When Katy Almstrom had $40,000 in debt, she was constantly stressed about money. After paying off the debt, she realized what an emotional impact it had on her life. Today, Almstrom works as a financial coach and often sees families under emotional duress from their finances.
“Having financial stress is just going to shine a spotlight on anything that is not going well,” she said. “Money touches everything. It can make those stressful times even more stressful.”
It’s easy for kids to absorb negative ideas about finances when they see that money is constantly causes stress for their parents.
“A lot of people grow up thinking money is bad and bad things happen because of money,” Almstrom, a mom of two in Lebanon, said. “That causes a lot of issues around money. How can we put kids in the driver’s seat so that they always have a choice?”
Rather than just telling children “No,” or “We can’t afford it,” Almstrom suggests talking to them about making choices with money. Explain that you’re choosing to use your money in a certain way. If possible, give your child the power: If they want to buy a new toy, explain that would mean choosing to use the money that would otherwise be used to buy a Friday night pizza. Which would they prefer? For larger items, suggest working as a family to save up.
This changes the messaging around money, showing that you (and your kids) are in control of your money, rather than being victims to it, Almstrom said.
“It’s a mindset shift,” she said. “When we talk about money with our kids, we want to feel like we are making the choices. It is our money and we’re in control of how we use it.”