facilitate a more honest and open discussion, particularly with teens. If you’ve lost your job, you can start by admitting that you’re sad about it. But perhaps follow that with saying you’re also thankful because you’ve got savings to rely on and unemployment benefits to help you get through this.

“Being honest with your child about your emotions as they relate to money, even in challenging times like we’re facing now, can help them develop their own healthy relationship with money,” Baker says. “And that’s an important part of everyone’s life.”

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