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How do you tell your children you are in debt?

If you’re in financial trouble you need to talk to your children about it but how? And how much to say?


You have got into a debt problem.  The situation has been faced and help sought. Now all that‘s left is to tell the children.

It is important to keep them informed. Children have very active imaginations and depending on their natural disposition, might have you living on the streets wearing rags already. The information you give them has to be tailored to their age and character. As a parent you will know best what your child will be able to cope with.

It will probably be best not to tell younger children anything more than that money is a bit tight at the moment, but you love them more than all the money in the world. If you’ve lost your job, then your children will be wondering why you are at home and you will need to talk about that. Isn’t it fun to be able to go to the park together?

School age children will understand a lot more and will hear horror stories in the playground. Children are sometimes teased for having cheap snacks, clothes, etc. You will have to be honest with your children and explain that the financial situation has changed and that everyone will need to pull together to get out of debt. If the financial problems are due to the break-up of a relationship don’t blame the other parent. The children will still have a relationship with the other parent and undermining that relationship doesn’t serve anyone. Don’t give in to pleading eyes and feelings of guilt and splash out on things you can’t afford. Children don’t want to be different to their peers, but it is better for them in the long-run than to live in debt longer than necessary. Make sure you are seen to make sacrifices too. It isn’t fair if riding lessons are cut, but Daddy still plays golf!

Teenagers will be able to become part of the solution. They are old enough to earn money for themselves, which they could chose to contribute to the household (ok, not likely, but it could save on allowance). As part of the curriculum they should have received education on debt and household management. They will probably be able to teach you – and will be very willing to do so!

In every case, don’t make the situation worse than it is. Stick to the facts and don’t speculate on what might happen. Yes, you might lose your house, the bailiffs might come round, but all these are to be faced if they happen. In the meantime, focus on the positive – what are the important things in life? (The correct answer is family, relationships not money & things!) What can you all do to focus on these & use any extra time to enjoy them more?

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