How to Talk to Your Children About Money in These Uncertain Times
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Stock market gyrations. Inflation. Layoffs of federal workers. A possible recession.
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Children may overhear their parents talking about these things and not fully understand what’s going on or how it may affect their family’s finances. But if the children have questions, parents should be ready to talk, experts say.
“Parents are the biggest influence on kids’ financial learning,” said Ashley LeBaron-Black, an assistant professor of family life at Brigham Young University.
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Here are some tips for having conversations about money.
Children don’t pay attention to the national economy, right?
The nation’s economy seemed on solid ground at the beginning of the year, but economists expect that growth slowed in the first quarter amid uncertainty surrounding President Trump’s tariffs. Inflation has steadied, but the threatened tariffs could push prices higher again. At the same time, high borrowing costs are weighing on households, particularly those with lower incomes, and more people are late in paying their credit card bills. The stock market has whipsawed as Mr. Trump has repeatedly revised his tariff plans. And consumer expectations for the economy over the coming months have soured.
Parents shouldn’t assume their children are oblivious to these issues, said Rebecca Maxcy, director and principal investigator at the University of Chicago’s Financial Education Initiative.
Children may not grasp the details, but they’ve overheard adults discussing prices at grocery stores and restaurants. And they’re probably hearing unfamiliar terms, like tariffs, from television or online or from friends at school. This month, for example, news reports discussed the possible impact of the Trump administration’s proposed tariffs on the pricing and availability of the new Nintendo Switch 2 video game console, an item of interest for many children.
“It’s everywhere, it’s so in your face, and kids are hearing it and seeing it,” Ms. Maxcy said.
Children are intuitive, she said, and can pick up on concerns their parents have about the cost of living or the effect of market swings on their retirement savings or college savings.
How can I talk about money without making my child anxious?
If a child wonders how the family may be affected by changes in the economy, talking through the concerns can help reduce fear and confusion, said Maureen Kelley, a certified financial therapist in Denver. “You want to keep it honest but age-appropriate.”
Rather than saying the family may need to cut back on spending, Ms. Kelley said, you can try “We’re being more careful with our money right now” or “We’re adjusting how we spend our money.”
Parents can emphasize any steps they have taken to prepare for financial potholes — like creating a rainy-day savings fund, said Deana Healy, vice president of financial planning and advice with Ameriprise. They might say, “Yes, things are perhaps uncertain, but here’s what we’ve done.”
If your child asks what all this may mean for your family, it can be a “prime moment” to have a conversation because that will make any potential belt-tightening more understandable, Ms. Maxcy said. “You can say, ‘We’re making some changes,’ instead of all of a sudden saying ‘No’ all the time,” she said.
Avoid having money talks with children when you’re stressed, Ms. Maxcy said. If you’re busy and not ready to talk, say you’ll find time to chat when things are quieter. “Maybe don’t have the conversation if you just opened your 401(k) statement,” she quipped.
Robin Gurwitch, a psychologist and professor at Duke University Medical Center, recommends broaching the subject with children even if they don’t ask, because they have probably heard about economic concerns, especially if they’re on social media.
“You can say: ‘There’s a lot of talk about our economy and tariffs. I’m wondering what you’ve heard about that.’” Once parents understand what the child knows, they can address any concerns or correct misperceptions.
Because some teenagers may brush off inquiries from parents, Dr. Gurwitch said, it can help to address their concerns indirectly. Perhaps you can ask, “What do your friends think about this?” If your teenager says her friends are worried they may not be able to buy a dress for prom, she’s probably concerned as well. Then, Dr. Gurwitch said, you can reassure her that the family can afford a new prom dress, if that’s the case or, if money is tight, discuss a budget.
The overall message to children, she said, should be, “We are here to support you even if things are uncertain or scary.”
John Lanza, who has written books about allowances and family finances, said including children in budgeting could help give them some sense of control.
“Kids want to be a part of the solution,” Mr. Lanza said.
If, for instance, a household goal is to eat at home most nights instead of dining out, make it a game by having children suggest meals and help cook them. And if you can swing it, offer to give your children some of the savings as pocket money.
What if I’m not confident in talking about money?
Parents may feel that they need to have all the answers, but “it’s fine to admit you’re not an expert,” said Scott Rick, an associate professor of marketing at the University of Michigan’s business school who has studied financial decision making.
If your children ask about tariffs, for instance, and you don’t have enough knowledge on the topic, you can encourage their curiosity, and show that it’s all right to ask about money, by offering to research the subject with them.
“You might say: ‘I’d like to get a better handle on that myself. Can we look into it together?’” Dr. Rick said.
Some parents may avoid talking about money with their children because they feel guilt or shame about past financial mistakes, said Yanely Espinal, a financial educator and an author. But it’s smart to talk about money at home “early and often,” she said. Research suggests that education from parents during childhood is linked to healthy financial behaviors in young adults, she said, particularly responsible credit card use.
How can I start conversations with my children about money?
You probably already have some resources handy. Simply sharing a receipt after going to the store, for instance, can lead to talks about how much things cost, said Cynthia Fitzthum, a financial education expert at St. Cloud State University in Minnesota.
Dr. LeBaron-Black’s parents once gathered her and her siblings around a stack of Monopoly money and counted out how much income they made each month, she said. “I thought, ‘That looks like a lot,’” she recalled. Then her parents started subtracting: the amount they spent for the mortgage, heat, electricity and food. By the end, there was still a little left. But the point was made. The family’s needs were covered, but they had to spend wisely.
Reading and discussing books, including those not explicitly about money, can start conversations about why characters make the choices they do and how money may have played a role, Ms. Maxcy said. For young children, she suggested “A Bike Like Sergio’s,” about a boy who desperately wants a cool bicycle.
Dr. Fitzthum suggests a book for third to fifth graders, “Beatrice’s Goat,” about a young girl in Uganda who receives a goat and the impact it has on her family. Without using wonky terms, it introduces concepts like income, savings and even opportunity costs — the economic principle that making one choice can mean you miss out on the benefit of making a different one.
Kelly Li said she had decided to write the “Little Economists” series of books for children ages 3 to 8 after becoming a mother and learning that many Americans lacked savings. (Ms. Li, who previously worked in finance, wrote the books — with titles like “What Is Money?” and “What Is Inflation?” — under the surname Lee.)
The Council for Economic Education, which focuses on economic and financial instruction in kindergarten through high school, offers a free Financial Fun Pack on its website with exercises families can use at home.
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Stock market gyrations. Inflation. Layoffs of federal workers. A possible recession.
Children may overhear their parents talking about these things and not fully understand what’s going on or how it may affect their family’s finances. But if the children have questions, parents should be ready to talk, experts say.
“Parents are the biggest influence on kids’ financial learning,” said Ashley LeBaron-Black, an assistant professor of family life at Brigham Young University.
Here are some tips for having conversations about money.
Children don’t pay attention to the national economy, right?
The nation’s economy seemed on solid ground at the beginning of the year, but economists expect that growth slowed in the first quarter amid uncertainty surrounding President Trump’s tariffs. Inflation has steadied, but the threatened tariffs could push prices higher again. At the same time, high borrowing costs are weighing on households, particularly those with lower incomes, and more people are late in paying their credit card bills. The stock market has whipsawed as Mr. Trump has repeatedly revised his tariff plans. And consumer expectations for the economy over the coming months have soured.
Parents shouldn’t assume their children are oblivious to these issues, said Rebecca Maxcy, director and principal investigator at the University of Chicago’s Financial Education Initiative.
Children may not grasp the details, but they’ve overheard adults discussing prices at grocery stores and restaurants. And they’re probably hearing unfamiliar terms, like tariffs, from television or online or from friends at school. This month, for example, news reports discussed the possible impact of the Trump administration’s proposed tariffs on the pricing and availability of the new Nintendo Switch 2 video game console, an item of interest for many children.
“It’s everywhere, it’s so in your face, and kids are hearing it and seeing it,” Ms. Maxcy said.
Children are intuitive, she said, and can pick up on concerns their parents have about the cost of living or the effect of market swings on their retirement savings or college savings.
How can I talk about money without making my child anxious?
If a child wonders how the family may be affected by changes in the economy, talking through the concerns can help reduce fear and confusion, said Maureen Kelley, a certified financial therapist in Denver. “You want to keep it honest but age-appropriate.”
Rather than saying the family may need to cut back on spending, Ms. Kelley said, you can try “We’re being more careful with our money right now” or “We’re adjusting how we spend our money.”
Parents can emphasize any steps they have taken to prepare for financial potholes — like creating a rainy-day savings fund, said Deana Healy, vice president of financial planning and advice with Ameriprise. They might say, “Yes, things are perhaps uncertain, but here’s what we’ve done.”
If your child asks what all this may mean for your family, it can be a “prime moment” to have a conversation because that will make any potential belt-tightening more understandable, Ms. Maxcy said. “You can say, ‘We’re making some changes,’ instead of all of a sudden saying ‘No’ all the time,” she said.
Avoid having money talks with children when you’re stressed, Ms. Maxcy said. If you’re busy and not ready to talk, say you’ll find time to chat when things are quieter. “Maybe don’t have the conversation if you just opened your 401(k) statement,” she quipped.
Robin Gurwitch, a psychologist and professor at Duke University Medical Center, recommends broaching the subject with children even if they don’t ask, because they have probably heard about economic concerns, especially if they’re on social media.
“You can say: ‘There’s a lot of talk about our economy and tariffs. I’m wondering what you’ve heard about that.’” Once parents understand what the child knows, they can address any concerns or correct misperceptions.
Because some teenagers may brush off inquiries from parents, Dr. Gurwitch said, it can help to address their concerns indirectly. Perhaps you can ask, “What do your friends think about this?” If your teenager says her friends are worried they may not be able to buy a dress for prom, she’s probably concerned as well. Then, Dr. Gurwitch said, you can reassure her that the family can afford a new prom dress, if that’s the case or, if money is tight, discuss a budget.
The overall message to children, she said, should be, “We are here to support you even if things are uncertain or scary.”
John Lanza, who has written books about allowances and family finances, said including children in budgeting could help give them some sense of control.
“Kids want to be a part of the solution,” Mr. Lanza said.
If, for instance, a household goal is to eat at home most nights instead of dining out, make it a game by having children suggest meals and help cook them. And if you can swing it, offer to give your children some of the savings as pocket money.
What if I’m not confident in talking about money?
Parents may feel that they need to have all the answers, but “it’s fine to admit you’re not an expert,” said Scott Rick, an associate professor of marketing at the University of Michigan’s business school who has studied financial decision making.
If your children ask about tariffs, for instance, and you don’t have enough knowledge on the topic, you can encourage their curiosity, and show that it’s all right to ask about money, by offering to research the subject with them.
“You might say: ‘I’d like to get a better handle on that myself. Can we look into it together?’” Dr. Rick said.
Some parents may avoid talking about money with their children because they feel guilt or shame about past financial mistakes, said Yanely Espinal, a financial educator and an author. But it’s smart to talk about money at home “early and often,” she said. Research suggests that education from parents during childhood is linked to healthy financial behaviors in young adults, she said, particularly responsible credit card use.
How can I start conversations with my children about money?
You probably already have some resources handy. Simply sharing a receipt after going to the store, for instance, can lead to talks about how much things cost, said Cynthia Fitzthum, a financial education expert at St. Cloud State University in Minnesota.
Dr. LeBaron-Black’s parents once gathered her and her siblings around a stack of Monopoly money and counted out how much income they made each month, she said. “I thought, ‘That looks like a lot,’” she recalled. Then her parents started subtracting: the amount they spent for the mortgage, heat, electricity and food. By the end, there was still a little left. But the point was made. The family’s needs were covered, but they had to spend wisely.
Reading and discussing books, including those not explicitly about money, can start conversations about why characters make the choices they do and how money may have played a role, Ms. Maxcy said. For young children, she suggested “A Bike Like Sergio’s,” about a boy who desperately wants a cool bicycle.
Dr. Fitzthum suggests a book for third to fifth graders, “Beatrice’s Goat,” about a young girl in Uganda who receives a goat and the impact it has on her family. Without using wonky terms, it introduces concepts like income, savings and even opportunity costs — the economic principle that making one choice can mean you miss out on the benefit of making a different one.
Kelly Li said she had decided to write the “Little Economists” series of books for children ages 3 to 8 after becoming a mother and learning that many Americans lacked savings. (Ms. Li, who previously worked in finance, wrote the books — with titles like “What Is Money?” and “What Is Inflation?” — under the surname Lee.)
The Council for Economic Education, which focuses on economic and financial instruction in kindergarten through high school, offers a free Financial Fun Pack on its website with exercises families can use at home.
