Many parents who are facing the prospect of a bankruptcy may be wondering whether they should be discussing their financial difficulties with their children. In all likelihood, your kids already have some sense of what’s going on.
Research shows that a child’s perception of financial distress without explanation or assurances can cause long-term psychological problems and an antagonistic relationship with money that could last a lifetime. There is nothing wrong with providing your children with an age-appropriate explanation of your financial difficulties, with the following in mind:
- Focus on the positive. Negativity may instill in your children a sense of helplessness, as will arguing about finances in their presence. The best policy is to assure them that they will always have food to eat and a roof over their heads. Emphasize that struggles often lead to wonderful new opportunities.
- Honesty is the best policy. Don’t lie to them. If you’re facing a possible foreclosure, don’t promise them you’ll never move. Give them confidence that your family will remain close regardless of your surroundings, and that relationships are far more important than the size of a house or the stuff that’s in it.
- Create a family budget. For young children, the best you can do is to teach them to distinguish between wants and needs. Teens, depending on their level of maturity, can generally handle more in-depth lessons on spending responsibly. Although they don’t need to know how much you earn, going over the family budget with them can teach them that you can’t always have what you want.
- Don’t share too much and don’t apologize. Your child is not your confidant. Your conversations should be limited to how they will be affected by the situation.
- Give them something to do. It may be spending a few hours a week searching for bargains, clipping coupons, or figuring out how to conserve energy around the home. Teenagers can babysit younger siblings and do yard work, and even young children can help with basic housekeeping.
In summation, you can turn your misfortune into a valuable learning opportunity for your entire family. Our office provides a workshop for our bankruptcy clients on financial recovery after bankruptcy. The workshop presents strategies that can benefit your entire family. Call our office to find out more.