How Do I Explain Spending Cutbacks to My Kids?

If money is tight, it can be tough to explain to children why you can’t buy them what they want or what they’ve always had. Whether it’s the name-brand cookies or cereal they love or their favorite designer label, your kids may be accustomed to having certain things.

How can you share with them that the family needs to cut spending? Here are tips to get the conversation started.

• It's not just us. Explain that families everywhere are trying to cut costs.
• Be honest, but appropriate. Telling a child “no” to a request to buy something without explanation won’t help, but you shouldn’t place the burden of worry on your child, either.
• Answer their questions. Avoiding the conversation might lead to your child imagining things are far worse than they are. If you’re worried about a job loss or feeling burdened by debt, tell them — on their level — that you’re taking steps to improve the family finances, and encourage them to help.
• Make it a contest. Enlist the entire family to create new ways to save money, or have a coupon-clipping party. Give the winner a special treat.
• Teach by example. It’s unfair to tell your child she can’t have a candy bar because it’s not in the budget when she sees you buying a latte every day. Take the lead and your child will follow.
• Let them earn their own money. If your child is old enough to get a job, encourage him or her to work to earn spending money.
• Watch your words. When discussing money troubles with your spouse, don’t assume your kids are tuned out. If you need to speak privately, wait until you’re truly alone or until the children are asleep. 

If money is tight, it can be tough to explain to children why you can’t buy them what they want or what they’ve always had. Whether it’s the name-brand cookies or cereal they love or their favorite designer label, your kids may be accustomed to having certain things.

How can you share with them that the family needs to cut spending? Here are tips to get the conversation started.

• It's not just us. Explain that families everywhere are trying to cut costs.
• Be honest, but appropriate. Telling a child “no” to a request to buy something without explanation won’t help, but you shouldn’t place the burden of worry on your child, either.
• Answer their questions. Avoiding the conversation might lead to your child imagining things are far worse than they are. If you’re worried about a job loss or feeling burdened by debt, tell them — on their level — that you’re taking steps to improve the family finances, and encourage them to help.
• Make it a contest. Enlist the entire family to create new ways to save money, or have a coupon-clipping party. Give the winner a special treat.
• Teach by example. It’s unfair to tell your child she can’t have a candy bar because it’s not in the budget when she sees you buying a latte every day. Take the lead and your child will follow.
• Let them earn their own money. If your child is old enough to get a job, encourage him or her to work to earn spending money.
• Watch your words. When discussing money troubles with your spouse, don’t assume your kids are tuned out. If you need to speak privately, wait until you’re truly alone or until the children are asleep.