Whether from a recent job loss, the added costs of inflation, or longer-term challenges, families dealing with financial strain might find themselves faced with several worries: What’s the best way to discuss financial limits as a family without stressing out children? How can parents support children’s well-being while taking care of their own?
“Financial problems are one of the most stressful things that can happen to a family, and they’re also very common,” said Kathryn Grant, PhD, a professor of psychology at DePaul University who studies ways to protect children from the negative effects of stress.
Children are more likely to face mental health problems if they grow up in a family that is low income or has significant debt, factors with long-term consequences, psychologists say. Kids report feeling stress and anxiety, guilty for not being able to help, and embarrassed about being unable to afford what their peers can.
Research by Grant and others show that financial strain can also be hard on kids because of its effects on parents, who are often coping with their own stress, anxiety, or depression. And money troubles often lead to conflict with a spouse or partner, which is known to be harmful for children.
But there are ways to help, backed up by decades of psychological research. Talking to kids about money can give them a chance to ask questions, express their feelings, and even get involved with solutions. Social support—or help from friends and family with daily tasks and emotional needs—is another powerful tool that can help both adults and children get through a tough time.
Here’s advice from psychologists on how to best support kids in times of financial hardship:
Be proactive. Having less money for clothes, toys, and activities can interfere with the sense of “togetherness” that makes kids feel connected to their peers. Kids with fewer possessions might feel embarrassed or worry about being teased, said Amanda J. Rose, PhD, a professor of psychological sciences at the University of Missouri–Columbia who studies emotional adjustment in children and children’s stress caused by their peers.
If teasing becomes recurrent or rises to the level of bullying, seek help from a school counselor, teacher, or administrator.
Parents tend to underestimate how much kids notice and what they’re capable of understanding, but it’s important to be honest and discuss the situation in an age-appropriate way, added Rose.
Starting a conversation helps:
- Build trust between you and your child
- Give kids clarity about the situation, so they don’t worry about imagined problems
Ask kids about their emotions. When kids pick up on financial stress in the family, they may be anxious about getting the items they need, feel guilty for needing things, or think that the problems are their fault. Younger children may show signs of physical distress, including stomachaches or trouble sleeping. Other symptoms can include anxiety, anger, or stubborn behavior.
Parents play an important role in teaching children how to express their feelings. If you notice a physical, emotional, or behavioral change in your child, ask about it. Then, listen to your child and allow them to share what they’re feeling without judgment. Parents can normalize the acceptance of all feelings by saying things like: “It’s OK to feel sad. It’s OK to be scared.”
Explain the problem and the plan. Research on stress in children suggests that positive, proactive framing can help put kids at ease. Start by calmly conveying the situation and explaining what action you’re taking: “We don’t have as much money as we’d like to, but we have a plan that will help.”
Address fears and feelings of guilt with reassuring statements like: “This isn’t your fault. We can afford to get you everything you need, so try not to be concerned about that part.”
Try to avoid saying “we can’t afford that” and other statements conveying the stress of not having enough money. Instead, emphasize the importance of budgeting and not being wasteful. For example: “This might not be the best way to spend our money, because I know we want to save up for something else.”
“Rather than focusing on the stress of not having enough, it helps to emphasize the importance of budgeting and being cost-conscious,” said Rose.
Reframing the problem. For most types of stress, psychologists recommend using active, engaged coping strategies, rather than ignoring the problem at hand. When money is tight, involving kids in a family’s financial plan can help them feel like they’re taking action, said Rose. That may mean making joint decisions about spending and saving.
On the other hand, when a problem is outside of a child’s control—which financial hardship can be—it also helps to get kids’ minds off their troubles, said Grant. That might include enjoying nature, playing with a pet, taking a hot bath, or eating a favorite food.
If your child mentions negative thoughts or beliefs (“things are never going to be the same” or “we’ll never be happy again”), use a psychological tool known as “cognitive restructuring,” which can help them reframe the situation in a more positive light. For example: “There are ups and downs in life, and this is a hard time. But we can weather this storm together and get through it.”
Ask for help. Seeking social support, which can include everything from emotional care to help with everyday tasks, is one of the most effective ways to cope with stress. Getting support from friends, neighbors, family members, or a therapist can help ensure parents have the bandwidth and energy to support and nurture children. If you have a spouse or partner, try to find support for the relationship, too.
At school, kids can talk to a counselor or psychologist. If your child shows lasting or significant changes—such as big shifts in appetite, sleep, or personality that last a few weeks or more—working with a mental health professional outside of school may help. The Jed Foundation and Healthline have suggestions on how to find affordable mental health care.