12 tips to help your child cope with money worries

12 tips to help your child cope with money worries

GoHenry's latest research shows that 71% of kids are worried about the cost of living crisis. So even if money isn’t openly discussed in your home, your kids are likely concerned. Here's how to help them cope with any money worries they might have. 

 

Is it normal for children to worry about money?

 

It's normal for children to feel anxious about different things at different ages. Many of these worries are a part of growing up, but some concerns result from what's happening around them. Current talk of rising costs and cutting back on spending can filter down to kids through media reports, playground chats and any conversations they overhear at home. 

 

How can family financial issues affect a child?

 

Children can feel anxious and worried when financial issues are hidden or expressed in confusing ways. Many start imagining the worst, letting their fears grow out of control because they don't know how to handle this information. 

 

Reasons kids worry about money

 

  • Hearing arguments at home about money
  • Hearing daily conversations about money and money saving
  • Not having the same things as friends
  • Hearing you say you have no money
  • Not understanding families' finances
  • Being told that you can't afford stuff without explanations
  • Watching your behaviour when out shopping 
  • Not understanding why their lifestyle has changed
  • Having a friend talk about money and family worries
  • Knowing that money is a taboo subject at home

12 tips to help your child with their worries 

 

1. Talk honestly about money

 

The most effective way to combat your child's fears about money is to make talking about money and finances an honest and open conversation at home. It doesn't mean burdening them with your worries but more about saying, "We are cutting back and trying to spend less money right now. If you have questions, ask us."

 

2. Make conversations age-appropriate 

 

Start by finding out what your child knows about the cost of living crisis (bearing in mind they will have picked up on certain aspects at school). This allows you to reassure them about their specific fears in a way that’s appropriate for their age.

 

3. Keep serious financial information between adults

 

Honesty is good but keep more serious conversations away from children. Hearing that you are worried about losing your job, or fretting that you can't pay your bills will worry them unnecessarily. If you need to cut back, explain what's happening and get them involved in fun alternatives to takeaways or days out.

 

4. Be a good financial role model

 

Kids are like sponges, soaking up everything they hear and see. So make sure you model what you say around money, spending and budgeting.

 

5. Start early with their financial education

 

Financial literacy is crucial right now because it gives kids the ability and confidence to understand what's happening and make informed future financial decisions for themselves.

 

6. Listen to their fears, no matter how small

 

It's easy to dismiss kids' money fears, especially if the worry seems small. Instead, acknowledge their anxiety and reassure them that it is not something they need to focus on. 

 

7. Make sure they understand what you are saying 

 

Some worries and fears stem from not understanding what you say about money saving. Always ask younger kids to reflect back on what you have said to ensure that misunderstandings don't happen.

 

8. Let them manage their own money

 

Giving children pocket money and the power to manage their own money can reduce their anxieties around money management. 

 

Louise Hill, COO and co-founder of GoHenry, agrees. She says, "If there's just one thing you can do for your kids right now, I'd say it's giving them pocket money, even if it's just 20p. It doesn't matter how much, but if you can give them money they can control and make decisions over, it will empower your kids. It lets them make decisions, make mistakes, and help them better understand what's going on now – and in the future."

 

9. Teach them about needs versus wants

 

Explain what needs are compared to wants. Then show them they have everything they need, but if they want something, they must save their pocket money. Beth Zemble, VP for Education, GoHenry, agrees, "Research from the CFPB (Consumer Financial Protection Bureau) has shown us that kids start to develop the values, skills, and attitudes surrounding money and financial habits in childhood. They also begin to develop skills like planning ahead and can understand the concept of delayed gratification.”

 

10. Remind them of everything you have

 

All children compare themselves to their peers, so it's important not to make light of their emotions around this. However, also remind your child of all that they have. Make it a game and see who can come up with the best list of everything your family has to be grateful for.

 

11. Get kids involved in money-saving tricks

 

Get your kids involved, from going around the house and switching all the lights off to turning off gaming consoles and phone chargers and finding budget items in the supermarket. 

 

12. Encourage kids to earn money

 

Data from our latest Youth Economy Report shows that GoHenry kids in the UK earned £148 million in 2021. Encouraging your kids to do chores for pocket money or get a part-time job is also a great way to show them the benefits of earning and the value of money.

 

How GoHenry can help

 

All the skills you teach your child about financial literacy can be put into practice with a GoHenry prepaid debit card. It's key to helping children from the age of six onwards become financially responsible. Money Missions on the GoHenry app takes this further by taking kids through key lessons around spending, saving, budgeting and more with fun quizzes and videos.

 

 

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Goal setting steps for kids

 

Reward system for kids

 

Needs vs wants

 

What age should a child have a phone?

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Written by Anita Naik Published Nov 29, 2022 ● 2 min. read