How much does your child know about your financial situation?

[KC225]

Background. DH was made redundant in September but we knew it was coming. It looks like there will be another job mid January, he is in talks but nothing certain as yet. He has picked up some causal work, one or two days week but obviously not what he was earning.

We have 11 year old twins. They know Daddy was made redundant and is looking for work and I have told them we may need to make changes. But that is it and as activities are paid yearly over here there has been very little impact on their lives.

So with Christmas coming up, I sat them down and said you can't have as much this year, there is a budget of £50.00 each to choose a main present. This has been put aside from earlier in the year as I love Christmas but refuse to put it on a credit cards. The children will also have a stockings of Tiger type stuff picked up throughout the year plus two decent surprise gifts each I bought in the UK summer sales. Both have accepted this year will be different and seem fine about it.

Today, I was talking to a friend with children around the same age and repeated the above papragraph. She said that I wrong to burden them with our financial problems and it will have long term damaging effects, making them anxious and insecure. I should add here, that although the house is being renovated we have no mortgage and can afford to live in it. She said we shouldn't have told them about the redundancy as they will be lying in bed at night worrying and we will ruin their innocence.

It got me thinking, is this right? In this day and age when there are no jobs for life, people are in an out of work, is this realistic? Is redundancy or being out of work something to be ashamed of in 2018? How much do you tell the children? How much do your children know about your finances?

I don't see a problem with what you have told them. Your friend sounds a bit odd to me.

I think giving them an insight into your finances will allow them to be better with money in the future. Growing up there were time my parents struggled which has now allowed me to be super careful with my money.

What you have said sounds brilliant as you are still allowing presents just different to normal. It also sounds as though your children are quite mature accepting what you have explained to them. I think the friend is overreacting. It's not as though the children are being deprived of anything.

I think that's perfectly fine. I talk about having a food budget, making sure we save for holidays, Christmas and general savings for the future. If he's been paying attention he'll also know we're paying off some credit card debt. We didn't used to be had to overhaul our finances to save for a house and thought that financial planning should be part of day to day conversation so he learns how people actually have to plan for the future.

Your family's financial situation aside, it's pretty normal to tell DC of that age or older that they will have £x spent on them at Christmas.

I think it's better to spell out to DC that your financial situation has changed and exactly what this means to them then tell them nothing and let them worry! At 11, your DC will work out that no job=less money whether you tell them or not.

my DC are teens but they know (roughly) how much we earn, how much we spend on essential bills, how much we put aside for things like holidays/house refurbishment, how much money is put in savings and what those savings are intended for, and what money is left.

They also have an idea what our spending priorities are e.g. if they ask for something educational they are likely to get it, if they want new latest gadget it's likely to have to be a birthday present (or not something we'll buy at all)

It doesn't sound like there's any need to be anxious in your situation, you've made cutbacks and you don't have a mortgage so I don't see a problem giving them the full information. Plus they understand why they are not getting as much this year instead of being disappointed on the day. If you were about to lose your house I would personally keep that kind of thing from them until they needed to know. Kids can get anxious about not having enough money so maybe just make sure they realise you're ok.

Weirdly my DD was worried about our financial situation a couple of years ago (there was no need to be) so I started to tell her a bit more about our finances to reassure her.

Your friend either has anxious children or was an anxious child?

One of mine would have just taken it as a fact, the other one is a deep thinker with a big imagination but I cannot always predicts what will worry him.

Overall though I think it would be wrong to cry and pour out your troubles to your kids, but a statement of fact like choosing a present worth only a certain amount is just that.
Given that your housing is secure, it’s probably a good life lesson that you can go through tough times and come out ok.
And how do you not tell your children about dads redundancy, they might just notice him not going to work!

Of course you have done the right thing, your friend sounds really odd, it is important for children to understand about finances/work etc and not to just think that they can have 'anything they want'. You sound as though you have had a very sensible discussion with your children.

I'm quite open with my DD(9) regarding our piss-poor finances. YANBU.

I earn a fair bit and what you are spending on the children this year seems normal even at my income level. How much do people spend on their children at Christmas? It seems to be getting out of hand.

As for children knowing about redundancy etc no reason not to tell them although there is never need to give them every last detail as that's private.

My children know that money is tight. All bills are paid and there is a spreadsheet I tick off as they go out to ensure we are on top of it all. Everyone gets pocket money - 8yo £2.50, 10yo £5 and adults (DH and I) get £10 per week. We can spend that on whatever we like. They know we save for Christmas with Park and they don't get the latest tech and brands as we can't afford them. They also know we are comfortable - we have our own home, no one worries about new clothes when they grow and there is plenty of food for everyone.

although there is never need to give them every last detail as that's private

Private?

I think she is very wrong. Honesty is better particularly since they need to understand that money isn't always on tap - this is not a bad life lesson. you have not overplayed it or given them too much information.

My father went through a serious situation as a victims of a violent crime when I was around 12. My parents, with the best of intentions, kept most of it from me including the ensuing trial. I became very stressed and actually had a breakdown - my imagination was running wild not knowing what was going on.

Children do pick things up however well adults think they are keeping things hidden so I'm always on the side of age appropriate honesty.

YANBU. There is really nothing to worry about. The only financial things I can imagine a child worrying about is if there wasn't enough money for food and heating, or if you had bailiffs at the door, therefore knowledge of your finances is not a burden for them.

Dd has always been aware of our situation. She hasn’t needed to know the full £/shillings/pence but it’s made her more aware of what is and isn’t achievable, and appreciative of what she has/has experienced

It sounds like you told them about your finances regarding less being available for Christmas, but not that your housing is secure or that your DH is likely to be back in work in Jan? Apologies if I've misunderstood!

I do think being realistic with kids about finances is fine, but I would try and be as reassuring as possible in the circumstances. In your shoes I would make sure they know you are belt tightening around treats, but that they won't have to move, change schools etc etc

Our children know too much! We’ve always been honest, never hidden bank statements or bill and discussed why belt tightening has been necessary. We’ve never hidden it and spent money we didn’t have to hide reality.
They think we’re a bottomless pit but do understand the ways money works and why it’s good to buy property young etc.

I think it's good to talk to DC about money in an age appropriate way (in the same way you get them to do a few age appropriate chores or teach them about healthy eating etc.) Because obviously you want them to know all that stuff before they go off into the world...otherwise one day they are suddenly 18 and you wander why they cant cook/iron/budget etc.

DS is 2.5 and knows grown ups go to work to get the pounds for toys and food and that he can only have for eg. one go on a ride in the supermarket or mummy will have no more coins in her purse.

I think what you have done is brilliant. They are at a good age to start to understand finances. Theyll never be taught this in school (which is an abomination by the way)

I think its fine to tell them - it's not like you are on the breadline and risking eviction. You have a mortgage free home and could claim top up benefits temporarily if need be.

When I was 7 (going on 8) my parents bought their house. They told me that they would be buying with a mortgage and explained that the mortgage repayments would be more than their rent had been and that the house would need work. That the purchase was expensive due to to legal fees, moving costs and the temporary bridging loan they were on. So we would have less money for a while and that included for my birthday and Christmas. I can't say for sure because I never lived the alternative, but I do believe that their honesty about the situation was much easier to understand and deal with than if everything had just changed and they were stressed about trying to hide it.

I'm honest with my 8 year old . I grew up in the 70s when my Mum was widowed aged 35. I knew things were difficult for her and it's not damaged me. It's made me careful with money now.

I believe it’s reallt sensible to talk to children about family finances/ budgeting/ mortgages/ the way credit cards work. All age approriately and as a drip drip part of everyday family chat.

I can see how a family really struggling, in poverty or who’s means change dramatically in a short time could really impact children if they knew all the ins and outs though.

At that age kids are like sniffer dogs and will hear bits and bobs and come up with 2+2=5. Being straight with them will likely make them feel more reassured as they know you have the matter in hand and your home isn't at risk. If they saw final demands and things coming in but no one ever mentioned money except for snippets of overheard arguments - that's where you get anxious children.

Our kids know exactly what we earn and what our main outgoings are - ie how much the mortgage costs. I don't want to protect their innocence. It does nobody any favours.

Ours is only four. We’re already making sure he knows where money comes from, what we use it for and that we don’t have unlimited amounts. I don’t think that what you have shared is inappropriate but maybe sit them down and ask if they have questions in case they are worried.