For Parents

How to Navigate Financial Hardship When You Have Kids

Money issues can be tough on the whole family. Here are some tips to help manage and get through it.

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Most parents have been there: Life deals you a tough financial hand, yet you still have to provide for your family. Whether you’re between jobs, struggling to get your business off the ground, or dealing with unexpected emergencies, financial hardship can cause stress in every aspect of your family life.

Juggling everything is tough, but there are many things you can do to minimize their impact on your children. To help make the process easier, we’ve gathered our best advice to help you and your child deal with the current situation and work toward a more comfortable financial future together.

Talk to Your Child Honestly

Financial hardship is scary – both for adults and children. But what can be even scarier for kids is living with uncertainty. That’s why, when money is tight, it’s important to explain the situation to your child.

How to Bring Up the Subject

Many parents stress about how to tell their kids that they’re going through a difficult time without realizing that the children may have already picked up on the clues. Kids are perceptive. They can tell something’s going on if you stop ordering pizza on Fridays or look stressed when it’s time to pay at the grocery store.

But hiding the truth could create financial trauma and confusion. It may lead them to think it’s their fault, that your family’s well-being is at risk, or that something’s wrong between you and your partner.

To help you address the subject, we recommend that you:

  • Have a conversation with your partner first. Before speaking to your child, make sure that you and your partner are aligned. Discuss what you’re comfortable sharing, what you’d prefer not to say, and any language you’d rather avoid.
  • Find the right place and time. This isn’t a conversation that you can rush or bring up while walking around the mall. Keeping your child’s feelings in mind, choose a relaxed moment when you’re at home and have plenty of time to explain the situation.
  • Let them know what changed. There are many causes for financial problems – sometimes it’s debt, the economy, or unemployment. By letting your child know what is happening, they will feel included and comforted.
  • Keep the information age-appropriate. Depending on how old your child is, a simple explanation may be enough. If your child is older, you choose to go into more detail. Regardless of how much you decide to share, remember to use straightforward words and avoid overwhelming them with too much information. 
  • Remain calm. Try to keep your own feelings out of the conversation. It’s normal for you to feel uncertain and uncomfortable, but staying calm when you break the news helps your child cope and reassures them that they will be OK.

Keep the Communication Channels Open

Every child has a different reaction to money conversations. Some may have big feelings about the information you provided. Others may need more time to understand what is going on.

Whether your child has questions right away or a few days later, you can be sure that the questions will come up. To help your child deal with the situation, we suggest that you:

  • Let them know you’re always available to hear their concerns
  • Answer their questions clearly and with honesty
  • If you don’t know the answer, look it up with them or let them know that you need more time to figure that out
  • Don’t be afraid to ask your child how they feel
  • Check in with them often

Go Back to the Basics

Financial hardship does not mean that you and your family can’t have fun. Remember, many people around the world get by with much less and still find ways to be happy. It’s just a matter of getting resourceful!

Ready to get creative? Here are some ideas on free or low-cost entertainment for the whole family to enjoy:

  • Instead of paying for private soccer lessons, look for some YouTube tutorials and kick the ball around at your local park
  • If you need a getaway, consider camping out in your backyard – smores and all!
  • Foodie families love trying new recipes at home. It’s much cheaper than going to a restaurant, and you get to cook together
  • Sign up for newsletters that let you know about all the free events in your city
  • Explore your own city by bus
  • When the weather gets warm, head to the beach, the lake, or a public pool
  • Who needs the movie theater when you can stream and make popcorn at home?
  • Many museums offer free admission once per week or per month. It’s the perfect opportunity to indulge in an afternoon of art and spend quality family time

When going through a challenging situation, many children find comfort in routine. While some changes may be inevitable, there are things you can do to help your child feel safe. These can include:

  • Sticking to their usual bedtime
  • Maintaining your family rituals
  • Keeping mealtimes regular
  • Reading books at night

Creative or athletic outlets can also help the whole family relieve tension. These are some ideas of activities that you can do together or that your child can do on their own:

  • Journaling
  • Painting
  • Playing sports
  • Going on walks
  • Dancing
  • Making videos or short films

Use This as a Teaching Opportunity

Whether your child is in pre-school or high school, you can encourage them to participate in some of your financial decisions. This is a great way to reframe the situation and teach your child how to handle money.

Depending on your child’s age, some topics to discuss can include:

  • Wants vs. needs
  • Ways to save money
  • How to manage your budget
  • Prioritizing expenses
  • The importance of an emergency fund

Get Support for Yourself

As a parent, financial hardship can affect your own mental health. While it’s important to care for your kids’ well-being, it’s also essential that you get support for yourself. Reaching out to a friend, talking to your partner, or taking time to do the things that bring you joy are all ways to take care of yourself.

Share the Good News

When things turn around – and they will – be sure to celebrate with your kiddos! Even the little milestones deserve recognition.

Did you pay off one of your credit cards? Make Sundaes for the whole family. Did you stick to your weekly budget? That deserves a dance party! By focusing on the good, you and your children can stay motivated and supportive of each other.

Books for Parents Going Through Financial Hardship

If your financial situation is challenging, the right book can help change your life. The following are our favorite books to help you overcome financial difficulties and manage your money.

Best for Budgeting

Budgeting is the foundation of stability and can even unlock your financial freedom. Your Money or Your Life is the insightful guide to creating a realistic budget that works for you and your family. By doing so, you’ll develop valuable habits that can help you build wealth.

Best for Mental Health

Transforming your relationship with money begins with internal work. With The Psychology of Money, you can work through emotional blocks and understand how feelings affect your financial decisions. All through 19 relatable short stories that you’ll find entertaining and educational.

Best for Creating a Plan

Achieving your financial goals is easier when you have a plan in place. But this plan is a living document. As your life evolves, The One-Page Financial Plan is an easy method to help you create an easy and effective plan that adapts to your changing needs – even when money is tight.

Best to Read with Kids

Life’s full of ups and downs, and Dr. Seuss has a way of explaining this in the classic Oh, the Places You’ll Go! When you’re dealing with financial hardship or other difficult situations, the lessons in this book can help you get through it – whether you’re a kid or an adult.

Facing Financial Hardship as a Family

When you’re dealing with financial difficulties, the main objective is to stay afloat. But there’s a lot you can do to bounce back as a family. By communicating with your children and working together, you can grow from the experience and set your child up for success.

Related Reading For You and Your Kids

About the Author

Lucia Caldera

Lucia Caldera is a writer who specializes in personal finance. Her goal is to create approachable content that sparks financial wellness and unlocks personal growth. Lucia's work reflects her passion for financial education as the key to reducing the wealth gap for future generations.

Last updated on: June 14, 2024