How to talk to your kids about money during Covid-19

Talking about your finances and the future can be difficult even among adults, but being direct and open with your children can spare them further anxiety, even in the worst-case scenario. Here’s how to discuss finances, lack of income, and job losses during Covid-19 with your children.  

Have the conversation

The coronavirus pandemic has caused heightened levels of anxiety amongst parents enduring reduced job security and lack of income. With our careers – and therefore our finances – under threat, it’s understandable that anxiety around these problems could trickle down to our children. Being open, honest, and caring is paramount. Families are going to have to budget to make ends meet, they’ll be tightening their belts and putting a pause on some of their luxuries, which is why you have to be very clear in explaining the situation to your children. Have conversations about how money is a finite resource. This can help younger children understand why you might be budgeting. Show them what you spend on groceries, essentials, and utilities like water and electricity. It makes them realise the value of certain things.

Talk about financial goals

As children become teenagers and young adults, ensuring they are setting financial, educational and career goals become increasingly important, especially with the uncertainty that goes hand-in-hand with a pandemic. Even though we may be in a financially precarious situation now, having medium and long-term goals doesn’t have to change. The role of us as parents is to financially empower our kids. Make sure they understand why spending habits have to change in a lockdown, for example – but also to prepare them for the future. Making sure children are on the road to becoming financially literate is integral, and advising them on how to save their money, rather than spend it on short-term wants, means having conversations about their futures. But it’s also about asking the right questions. Do you share ideas with your children about where you see them in the future and how they can get there? When they start earning money, are they still going to be putting it towards owning a home, education, or even travel? Do they know that they should always be saving for something bigger, better?

Plans and policies

While no one enjoys talking about death, the pandemic has shown just how vulnerable we all are to opportunistic diseases. If your children are old enough to understand the concept of death, they may be worried about their own lives and yours, which is why they need to know what you’ve done to protect them. Making sure that they’re aware of their insurance cover, or simply that they have access to quality medical care, is important. But equally important is letting them know whether their parents have funeral plans, life insurance, or savings that can support them should anything happen. Having cover for their education is also a great step towards investing in their future, especially if you are no longer there. Speaking to your kids about their future ambitions opens the door to having real conversations about what financial protection needs to be in place to ensure their journey towards achieving their ambitions is not derailed by the lack of financial capital. Conversations like these can be helpful for parents as well because it leads to introspection about their own plans and policies. You might realise where the gaps in your cover are, and help you realise if you need advice on how to fill them. It doesn’t have to be all doom and gloom but making sure your children know that you’re helping them prepare for the future can help ease the tension that comes with a pandemic. No one was ready for COVID, but by normalising these kinds of conversations, you can help your kids feel more prepared.