Talking with your children about family money issues and the family budget can be a difficult conversation. Parents are often afraid of scaring their children by making them think that the family is having money issues, but it can be difficult for younger children to grasp the concept of finite money anyways.

Younger children will ask for anything and everything that interests them. They see the commercials for a new toy, but their young minds do not truly understand the real cost of buying it. It is highly recommended to begin having regular conversations about money while your children are still young. Although the concepts won’t fully register with them, it is helpful to consistently frame their wants in terms of the costs. Try explaining that instead of spending $50 on a new game, you need to buy groceries with the $50. This can help younger kids realize the trade-off and it gives them a feel for what needs your family can satisfy for the same amount of money. Try to keep a positive tone to your money conversations and keep your patience if your child doesn’t seem to understand.

With older children, the concern is often that they will learn about the family’s money issues and become fearful. While it is unfair to put the burden of financial problems on the shoulders of your child, it is important to let them know that money is tight and that everyone will have to make some sacrifices. Try to remain strong whenever talking about money issues with your children and let them know that thing will work out and there’s no need to worry. Allowing the child to know that money is tight will help him or her at least understand the situation and why you are unable to buy them the things they want at the moment. As kids get older, they are generally much smarter than we think and they will catch on to any money issues in the family. It is much better to address them directly and control the child’s perceptions than to allow you child to guess at the true situation.