How to Talk to Your Kids About Tightening the Family Budget
By: Renae Bieder
Renae is a fellow personal finance nerd and debt freedom enthusiast. She raised two children and helped pay for both their college educations while paying off substantial student loan debt herself.
When you make the decision to really attack your debt and boost your savings, it is a big adjustment for everybody in the family. It can be especially difficult for your children because adjusting their lifestyle is likely a decision that is being made for them. However, there are some ways to make the transition easier and to get them on board with family budgeting.
1) Be honest, but keep details to yourself.
It is perfectly fine to explain to children that you are cutting back on expenses. However, you don’t need to share the ins and outs of your bank accounts and debts. Only tell them about those things that directly affect them, like less trips to the ice cream shop or cutting back on holiday gifts.
2) Reassure them that everything is okay.
Kids’ imaginations can run wild so be sure to let them know that just because you see a need to cut back on expenses, it does not mean that their security is threatened. Food, shelter, heat and love are still in abundance.
3) Identify their non-negotiables.
I remember watching an episode of Oprah, where a financial consultant told a guest that she should cut back on going to the hair salon and do her own hair to save money. Oprah interrupted the consultant and said, “You obviously don’t know Black women's hair – that’s a non-negotiable”. Some of the things you may think are easy to cut out, may mean a lot to your kids. Some examples for younger children might be sports lessons or instrument rentals. Teenage non-negotiables may be going to prom or taking driver’s training courses.
If you want your children to be on board – and maybe even excited about this process – then it’s important to listen to what is most meaningful to them. If their non-negotiable is very expensive, this may be a good time to get them involved in brainstorming ways to make it less costly. And hey, by doing this, they may even end up learning some great lessons on money management for themselves.
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4) Have replacement family activities available.
It might be hard for your children to hear that the family is no longer going out for dinner every Friday or going on a big family vacation this year. However, it may soften the blow if you can substitute other family fun. For example, cooking together instead of going to a restaurant or a camping or beach trip instead of Disney World.
5) If it’s a viable option within your budget, allow your children a chance to earn and prioritize money.
This may not be feasible until some of your money gets freed up. But if possible, it might be beneficial to let more reluctant children earn some money around the house. That way, when they want to do something that is not budgeted for, you can suggest that they use their own money. This gives them a lesson in two areas: 1) working to earn their money and 2) prioritizing their spending. They may find that when they must pay for something themselves, it’s not really all that important after all!
6) Focus on the positive outcomes.
Help your kids see the long term benefits. Explain how budgeting and saving will directly affect them. Will this allow them to eventually have their own room? Will this allow you to start a college fund for them? Some of the long term goals may seem a bit elusive to younger children, but just hearing that you have thought of them and are doing this for them too goes a long way.
A bit of encouragement…
Telling children that they have to go without things that they’re used to can be tough. They may feel frustrated and push back on your plan to tighten up your spending. Remember, though, that they are watching. They are learning how to manage money from you. The habits that they see you practice are likely to be the habits that they adopt as adults. Deciding to manage your money responsibly is a huge parenting win as well as a sound financial decision. Your kids will eventually thank you for it.
Conclusion
Cutting back on spending in order to get out of debt or build up savings is great! But it’s important to remember that it involves sacrifice for everyone in the family – including your kids. Hopefully, the suggestions above will help you navigate the changes more smoothly and successfully, in a way that your kids can better understand, appreciate, and be on board with!
What are some other things you feel are important to address with your kids when tightening the budget? Share in the comments below!
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