How to Talk Money Worries with Children


A plunging stock market can create a sinking feeling that churns the stomach of many parents that eventually trickles down to their children.

Diminishing bank accounts and depleted savings can hurt your family in immediate ways, but how you communicate what is happening to your family's money matters both now and down the road.

Remember: Your child’s lifelong relationship with money begins with you.

“Kids are like little sponges, they’re learning all the time, and they’re getting these money scripts that are written by someone else, memorized and then acted out,” says Richard S. Kahler, president of Kahler Financial Group and author of Facilitating

Financial Health.
If you have a bad relationship with money than the negative impact weighs heavily on your child. “As parents, we’re helping form our children’s money scripts by what we say about money, and what we don’t say about money,” says Kahler.

Determine Your Relationship to Money

Learn what type of relationship you have with money. “Write down the words that immediately come to mind when you’re talking about money, then ask how you would describe your primary love relationship using the words on the paper, and based on the description you can determine your relationship with money,” says Kahler.
Most people will find the adjectives are not positive and will discover a “tortured” relationship with money. It’s this relationship that creates a financial legacy that your child might find hard to break with age.

Protecting Your Child
During economic turmoil or personal finance misfortune what parents should not do is make financial issues problems of the child. Children need boundaries. “Do not to commit financial incest with inappropriate boundaries about money around children,” says Kahler. There are two extremes: Not sharing anything and sharing too much.
Share enough information to not hide the obvious, but do not to depend on the child to meet an adult parent's needs, says Kahler. As scary as a bear market is a therapist, financial planner or adult friend should be a source for feedback about your fears surrounding money. At the same time, keeping mum can be just frightening to a child who may even blame themselves for a parent’s bankruptcy or financial hard luck. Find a balance. The up and down markets might make it a perfect time to begin to address the basics of how the stock market works

Use your instincts to determine the amount of disclosure for your child. If you’re child is older and able to pitch in with household income, then don’t be afraid of accepting in moderation. Just make sure to demonstrate appreciation for your child’s contribution to the household, whether it’s with a thank you or other means.

What you want to avoid in your household is creating financial infidelity, financial egotism or financial anorexia. What do these terms means:

*Financial infidelity is any secret that you keep from your partner around money that if they found out about you would feel ashamed, which could be borrowing, loaning, saving or giving money.

* Financial egotism is living beyond your means or downplaying your personal wealth. The two extremes demonstrate an general lack of financial health and honesty.

*Financial anorexia is the opposite extreme of financial binging. It’s an over reaction on the less is better side. If you can afford a better lifestyle, and you’re not taking care of yourself, that’s financial anorexia.

Whether you’re poor or rich, you can have a healthy relationship with money. Says Kahler: “The most important way to help children is to make your relationship with money healthy.”

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