It has been three months since our country made some drastic changes due to COVID-19. From record unemployment to quarantining, it has been a roller coaster ride affecting everyone; including our children. Obviously, virtual learning and limited social interactions impacted them, but the change in finances affects them, too. While some parents think it is best to keep finances to themselves, it is important to discuss pandemic money concerns with your child.
Here are a few tips:
Children and teens are more aware than adults give them credit for. Engage in age-appropriate discussions on how the pandemic is affecting your family’s financial situation.
Money is an emotional topic. Go into the conversation with a calm, level-headed nature. If feelings of sadness, anger, frustration, or hopelessness are front and center during the conversation, this will be projected onto your child and likely the key elements of the talk will be missed.
Sharing the family budget is a great way for children to understand the overall picture. The facts and figures laid out in a graph and/or excel spreadsheet help them to conceptualize the financial situation.
Revise your family budget as a team. Discuss with your children what they are willing to give up and what, as a family, you are willing to cut or reduce. This involvement in decision-making provides accountability and a feeling of some control in a COVID-19 world where they do not feel much control elsewhere.
When a financial plan is based on your money values, you can walk a purposeful and intentional financial path. Sharing your money values with your children creates an opportunity to teach them the ‘why’ behind money, and not just dollar figures.
All of the recent changes can trigger big emotions. When events have been canceled, such as spring sports and graduations, in addition to cutting expenses like summer vacations, club memberships, private lessons, etc., the emotional toll may be heavy with anger and frustration. It is important to create a safe space and validate kids’ feelings. “Yes, the situation is hard.” Or “Yes, I wish we did not have to cut these things,” will allow for honest feelings to be processed without blame or shame.
Children thrive on structure and expectations, especially during times of uncertainty. As a family, having honest discussions, revising the budget, and creating a plan of action helps provides a new sense of structure and expectations. This helps give kids some peace of mind.
The concept of sharing your savings and spending with your children may have never crossed your mind, but we are now in COVID-19 territory and expectations have changed. Children are intuitive and aware of their changing family situation and having an open dialogue provides reality. Working as a team to revise the budget provides some sense of control, and reassurance your family has a plan to overcome this temporary financial situation provides hope.
In addition, JP Williams is the Founder of Pillar Wealth Group who lives and works near Columbus, Ohio. JP founded Pillar Wealth Group with over 17 years of experience and specializes in financial planning, retirement planning, investment management, risk management, college planning, and estate planning. Contact us today to get started with your financial wellness journey. Contact us today to schedule an introductory meeting!