Exposing Children to Financial Problems Can Be Harmful

Hello, and welcome to Your Money 2.0. I’m Thomas Fox, Community Outreach Director at
Cambridge Credit Counseling. Recently, there’s been some debate about whether or not parents
should share information about their financial difficulties with their children. Some parents
find it helpful, while others completely disagree. Should you share money problems with your
child? Well, that may depend on the situation and your presentation. As a financial educator,
I believe it’s important to discuss the concept of money. However, as someone who
split their adolescence between a stable household and one that had its fair share of money troubles,
I believe sharing too much can be debilitating. Financial psychologist and author Brad Klontz
believes children who are inappropriately involved with adult financial matters can
be left feeling insecure. Based on my own experience, I’d agree. Throughout most of
my teens, we’d receive calls from bill collectors, participate in “landlord evasion” drills,
and were often left wondering where our next meal was coming from. While it’s good to
be on the same page as your parents, it’s paralyzing to think financial matters can
disrupt your life at any moment. The sense of security that allows young adults to focus
on creating their own path is life is stripped away.
Now, by deciding to be honest about their money troubles, my parents were not being
intentionally malicious. After all, we could tell something was going on. Although we sensed
things were bad, our conversations about money were bare-knuckled exercises in just how bad
things were. As my parents unburdened themselves, I could see a measure of relief in their eyes.
I’m not so sure they noticed the fear in mine, but for a brief moment their minds were
at ease. Was it selfish on their part to gain a bit of peace at the expense of their children?
As much as your financial situation is beyond control, your child has even less control
over household finances. Children rely on parents, not vice versa. Sharing too much
negative information can diminish the child’s ability to grow, learn, and become a confident,
functioning adult. Children can also develop an antagonistic relationship with money, which
could lead to larger issues in their adult life. Thankfully, I found a home here at Cambridge
and have been able to work through my own issues with money. I’ve also tried to apply
my own experiences to help others deal with serious financial concerns. Unfortunately,
most children who’ve grown up under the same circumstances aren’t so lucky.
Perhaps the best conversations about money are those that focus on responsible spending.
Most Americans are financially illiterate, but the good news is there are many worthwhile
programs out there. If you have a young child, I encourage you to visit www.itsahabit.com.
Sammy Rabbit, the cute and insightful mascot, offers a wide array of engaging lessons that
help promote fiscal responsibility. For older children, I recommend many of the great programs
offered by Junior Achievement, or JA. JA provides age-appropriate lessons for children enrolled
in k-12 education. These programs are provided through your local school system by volunteers
from the business community. Contact your child’s teacher and ask if they participate
in any Junior Achievement programs. If not, call your local JA to learn how you can bring
this valuable education to your child’s school.
Our current economy is challenging for many folks, and we may be tempted to be more open
about our finances than is truly necessary. Your child wants to help, but many are unprepared
to do so in the way some parents would like. Professor Rand Conger has some advice for
parents, and it really hits home. Professor Conger recommends that we have insightful
dialogue with our children about money, using financial challenges as teachable lessons.
He also recommends allowing your child to be supportive. Get them involved in cost-saving
measures and conversations about how everyone can pitch in during difficult times. And when
times really get tough, hold them tight and be thankful for what you have.
Well, that’s it for this edition. As always, we welcome your feedback and ask for your
thoughts and suggestions by e-mailing us at yourmoney2@cambridgecredit.org. Thank you
for watching. Until next time, I’m Thomas Fox for Cambridge Credit Counseling.