Gary McClain, PhD, is a therapist who specializes in helping clients deal with the emotional impact of chronic and life-threatening illnesses.
Adam’s chronic condition is well managed, but requires a couple of expensive medications and regular testing, along with frequent visits to his doctor. He recently received some news at his job that has left him with some hard decisions to make.
He learned that his company has adopted a new health insurance plan that places a much greater share of the cost burden on employees. Not only will the copayments on medication and appointments be higher, but he will also have a large annual family deductible to meet.
Adam has a wife, Sandy, and two young children. While Sandy also works full-time, staying ahead financially has been a continuous challenge. With the changes in insurance coverage, Adam and Sandy are going to have to make some hard decisions. Upon hearing about the change in his coverage, they identified the first one: They had promised their two sons, ages 10 and 8, a summer trip to Disney World. That will have to be postponed.
Just last week, his 10-year-old had asked them yet again when they were leaving. The next time he asks, Adam is wondering how to answer his question. He doesn’t want to have to disappoint him, but knows he has to. Adam is also concerned that his sons may fear that their home isn’t secure.
When finances are tight, communication needs to be free-flowing
Have you ever been in Adam’s shoes? It’s hard to deny your own kids something they are counting on, and that other kids are enjoying. It’s hard to talk to kids about money. Here are some ideas:
Remind them that you are all a team. Identify something they did recently to help out around the house, and thank them for being so helpful.
Be honest but also age-appropriate. You know your kids—what they will understand and what they may not understand. A child in high school is more likely to understand copayments and deductibles, for example. It may be sufficient to explain to a young child that Daddy/Mommy has to pay to see the doctor or to get medicine. Keep in mind that, in the absence of information, kids will make assumptions. Age-appropriate honesty is the best policy.
Welcome their reactions. Whatever they are. Kids are going to have an emotional reaction to being told their parents have financial limitations, especially if something they were counting on like a trip has to be canceled. They may also have thoughts that they are afraid to voice, or don’t think you will want to hear. They may be creating stories in their minds, maybe catastrophic ones about your health or the future of their family. So encourage kids to talk about what’s going on. “What’s going on with you? What do you think about this? How do you feel?” And then listen without judgment.
Be open to questions. Let your kids know you are there to answer their questions. “What else do you want to know?” Keep in mind that your kids may be as protective of you as you are of them. That can result in a whole lot being left unsaid, and leave your kids creating their own stories.
Provide reassurance about your health. One of the first things your kids are going to worry about when you bring up money concerns is what might be going on with your health. Specifically, what the future looks like. So, during this discussion, provide them as much reassurance as you can. “I have a really good doctor. And I promise to take really good care of myself.”
Offer something in exchange. Sure, you can’t afford everything you’d like to do for your kids. But is there a compromise somewhere? Adam promised his kids a day trip and let them choose the destination.
Set expectations for the future. Review what won’t change—for example, day trips and holiday celebrations. Again, be honest. If it may be possible in the future, be clear about what has to happen first, and how likely that is. If you can’t do Disney this year, is it something you can save for and try again next summer, or maybe the summer after? If something you can’t afford will most likely remain unaffordable, also be clear about that.
Leave the door open for more discussion. Talking to your kids about money may have raised concerns they hadn’t thought about before, or confirmed something they had suspected. So let them know you are willing to answer any other questions they might have later. You might even bring it up again, and invite them to revisit the conversation. If you don’t keep the door to further discussion open, this could turn into an “elephant in the room,” one that can lead to stress.
Make this a building block. Setbacks like canceling an event or a purchase due to finances can be a teachable moment. It never hurts kids to recognize that we can’t always have everything we want. And that their parents love them in ways beyond what they buy for them. See this as an opportunity to bring your kids into future discussions—and decisions—about family finances.
You, your finances, and your family. Money challenges can be a stepping stone toward bringing you and your loved ones closer. And promote growth as individuals and as a family. Keep the communication honest and open. After all, you’re a team!
How have you handled talking about money problems with your kids? What advice do you have for others? Add your comment below.