When is it necessary to tell your kid about your money problems?

You’ve got financial worry. When should you tell your kids?

You don’t want to worry your kids with your adult financial problems, but if you haven’t bounced back from that layoff or your debt has snowballed, a sit-down might be unavoidable. Because sometimes you can struggle silently, and other times your circumstances affect your kids so much they need you to give them context—and reassurance. You are all in this together, after all. Whether your kids are clamoring for a pricey vacation or the latest smartphone, here’s when it’s necessary to confide in them about your money woes.

School break

You’ve known about the upcoming break for months, and the kids have been talking it up: They can’t wait to hit the slopes, or they’re practicing their Spanish for a sojourn in Mexico. You so want to give this to them—and you desperately need a break yourself—but the wallet says no.

Should you tell them? Yes. The big family vacation isn’t doable this year, even with months of diligent saving. Rather than max out your credit cards to give them their dream vacation and save face, come clean. If they learn why you can’t go, maybe they’ll be less disappointed.

What do you say? “I’m dying to explore ruins and snorkel together, too, but our budget is tight. Mexico will have to wait. But we’ve found some amazing road trips that we can choose from together, plus you can have a couple sleepovers that week. If our financial circumstances improve, maybe we can take that trip south of the border next year.”

Sleepaway camp

Your kids started at sleepaway camp a couple years ago, and now it’s the highlight of their summer. You got their feet wet with one week, the next year they did three, and now they want the full six. Come on! All of their camp friends are doing it.

Should you tell them? Unequivocally, yes. And as soon as possible. But first determine if you can swing a shorter stay. If you can’t, having affordable alternatives on hand (day camp?) will soften the blow and give them a sense of choice in the matter. Let them know that most families have to tighten their financial belt at some point, and that things will be OK.

What do you say? “I know you’re looking forward to doing the whole summer at sleepaway camp, but it’s too expensive for us this year. We can only afford one week. We’ve discovered some great options in town for the other weeks, like a basketball clinic and a science camp that some of your friends are doing. But if it really means that much to you, you do have several months to earn some money and make it happen. We’re happy to help you set up a business babysitting/mowing lawns/dog-walking/tutoring/etc.”


Extracurricular activities

These days, “overscheduled” is a way of life for many kids. They’ve come to expect a full slate of (not free) after-school and weekend activities, some of which meet multiple times a week. It can add up, and fast. If your family is on that track, maybe it’s time to slow down a bit.

Should you tell them? Maybe. If you think their roster of activities has gotten out of hand, and the kids don’t have time to just “be,” you can set a limit and not make it about finances. If your budget allows, try asking your kids to select one sport and one creative class per season. If you need to scrimp beyond that, you’ll have to explain the financial realities. Look into available free programs or ones with income-based scholarships, or help them find projects they can work on at home this semester, like learning to craft, cook, or build something.

What do you say? “I love that you are interested in so many things, but between the planning, the carpooling, and performances/games, all the activities are becoming too much. Let’s choose two favorites every season and try that for a while.”

Being on trend

The latest fashions at school involve clothes from a designer boutique in town and limited-edition kicks. Your kids are desperate to “fit in,” but it’s just not in the budget.

Should you tell them? Maybe. Ask yourself: Would you buy these things for your kids if you could afford them? If you would, then yes, let them know that you can’t right now, and tell them why. If you’re opposed to spending lavishly on trendy clothing and shoes, then perhaps you don’t need to divulge your financial woes and instead make it a teachable moment about their finances. Give them a clothing budget and allow them to decide how they want to spend it. Help them weigh the costs and offer your input. But if they blow 80% of the budget on those sneakers, that leaves little for essentials like pants and tops—a lesson they’ll remember when they’re wearing last year’s duds.

What do you say? “I know that all of your friends are wearing these brands, but what they cost is more than we’re willing or able to spend. Let me help you choose one trendy staple item, like a jacket or a pair of boots, and we can find lower-priced items to fill in the gaps. If you really, really want these things, you can save up for them yourself, or add them to your wish list. Maybe your grandparents can get them for your birthday.”

The all-important device

A friend recently stunned me by sharing that at her daughter’s elementary school, the fifth-grade graduation gift of choice was an iPhone 8. (That is, if the young grad didn’t already have one.) If your kids are clamoring for the latest smartphone or fancy tech gadget, it might be time for a financial reality check.

Should you tell them? Maybe. It depends how you view pricey gifts. Because smartphones are quickly becoming the norm for kids—even before they’re tweens—it can be difficult for them to appreciate how much those devices cost. At a certain age, a smartphone can definitely help you keep tabs on your kid and ease your role as social director. But they’ll survive without one. In this scenario, you don’t need to share your financial situation unless you choose to. Just show them the price tag and give them a frame of reference by comparing it to other expenses like groceries or a new bike.

What do you say? “I want you to know how expensive this device is. This will hopefully help you understand why it doesn’t make sense for us to purchase a new one for you. I’d like you to have a smartphone, and I’ll happily give you mine when I upgrade. I’ll keep you posted about that timeline.”

Money problems are stressful for everyone, and we want to shield our kids from that stress. But there are times when transparency is the best policy. You don’t have to tell your kids absolutely everything, but keeping them in the loop—and even having them pitch in—can help them understand your decisions and values—and appreciate what they already have.

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