Many families are being hit hard by the recent economic recession and will probably be celebrating a little less excessive Christmas than normal as a result. This can mean making inexpensive homemade Christmas decorations and decorations or buying items in the dollar, using more economical Christmas gift ideas and starting Christmas shopping early to save money and reduce holiday stress.
You might relate. Your children may expect the usual loads of gifts on Christmas Day, but this year it’s just not in the budget.
So what should you do? You certainly cannot disappoint the children, but at the same time you cannot afford to live beyond your reach.
An answer to this difficulty is simply to be honest about your financial situation with your children. Below are 8 important reasons why this can be a good option to teach your children about money.
8 reasons to be honest with your children about finances
1. Be a good example
If you look like me, you always want to be a good example for your children in all aspects of life. However, we often struggle as a nation to show our children how to properly respect and handle money. If you have financial difficulties, you can be a good example for your children by showing them that you refuse to live outside of your own resources, even when it’s on vacation. Buying gifts is not a good reason to use credit cards and take a step in consumer debts, and teaching children not to borrow money when possible is an important lesson. Show your children how to use your money responsibly. This can be a costly learning opportunity for them that leaves a lasting impression even in adult life.
2. Avoid overspending
If you are honest with your children and tell them in advance that they will not get that many presents this year, this should help to avoid excessive spending and minimize some of the disappointment. It is difficult not to give your children too many presents, but if you discuss the situation with them and they know what to expect, it is much easier for you to stay with your budget and avoid over-spending. This can also be a good time to teach your children to save by making a piggy bank or by using an oPorthosine family benefit management tool such as ThreeJars. That way, they can still earn some of the toys and items they were hoping to get for Christmas by saving themselves.
3. Learn honesty
The best way to teach your children the virtues is to be virtuous themselves. As the saying goes, you must practice what you preach. To be honest, you not only have to tell the truth, but you cannot withhold the truth either. This naturally includes information about your difficult finances. You may think it is better to keep your children in the dark with some problems (and there are some cases where this is true), but finances have a major impact on your children’s daily lives and they should understand what is going on going on.
4. Bring the family closer together
Life is not always easy, but it is easier to handle if you focus on the good in a situation. One of the positive things about a difficult situation is that it brings people closer together. So why not bad for good use by forging stronger bonds in your family during the holidays!
5. Get the help of the children
Children are very smart. They question everything and think outside the box. I’m not saying you have to trust your children to think of ways to get you out of a sticky situation. What I want to say is that it’s okay to ask your children what they think they can do differently to help the family. Although parents are ultimately responsible, this is a great way to teach children responsibility while jumping in to contribute.
6. Show your children the real world
In the real world, money does not grow from trees and sometimes the money is tight. By being honest with your children, you have a springboard to talk to them about being realistic about money. Many families are going through difficult financial times, and it is nothing to be ashamed of. Help your children realize that they cannot always get what they want and that there are more important meanings of holidays than just gifts. That is great financial advice that you can give as a parent.
7. Help them to avoid making the same mistakes
If you are in a difficult financial situation outside of your fault, this does not apply to you. However, if you have made some bad decisions, let’s say with regard to credit, this is a perfect time to teach your children about your mistakes and how they can avoid the same pitfalls. They will see the consequences of bad decisions and irresponsible expenditures firsthand and will therefore be much better off.
8. Be optimistic
Show your children that despite challenging times, you are still hopeful and optimistic about a wonderful Christmas and a fruitful new year. Be an example of how to take control of a difficult situation. And if you are a religious family, show your children that you still have faith despite the fact that you may not be financially blessed.
Do you have to be honest with your children about having a lot of money?
Now consider the downside. What about families who have a lot of money? Do they also have to be honest with their children about their financial situation? Absolutely! Show your children that having money does not mean that you can go shopping. You still have to be responsible for your money, even if there now seems to be a large offer.
How to be honest with your children about money
It can be difficult to discuss a stressful topic such as money with your children. Here are a few tips to make it a little easier:
- Reassure your children that everything will be fine. Don’t just say you don’t have money and leave it at that. Instead, explain what you have money for and explain what types of lifestyle changes are needed. Focus on the positive points and ask them to contribute ideas on how you can save or earn money for the family.
- Keep an open dialogue on finances. Ask if your children have questions and problems. Continue to teach them along the way and involve them as much as possible in improving the family situation.
- Make sure your children know how much you love them. Spend some extra time with them. Maybe you can lose the cable and have a family home evening. There are quite a few activities for children who do not need money. Quality time with parents is very important for children, often more than physical gifts (isn’t this a common theme with many holiday films?).
Have you ever been in a difficult position where you had to be honest with your children about your financial situation? If so what is your story? Share your experiences in the comments below!
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