Should I Tell My Children About the Financial Struggles in Our Family

Discussing about the financial struggles in our family might be uncomfortable for many parents, stemming from either a childhood where such conversations were avoided or personal anxiety. However, opening up about money and family budgets is a significant step towards nurturing our kids with lifelong financial literacy. Even if it feels awkward, instilling financial awareness in our children is critical for their future financial independence.

Your predicament is perhaps all too familiar to many families in today’s economy. The cost of extracurricular activities for kids seems to be going up faster than inflation, which is already having a big effect on how much money families have each month for food and other needs. I think it’s great that you involve your kids in the decision-making process. It shows them that you care about them as a family and are willing to make adjustments for them. I’ve noticed that a common criticism of today’s youth is that they act entitled. However, this can be mitigated by not shielding your kids from the reality of having to make tough decisions.

The Family Budget: To Talk or Not to Talk?

Ron Lieber advocates for openness about family finances in his helpful book The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money. Money discussions can be awkward because many modern parents were raised in households where doing so was seen as rude or insulting. Lieber stresses that “every conversation about money is also about values.” You and your partner set a good example of responsibility and thriftiness as you manage your financial circumstances. By having an open dialogue about this topic with your kids, you can help them make connections between their financial choices and moral principles.

Money Talk: Some Pointers

I’m not sure whether you’ve previously explained to your daughters that the family needs to cut back on extracurricular activities to save money, but if you haven’t, here are several ways to broach the subject:

  • Your children, ages 9 and 13, are of an age when they can grasp the idea that reducing household expenditures will help the family’s financial situation. When children begin to inquire specifically about matters such as “How much money do you make?” Lieber suggests grounding them in the context of regular household expenditures. Before factoring in all the costs of living, a salary may seem high. If you haven’t already, it will be more impactful to split the bill for their extracurricular activities and other household costs.
  • This is a perfect time to introduce “wants” versus “needs.” We all know that this distinction is crucial for sound financial management throughout one’s life. (Do I really need this latte at $10?) Even if it’s true that many children in the modern world are overscheduled, you should consider your daughters’ extracurricular activities to be “wants” rather than necessities.
  • Don’t put your kids through undue stress by hiding the truth about the family’s financial situation. You may be open with your kids about money problems without letting them take on your anxiety by showing them that you have a plan and know what to do. It appears that you and your partner are in a position to improve your family’s financial situation and are working toward that goal. If your kids grow up to experience financial instability, this can serve as a model for them to follow.
  • Break up the information into pieces that they can handle, and give them time to ask questions. It’s important to give them time to think about what you’re saying so they can fully grasp the information you’re imparting to them. By listening to their inquiries, you can tell if they are forming illogical assumptions that will cause them undue stress. “(“Does this imply we’re going to move?”)

Never underestimate a child’s innate ingenuity and resourcefulness. If they have inquiries about finances and you don’t answer them truthfully, they may look elsewhere for the information.

The Family That Budgets Together, Succeeds Together…

While it is ultimately your responsibility as parents to ensure that your family’s financial needs are met, you can still involve your children in ways that will teach them and give them agency. Your children may not have a say in whether or not they have to cut back on extracurricular activities, but they may have suggestions for how you can save money or how they may earn money to help out. You’re not counting on your kids to pay the bills, but if they can make some of their own spending money with a little ingenuity, they’ll feel more accomplished and grown-up as they lust after that new piece of technology. They can acquire the ability to save up for something they want and then purchase it without relying on your financial support.

Less Extracurricular Activity and Its Benefits

While I realize this isn’t the subject of your inquiry, there are other advantages to cutting back on extracurricular activities besides just saving money. I understand that this is a transition for your kids, but many youngsters nowadays sacrifice sleep, leisure time, and family commitments in favor of extracurricular activities. I don’t know your family’s schedule, but it might assist if they found some new, inexpensive ways to spend the time they would have spent on extracurriculars. Perhaps you and your loved ones can now devote an evening each week to a friendly game or shared television program.


The time of family financial restraint can be used to develop values, teach children about money, and provide more leisure time. Making difficult decisions helps your kids feel like they have a voice in the family and shows them that you aren’t hiding anything regarding money. Your kids may have a hard time adjusting to less time spent on extracurricular activities, but they may also learn valuable lessons, including how to be more self-sufficient or enjoy the perks of having more free time. This adjustment to the budget may turn out to have been more of an opportunity than a sacrifice in the long run.

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