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How to help children cope with stress about money by Faith Archer

Written by Guest author

11 May 2022

Tags

Savings

10 min read

These blogs are written by third party guest authors to help provide additional insight and perspective.

By Faith Archer, personal finance journalist and money blogger at Much More With Less. Faith lives locally in Suffolk and has been writing for the financial industry for 18 years, including the Daily Telegraph, The Sunday Times, Women&Home and money blogs. She believes money doesn’t have to be boring and can bring freedom – although it can also negatively effect lives. As a mother of two children, Faith understands the implications money can have on children and family life.

Kids pick up on money worries, just as they pick up on other family tensions, but you can help them cope.
Prices have risen sharply on food, fuel and energy, leaving less cash to spend on anything else. With bills going up right, left and centre, many families are finding it difficult financially.

Children may not be responsible for bringing in money and paying the bills, but they can certainly feel the impact of any spending squeeze, and any arguments about it. Almost a third of children (30%) are worried about their family having enough money to live comfortably as the cost of living crisis deepens, according to research by Action for Children. This rises to nearly half (47%) among children from low-income backgrounds.

As a mum-of-two and personal finance journalist, I reckon that talking to kids about money not only provides reassurance but can also help them develop the skills to deal with money in later life.

Here are some suggestions to help shield your children from getting stressed about money:

Talk about money
You might be concerned that discussing money could make your children anxious. But they are likely to worry more if they suffer from changes and rows without understanding why.

Better to have an open conversation, with the chance to ask questions. Think through how to talk about any issues in an age-appropriate way, such as explaining that big bills mean you don’t have the spare cash for extra stuff. Reassure your kids that you are dealing with any problems, and it doesn’t affect how much you love them. When money is really tight, point out people who can help, such as food banks and debt charities.

Needs versus wants
Now that we use plastic cards for spending and magically withdraw money from cash machines, it is hard for kids to understand that money is limited.

As parents, we need to help them grasp the difference between ‘needs’ and ‘wants’. Needs are the essentials required to live, like food, shelter and household bills, while wants are just nice to have. Next time your children want to buy something, talk through whether it is essential, or if they could survive without it.

Understanding the difference between needs and wants can help kids come to terms with why they can’t have certain things right now. It will also help with managing their own money as adults.

Get the kids involved
I’ve tried to help my kids learn about money by getting them involved.

If they are pestering for something in particular, we talk about where else that money needs to be spent, what else they might need to give up, or whether they can find cheaper alternatives.

So for example when my oldest asked for branded cereal in the supermarket, we looked at the price labels and cost per kilo, so he could see how much it was possible to save, and weigh up a choice between one box of a big brand, versus a cheaper own brand plus extra food. As children get older, consider giving them a budget for a meal or a family day out, so they can learn how to make their own decisions.

Acknowledge differences
Children can be all too aware when other kids have better, newer and more expensive toys, phones and trips. It can be even tougher if they face cut backs on food, clothing and heating.

It’s important to acknowledge children’s reactions and sympathise. But if you can’t afford something, it’s also important to say so – and point out where the money goes instead.

Put things in perspective, discussing how there will be people who are better off and worse off around the world, and reminding them what they can be grateful for.

Stay healthy
Money worries can be stressful and overwhelming, so focus on staying healthy.
Aim for routines with regular meals, bedtimes and exercise, time to talk and the chance to meet up with friends. Consider limiting screen time late at night, so children can cope better with school the next day.

Focus on having fun for less
If you can’t afford to splash out on everything the kids want, focus on ways to have fun without breaking the bank.
Including family activities into your budget will allow you to enjoy time together, such as a meal out, safe in the knowledge you still have your finances under control.

Make the most of money saving offers, vouchers and alternatives too.

For example, when our budget didn’t stretch to cinema tickets, we started doing movie nights at home, watching a film on TV with home-made pizza and popcorn. Instead of a holiday abroad, we put up a tent in the garden and enjoyed sleep overs with friends and family. We went to the park, looked up free local activities, cashed in loyalty points for theme park tickets or headed to the beach with a picnic. Kids often value time and attention far more than expensive gifts.

Set a good example
Children pick up money habits from their parents, starting very young. If they can see you dealing with bills, trying to budget, weighing up whether to spend and seeking help when needed, it will make money less scary.
Don’t do your budgeting and paperwork when the kids are in bed, show them what bank statements and pay slips look like and get them to take utility meter readings.
Build the financial skills that will help them as adults, and where possible, avoid arguing about money in front of them.

Start a savings habit
Teaching your kids to save up for stuff can help prevent future debts.

Doling out small amounts of pocket money can help even young children understand that if they blow the lot on sweets, they won’t have enough for stickers.

If there’s something they really want, talk about how many weeks it might take to save up for that Nerf gun or Lego set. When my kids got Christmas money, I took them down to our local building society (which just happens to be the Hadleigh branch of Suffolk Building Society) to kick start good saving habits. It means they have a passbook showing how much they have paid in and taken out, and they can also see when interest has been added as a reward for saving.

Where to get help
Financial difficulties can lead to anxiety and depression for children as well as adults.

For help, start by talking to a teacher or school nurse, or consult your GP.

Children themselves can call Childline on 0800 1111 or contact Young Minds by texting YM on 85258. Young Minds offers free confidential online and phone support with children’s and young people’s mental health, via youngminds.org.uk, with a parents’ helpline on 0808 802 5544.

For help dealing with debt, contact organisations such as StepChange, National Debtline and Citizens Advice.

Summary
As parents, our instinct is usually to shelter our children from the more unpleasant things in life. However, children are really perceptive, and their understanding of a situation often goes far beyond our expectations, so it’s much better to be open and upfront. Children’s imaginations can also run riot, so they can easily get the wrong end of the stick if things aren’t explained.
Frank conversations about the squeeze on household budgets can help give children a better understanding of the current situation, and also develop their financial skills and resilience for later in life.

Guest post supplied by Faith Archer. By publishing and hosting information from guest authors on the Suffolk Building Society website this does not constitute an affiliation with, nor a recommendation of, any third party organisation. We recommend that if the content of this article applies to you, or if you require further information on the particular topic it raises, that you seek specialist advice.

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