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As a parent, you’ve no doubt seen both your life and the lives of your children upended by COVID-19. Your children probably have lots of questions about money and jobs, maybe even the entire economy.
They may worry that you’ll lose your job or house. And although studies have shown that half of parents are reluctant to talk about money with their kids, now is not the time to hide financial information from them. Instead, make a plan to talk with your kids about money and teach them the fundaments of good personal finance.

Start the Conversation – Stay Calm

With Coronavirus wrecking havoc on our economy and many of our wallets, this is actually a great time to talk with your kids about money, even if they aren’t asking. They may be curious but afraid to bring it up. Just make sure you have a plan in place to talk about your values and money.

Tacoma based Nicole Durham grew up with a family that never talked about money. She’s determined to do things differently with her six year old daughter and two year old son. Since COVID-19 hit, her six year old has had a lot of questions. “I always do my best to answer them truthfully and in a way that she can understand,” said Durham. That’s important–kids can tell when we aren’t being honest with them.

Durham hasn’t seen her income change, but that hasn’t stopped her kids from fearing the worst. “With the pandemic, my oldest fears that we won’t have money for things that we need or that my husband or I will lose our jobs,” said Durham. Telling kids everything will be alright without giving them details is unlikely to alleviate their fears. Instead, by giving them knowledge and understanding, kids can feel empowered about money.

But when COVID-19 hit, Durham wasn’t starting from scratch with her kids on the topic of money. Durham said: “I have always been open and upfront about our budgets with my daughter when she asks for something.” Last Thanksgiving her daughter was hospitalized with a double kidney infection. Durham had to use part of their emergency fund for that–something her daughter knows about. “My daughter is pulling from that memory of us talking about how we’re smart with our money when we discuss current events. Our emergency fund has been replenished and doubled since then. Thankfully we haven’t needed it yet,” she said.

Having a base of understanding about finances certainly helps, but if you are starting from scratch, Durham’s advice on staying calm and having a plan will help you through that first conversation. “The biggest thing we’ve learned about the way that we talk to her is that she needs to see my husband and I on the same page and that we are calm. It really helps her to feel less scared knowing that her dad and I have a plan and are prepared for what is to come. I think the best thing we can do to help her out during this time is to have her feel safe and secure,” said Durham.

That’s a sentiment echoed by Michael Hess, a wealth management advisor at WestPac Wealth Partners with two daughters age 12 and 9. “First and foremost my wife and I will never let our daughters be alarmed about finances,” he said, adding that it’s important to talk about finances in an age appropriate way.

Lately, his children have both had hard questions. “Are we going to be ok?” What happens to the restaurants that we used to go to? Are you going to lose your job since you have to work from home?” he said. It’s important to address those questions and put them into terms your kids can understand. For Hess, his nine year old daughter is interested in bake sales. So he used that interest to talk about supply and demand (a concept she’d been asking about).

Reinforce Fundamentals – The Importance of an Emergency Fund

If this is your first conversation about money with your kids or even if you talk about finances every day, now is a great time to talk about savings. Let your kids know that life is full of unpredictable events–like the recession we’re seeing because of the coronavirus pandemic–and while we can’t know what is going to happen, we can prepare for the unexpected.

Emergency funds are a great starting point because they encompass so many different aspects of personal finance–understanding your monthly expenses; making a budget; learning about paychecks and what comes out of them, including taxes, retirement contributions, health care, and more.

Shannon Serpette has taken this time to reinforce the values of savings she’s taught her two children, age 12 and 14. Because of COVID-19, her husband’s salary dropped 10%. Since they already had an emergency fund in place, she has been able to reassure her kids that they are financially sound. It’s a practice she has them do too, saving money from gifts throughout the year. “They can see now how they have been smart to save some of their money over the years,” Serpette said.

She’s not leaving it at that though. She’s shared with her kids the family’s expenses. They’ve discussed how they are saving money because of her state’s shelter-in-place-rules: her husband isn’t driving to work every day and they aren’t ordering from restaurants. That knowledge helps them feel informed.

Serpette has given her kids not only knowledge but power too. “My kids and I have sat down at the computer and looked up stocks to see which ones might be a good investment right now. They’ve made recommendations as to which ones they’d like to see me buy. And I’ve taken some of their recommendations, buying a small number of their stock picks, while stressing that we are able to do this solely because we have emergency savings and enough money coming in,” Serpette added.

Cutting Back and Helping Others

But financial chops go beyond saving money. Robin Rucinsky has taken this time to work with her kids on cutting back on food waste, both to save money and avoid going to the grocery store. “The school district here is partnering with the food bank to offer kids in need free lunches while school is out. We told our kids about this program, shared that going to the grocery store is a limited event these days, and explained that wasting food is no longer an option in our home,” said Rucinsky.

Her family is donating to the local food bank and Backpack Buddies, an organization that helps food-insecure-kids. “Backpack Buddies has partnered with our local food bank during this crisis to get food to kids at home,” she said. Wrapping up all these lessons together helps teach kids about budgeting, frugality, and giving.

Even when families have emergency funds, they may still find themselves cutting back on expenses, hoping to make their emergency fund last longer or trying not to deplete it entirely. Nadia Malik, a mom of three kids in Dallas, has been open with her children about cutting back on unnecessary expenditures. Her kids are now asking her about the costs of groceries–giving her the opportunity to calmly reinforce her budgeting lessons.

Weathering Tough Times

Crises bring financial hardships but also opportunities (even if it’s only to do things differently when money starts coming in again). If you are one of the 17 million Americans who has filed for unemployment benefits over the last two weeks or have lost your job and are not receiving a paycheck right now, there may be resources out there for you.

If you can, talk calmly to your child about what’s happening to the economy–remembering that losing a job or having your hours cut is not your fault, nor was it foreseeable. You can also talk about the government programs (both old and new) that are intended to help us all get through this unprecedented health and financial crisis–expanding unemployment benefits, increasing loans to small businesses if they keep paying their employees (these look like they will be forgiven, though the guidance on this is still unclear and the roll out has been heavily criticized). If you need more information on this, check out NPR’s guide and if you are having trouble paying your bills, check out our guide on avoiding foreclosures and lowering your bills during the crisis.

Related: What to Do When Your Mortgage Payment or Rent is Late During a Pandemic

If you don’t have the savings you’d like, this is a time to talk about how you want to do things differently. It’s important for our kids to know we’ve made mistakes too, but that we can always choose differently. And before we get to some of the online tools you can use, a parting thought about talking to your kids. “One thing I recommend is to engage whenever your son or daughter wants to know more about finance,” said Charles Thomas, a financial advisor.

Tools to Help You Teach Your Kids (or Let Them Practice with Money)

If you aren’t sure where to start, there are plenty of online resources to help you teach your kids.

ActivityHero LIVE has interactive classes online for kids. “Our online financial classes for kids have been popular – almost 300 children registered for our very first class on March 24th with special guest BrainVyne. Our expert teachers explore topics in financial responsibility, budgeting and planning for kids.” They are running a free class on budgeting and saving on April 16th.

FamZoo is a hands-on way to let kids practice with their own money. It’s a virtual family bank that lets you create IOU or pre-paid card accounts for your kids. There’s no better way to learn how to deal with money than by practicing with real money. See our review of it here.

Though this is targeted at teachers, parents who don’t know where to start can look at the resources on TeachFinLit for ideas. And the High School Financial Planning Program has a resource section for parent.

If you find yourself talking about stocks or your kids are interested in investing, try the Stock Market Game. It lets your child invest pretend money in the stock market and then you can see what happens. It’s a great tool to learn about stocks, and with the market in turmoil it’s a great way the whole family can understand volatility.

PwC’s charitable foundation has resources for kids to learn about finances, from kids in grade 3 – 12.

Similarly, T. Rowe Price has a site dedicated to financial education for kids.

Goalsetter allows kids to start savings for their big dream–a Star Wars toy, a new car, a trip with their best friend.

The Consumer Financial Protection Bureau has activities and milestones that parents can use as they talk about finances with their kids.

So take this opportunity to start talking to your kids about money, even if it feels a bit awkward at first. And if you do, let us know what worked (and what didn’t) in the comments.

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