When it comes to parents and children, money stress can be contagious.
That’s what Amy Weimer, director of the School of Family and Consumer Sciences at Texas State University, found when she and a colleague studied 60 children last year. They were more likely to report feeling worried if their parents were experiencing long-term financial stress.
“As a parent, if I know I’m in deep debt, I would want to do something to address that issue so it doesn’t trickle down and have an impact on my child’s mental well-being,” Weimer says. Parents may want to seek financial counseling to help with debt management, for example, if they are experiencing financial strain, she adds.
According to researchers and financial professionals, there are also other steps parents can take to help teach their children about money without sharing their financial worries with them.
Talk about money early
Talking about money with children during neutral moments can help establish a comfort level with financial discussions, says Justin Rush, a certified financial planner and founder of JGR Financial Solutions in Canton, Ohio.
On a recent drive with his son, a seventh grader, and father, the trio started talking about the price of a McDonald’s Big Mac, which led to a conversation about inflation.
Those kinds of chats can lead to discussions about budgeting and other financial lessons, Rush says, which sets a baseline for speaking about money with ease.
“Some parents think they are doing kids a service by not talking about adulting stuff early on,” says Kimberly Watkins, assistant professor in financial planning at the University of Georgia, who adds that you can start talking about money with children as young as age three. But the reality is, she says, avoiding the topic can create a “generational cycle” of financial unawareness, which can ultimately lead to more money stress.
Learn together
Sometimes, Watkins says, learning about finances can be a family project that benefits both parents and children. “Be comfortable with letting kids know you don’t know everything,” she says. If your child asks you a question about money you can’t answer, then you can find out together.
Watkins suggests using the “Money as You Grow” website from the Consumer Financial Protection Bureau for ideas on topics to explore together, such as the financial ramifications of buying a pet or moving to a new house. Your bank or credit union might offer additional online resources to help your family, she adds.
Choose carefully
Because children often interpret words so literally, using phrases like, “we don’t have the money for that” in response to requests can be confusing, says Pam Horack, a CFP at Pathfinder Planning in Lake Wylie, South Carolina. Instead, she suggests saying something like, “That’s not in our budget right now.”
That small language shift helps a child understand that parents are constantly making choices and trade-offs when it comes to money, she adds, which can ultimately be an empowering realization.
Megan McCoy, an assistant professor in the personal financial planning department at Kansas State, suggests also being mindful of how you might talk to sons and daughters differently about money, even if it’s by accident.
“One old study talked about how daughters were more likely to get messages around saving, and sons more likely to get messages around earning,” she says. “That could contribute to risk tolerance or picking a job with the right earning potential. It could make a big impact.”
Be straightforward
For parents going through a particularly stressful time such as a job loss, Weimer suggests sharing the news in an age-appropriate way rather than trying to mask it. For example, to a young child, you could explain that you lost your job but are working hard to find a new one while a teenager could understand the nuances of layoffs and job searching on LinkedIn.
“It might seem counterintuitive, but by sharing more about money, your children will feel less anxious,” says Gregg Murset, a CFP and CEO of BusyKid, a debit card and chore app for children. He suggests reassuring them that some things won’t change, such as your ability to feed and house them, while explaining that other expenditures, like going out to dinner, may have to stop, at least for now.
Invite kids to contribute
In some cases, children can contribute to the household more during a financial hardship such as a job loss, and that can help them regain a sense of control. A teenager, for example, can reduce the emotional stress of a parent juggling multiple jobs by doing additional chores around the house, Weimer says.
“It helps them recognize they contribute to the overall family well-being, too, whether that’s cutting back on expenses or just reducing parental anxiety in other ways,” she says.
Kimberly Palmer is a personal finance expert at NerdWallet and the author of “Smart Mom, Rich Mom.” Email: [email protected]. X: @KimberlyPalmer.