Keep Your Family Informed.

Debt and other financial difficulties can take a significant toll on your personal well-being. However, if you have a family, that toll only becomes heavier. You worry about providing for your family members, and you worry about their happiness. They will notice your stress, and they will notice that you do fewer activities and give fewer presents. The financial hardship will get to everybody. And while your spouse may understand, your children may not. Below, we have given you a brief guide on helping your children cope during this difficult time.

Young Children (Ages 1-9)

Younger children have little to no life experience, which means they may assume that you have an endless supply of money, treats, and presents. As the adult, you must have supernatural powers that provide all these things. You have all the knowledge and all the power.

Since children often think of you and themselves as invincible at this age, they may not fully comprehend when you tell them about your financial situation. They may cry when you explain that you cannot buy them the toy they want. However, you will get through to them eventually if you take the following steps:

  • Sit down with them and explain (using words they will understand) exactly what has happened. Did you suffer a setback at work? Tell your children about it. You should also disclose if you lost your job, if sudden expenses came up, etc. Remember to explain what this means for the family: fewer activities, presents, and treats.

  • Every time your children ask for something, remind them about the situation. Even if you feel embarrassed, you still need to remind your children, even while in public.
  • If your children scream, cry, or yell about wanting something, don’t yell back. Volume won’t get through to them, but repetition will.
  • Offer rewards for good behaviour, if necessary. These rewards shouldn’t cost money. Make them things like story time, playtime at the park, etc. Make them experiences rather than objects, and keep the rewards simple.

Don’t expect your children to fully understand the situation right away. It may take a few weeks or months for them to comprehend, especially if financial disaster strikes around Christmas or a birthday. Exercise patience and empathy as you help your children through this difficult time.

Older Children (Ages 10-17)

Older children will better understand your financial hardship than younger children, but they’ll still experience disappointment and frustration. Use these tips to help them understand and cope:

  • Again, sit down with them and explain the situation. Explain why the financial disaster happened and outline what the future holds. Tell your children that you probably can’t afford movie tickets, large parties, trips to amusement parks, gas money, a new car, etc.

  • When your children ask for things, remind them that you cannot afford them right now, and tell them not to ask until you have more money. You can be a little more blunt with older children.

  • When you explain things bluntly, make sure you also exercise understanding. Your children want to hang out with their friends and establish their own identity, and sometimes those activities cost money. Show empathy for how they feel about missing out.
  • As soon as your children become old enough, encourage them to get jobs so they can pay for their accessories and activities.

Again, you will have to exercise patience. Older children may have more understanding, but they’ll still need support.

Talking to Your Adult Children (Ages 18+) If:

You Have Debt

At this point, your children should have jobs of their own. They should have moved out of the house and started their post-secondary education. However, even though they don’t live under your roof anymore, you’ll still have to help them cope with the situation.

  • Again, explain everything. They need to understand the situation’s seriousness.
  • Warn your children that they’ll have little or no safety net, so they can’t rely on you to save them if they make poor financial decisions.
  • Respectfully give your children instruction on how to make wise financial decisions in the meantime. This means that they should pay rent and utilities before anything else, then buy food, then take care of car and phone payments. Only then can they turn their attention to nonessentials.
  • If you promised to pay for airfare, gas, car repairs, etc., explain that they’ll have to go without for a little while until you have enough money to pay for them.

Since you have adult children now, you shouldn’t have any trouble conveying the situation’s seriousness. However, your children may feel upset because they still need a financial safety net. Express compassion, but be firm.

They Have Debt

Many parents think they need to bail their children out of a financial crisis. However, you usually shouldn’t. Your children need to learn to stand on their own feet, so they need to experience consequences for their actions. This doesn’t mean you abandon them to their fate though—explain that you’ll keep them alive, but you won’t pay their debts. You should also walk them through the process of financial recovery.

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