Many parents worry money conversations with their kids will be difficult or uncomfortable, so they avoid having the “money talk” as long as possible. This is a common concern, but most parents discover that it’s much easier than they anticipated and can actually be a lot of fun. Of course, there are instances when those talks don’t produce the expected outcome.
I’ve always been a big proponent of talking to your kids about family debt. Money secrets do more harm than good, even when your intent is honorable. Debt seems like a grown-up concern, which it is, but it’s also a family concern. It’s highly unlikely your kids don’t know there is tension in the home, but they do not understand why.
It’s just as stressful for them, which is why I advocate having an honest, age-appropriate conversation with them. They shouldn’t shoulder the debt burden, but they should also be aware of why changes that affect them are being implemented.
In most instances, children respond positively overall. They may be disappointed about some of the cut-backs, which is normal and to be expected. But beyond the occasional grumble, they support your efforts and do their part. However, there are children who may not actively undermine your efforts but still act out and cause discord within the family.
Many parents don’t know how to respond when this happens, so let’s take a closer look first at why or what emotions may be causing your child to lash out.
Your child may blame themselves for the family debt situation. They may think about the times they asked you for money or to buy them a pair of designer jeans or a new video game and you said “yes”. They feel at fault, even though they are not to blame.
You know it’s not your children’s fault, but unless you tell them this (and sometimes repeatedly), they may still think they are at fault, especially your more sensitive children. They will let guilt eat them up and may become moody as a defense mechanism. If you suspect one of your kids does blame themselves, I would suggest as part of your regular progress reports that you gently remind your kids that they are not to blame.
The changes you need to make may feel like punishment to your child, even if they rationally understand why they need to be made. They may be upset and angry with you because they had to drop out of their favorite activities and cannot do the things they want or used to be able to do.
When asked what is wrong, they may attack and drop the most powerful weapon in their arsenal, the “I hate you” bomb. Those three words cut like a knife and you need to prepared for their anger, so you don’t respond emotionally back, either with equal anger or defeat.
This is obviously the controversial choice, but before you gather up your pitchforks and start leaving ALL CAPS comments at me, please hear me out. Most parents are wired to protect their kids and when they hurt, we hurt. And when we caused the hurt, we doubly hurt. Many parents will respond to the “I hate you” bomb emotionally, which can lead to a decision you regret later. Let’s remove the emotion and take real look at this option to see its true cost, so you can make a mindful choice.
Most people select a payoff date, and in most instances, it’s a fairly arbitrary date. I certainly encourage people to be appropriately aggressive and not stay in debt any longer than necessary, but you also need to look at the whole picture. What is the impact of not permitting your child to participate in their current activities? Be honest. Some things, depending on their age and skill, is very minimal. For your teens, however, it may have more of a legitimate impact, especially if you’re not looking at a one year absence, but more likely 3, 4 or 5 years of non-participation. It could prevent them from making the high school teams, earning college scholarships etc.
This may not seem like a huge deal to you, but it could mean everything to them. So what are your options?
PLEASE NOTE: Deciding to what to cut and what not to cut isn’t easy and is a personal choice. Don’t let your emotions guide what you eliminate and what you don’t. Take each item one-by-one and decide what’s best for your family. Remember, activities, such as piano lessons, gymnastics, baseball or hockey lessons do add value to your kids life, so it may make sense to mindfully continue to support their favorite activity while eliminating the rest. Things like designers jeans and iPhones may be things they want, but should be items they earn money to buy themselves.
Don’t worry you still have other options if the above don’t appeal to you. Let’s take a closer look at some alternatives.
It may be a bit of a cliche, but lots of grandparents love to spoil their grandchildren. And it’s likely that you have at least one set that indulges your kids with expensive gifts throughout the year. Confirm with your kids first that they support this and assuming they do, ask grandparents to instead pay for activities in lieu of Christmas, Birthday and I love you gifts.
There is no reason why kids can’t pay for their own activities or at least partially pay for them (with you or their grandparents footing the rest of the bill). Kids hoard lots of things, but when they find out they can earn money by selling old video games, clothes, toys, etc., they suddenly don’t mind cleaning out their closets. Help them sell items on Craigslist (safety first!), eBay or hold a garage sale to make money for activities and/or fun money.
Encourage Their Entrepreneurial Spirit
I’d start with having them sell their old things (partly just to clean out their room!), but to make money ongoing, they need to find some sort of a job. There is, of course, the traditional job, but depending on their age, they may be too young to get hired. But that doesn’t mean they don’t have options.
Babysitting, shoveling snow, raking leaves, mowing lawns and walking dogs are good, high-paying jobs. If they are extremely good at a sport, musical instrument or school subject, have them tutor or coach younger kids. You’d be surprised by how big of an audience there is for these types of tutors and coaches and how much parents are willing to pay, especially if your child is known within your community or school for their abilities.
The key is talk to your kids. They may be angry. They may say hurtful things. Let them. You may want to avoid it but letting these emotions fester only makes the situation worse. Let them speak their mind. It will be cathartic for them and you (because you most likely do feel guilty). They and you will feel better if you can clear the air. Because most likely underneath their anger is fear. Fear often manifests as anger and once the anger is released, you can deal with their fears.
Kids pick up on your emotions. If you feel scared or guilty or angry, there is a good chance they do too. So first, take an honest assessment of how you feel. Because even though you may think you’re masking your fears, you’re probably not doing as good of job as you think you are. Older kids, in particular, may have had friends or classmates fall on hard financial times too, which could have led to their friends losing their homes, parents divorcing, etc. Your kids may be scared this will happen to them.
At a progress update, acknowledge your fears and most importantly, how you worked through them. Invite your kids to share what fears they have. They may or may not feel comfortable sharing in front of their siblings, but you can also have private conversations individually afterwards.
When you talk to your kids about family debt, having a united, positive front goes a long way. As does having a clear, confident plan. Expect and ask for a supportive response and in most instance you’ll get it. At the same time, be ready to deal with some unhappiness and resistance too. You want to be prepared to handle any outcome, so you can make mindful decisions, not emotional ones.
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SHANNON RYAN, CFP®
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