Talking to Kids About Money

03 Sep 2020

Everyone is a little bit nervous about money these days and feeling the pinch. Budgets are being revamped and regular shopping habits are being curbed. If we are concerned, then it goes without saying that our kids are feeling it too. They might even ask us some uncomfortable questions:

“Do we have enough money?”

“Are we going to be poor?”

“What’s going to happen to us?”

Here are 6 ways we can handle this tough conversation:

1. Be Honest:
It’s never good to hide things from children. We need to just pose the answers to their questions in a child-friendly manner. It is helpful if we focus on the positive and be solution-oriented in our responses.

We can say things like:

“Money is a bit tight right now. We will figure out a budget and we will work it out.”
“We have to watch what we are spending now. We don’t have money for extras, but we will be okay.”

Reassure children that you and your spouse will do everything they can to keep them safe:
“Whatever happens, Daddy and I will make sure that you are taken care of.”
“Daddy and I have a lot of great ideas on how to make sure this family is okay.”

2. Be Kind to Yourself:
Mara Strom, from Kosher on a Budget cautions parents. It is really difficult when your budget needs to be slashed. She says,

“Understand and be compassionate toward yourself because making changes can be difficult and painful. That’s because money is much more than dollars and cents. It’s so complicated and intertwined with our emotions and self-perception. So often trimming your budget – especially in the middle of other very real external stresses – can trigger an emotional response. Be mindful of that. Try to have awareness about the complexity and be compassionate toward yourself as you move forward.”

3. Foster Resilience with Stories:
This is a very difficult time. However, it is also a golden opportunity to teach children about resilience. There was an interesting study done by Marshall Duke a psychologist at Emory University. He found that children who know a lot about their families, their family narratives and histories, tend to do better when they face challenges. “The more children knew about their family’s history, the stronger their sense of control over their lives, the higher their self-esteem and the more successfully they believed their families functioned.”
Most important for our article, Duke, also studied different types of family narratives and found that the most helpful and valuable one was the “oscillating family narrative,” like the following:

“Dear, let me tell you, we’ve had ups and downs in our family. We built a family business. Your grandfather was a pillar of the community. Your mother was on the board of the hospital. But we also had setbacks. You had an uncle who was once arrested. We had a house burn down. Your father lost a job. But no matter what happened, we always stuck together as a family.”

Now is the time to break out those family stories and use them to your advantage.

4. Teach Kids About Budgeting:
Another great way to use this time to our advantage is to teach kids about budgeting. Learning to budget, gives children a life skill. It teaches them to feel in control of their money, instead of their money controlling them. Anything that can empower children at this time is helpful to them. Giving them knowledge about the workings of money can make them feel reassured.

It does not have to be anything fancy. If you haven’t already, give your children an allowance. It can be a small amount. (Just FYI, we had to cut back on our children’s weekly allowance at this time.) When giving kids their money, explain to them that it should be split into three categories: Tzedakah/Charity, Spending and Saving. Halachicly, 10% is for Tzedakah, and then they can decide how much they want to save and how much they want to spend.

Yael Trusch, of and creator the Jewish Money Makeover stresses the importance of Tzedakah, saying, “Kids should be taught from an early age to take 10% out of money they receive in gifts or paid jobs, to give to the charity of their own choice.”

Giving Tzedakah is a great way to let kids know, that even when we might be in trouble, we still have the power to give. Even if it is a small amount, it can help. Tzedakah trains us to think of others, of people that might be going through the same difficulties as us or even worse.

More important, our tradition tells us that giving Tzedakah, is said to protect you from financial difficulties. Our Sages, teach that continuing to give Tzedakah even when you are down and out, can protect you from further financial harm.”

5. Normalize Talk About Money:
Yael Trusch urges parents to use this time to normalize money conversations. She says, “Money is not some taboo subject laden with secrecy and shame, but rather a wonderful tool that we all use and has tremendous potential. When our kids see us and hear us discussing what our spending choices are, and what causes we choose to give charity to, it makes money a normal and positive part of life. Kids should see their parents having regular “money dates” where they go over their spending plan. Thanking G-d for the new clients, the new project, fulfillment at work, and for the opportunity to give charity, should be part of the conversations at home that relate to money.”

Most important she adds, “When kids ask for something, try using empowering and positive language like “we’re choosing not to spend on that right now,” instead of “we can’t afford that.” When your child wants to buy something that you deem is “extra” or something he or she should pay for, say, “Sounds like a great idea. How do you plan to pay for it?” Give them the opportunity to brainstorm ideas on how they will earn money and save money to buy themselves certain “wants” and the tremendous satisfaction of working towards a financial goal.”

6. Talk About Your Family’s Strength:
It’s important throughout this whole ordeal, (not just in regards to money) to paint a positive picture of your family and your ability to rise to challenges.

Every time we have a big or little challenge nowadays, the line at the grocery store was really long, they were out of milk, or just the fact that our lives are limited in general, we need to say in front of our children:

“This is challenging. It is a good thing that we are a family that rises to the challenge.”

“Our family is made of tough stuff. We will get through this.”

There you have it. 6 ways to help us navigate the tricky subject of money with our children.

The words of this author reflect his/her own opinions and do not necessarily represent the official position of the Orthodox Union.