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Should you tell your kids about your debt?

Talking to kids about your debtChildren and debt in the same sentence often sparks a lot of anxiety, especially when letting children know you had bad news to tell them can put them on edge. A lot of life as a parent is guesswork, trial and error and working out what is best and what works well in the household. There’s no right or wrong answer to doing a perfect job as a parent, especially when there are financial issues looming.

You’ll be thinking about the way to approach this issue in a number of different angles and viewpoints that can often end up leaving you running around in circles, but really there isn’t a set way that will be easy for you to share with your children. Kids and debt can be a touchy subject to marry together on the surface.

In fact, you can end up sparking fear in children’s heads when they’re suddenly realising that a huge dramatic change is about to happen in the family that can change the way money is spent, the amount of income coming in and how often parents will say no to their children when they simply cannot afford to splurge out.

For most of the people struggling with debt, the impact of the debt on their family is their biggest concern. Many feel that that debt is an adult issue and that to reduce the stress on your kids and debt, is to keep it all to themselves.

It’s a burning question: whether to tell your child that you’re suffering from serious financial trouble. While this might be instinct, to shield our kids from the stress of debt, you might not be actually shielding them from anything. Don’t think that the subject of children and debt as a pressing issue – it can actually be helpful and can put your child at ease.

Research shows that 91% of kids know if their parents are stressed.

As with all things as a parent, it’s not simple. It comes down to the child. Money is a difficult concept to get, even more so with children and debt, and kids under 5 just won’t understand.  It also depends on the situation and if the problem is going to be long-term. Having parents who are in a highly stressed state for a long time (years) has been shown to have a negative effect on child development.

Having a budget and discussing it at the family dinner table helps prepare your kids for the future. Most parents don’t teach their kids anything about money and this doesn’t set them up for a positive financial future.

How much you discuss money with your kids will be led by their level of interest and understanding of the topic – you know your child. Getting to grips with your kids and debt in the same room can allow them to feel comfortable with the issue at hand.

If you feel that your child is old enough to understand and your situation is causing you stress it may be advisable to talk to your child. First off, explain that it’s not the child’s fault. If you’re going to have to make some changes around the house you need to explain their new situation to them. Children and debt should also not be assumed to go hand in hand, meaning that you can overcome your financial situation with your family together.

Should you feel that you are still struggling getting to grips with your new situation, as well as facing the task of opening up to your children about your money troubles, you can always ask for advice from even your own parents, or others that have undergone a similar situation. Even a cup of coffee with your best friends can ease the tension, but things that can affect the way things happen in the household should be shared with everyone living in your home.

But more importantly explain that there will always be food on the table, the power will always be on, and you will always be a family.

It’s important that you still have fun as a family. Go on camping holidays. Go to the park and the library. Have special dinners at home. Remember it’s about how much time you spend together as a family not how much you spend.

If you’re experiencing financial hardship, we can help at Debt Mediators.

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