How to talk to kids about family finances

You’ve talked to your kids about the importance of washing their hands, keeping their distance from others and why the playground is closed. But what about their money questions: How long will mom and dad be working from home? Why has the family summer vacation been canceled, and what’s happening to my college savings account?

As coronavirus spreads across the country, the questions about family finances are growing.

“In this unprecedented time, there is focus on protecting our financial well-being as much as the physical health and safety of our families,” said Paul Golden, a spokesman with the National Endowment for Financial Education in Denver. That’s why he recommends having regular conversations with children about how the family is being affected financially.

How do you do it? Two starting points from experts:

■ Be honest and share age-appropriate details. Most kids’ concerns are how the coronavirus pandemic personally affects them, so be honest and clear about any changes in the household routine and how long they might be in place.

“This is the time now, when you’re home, and you can talk about it at dinner and see what’s on their minds,” said Susan Beacham, the owner of The Money Savvy Generation, a financial education services company.

■ Encourage your children to take a more active role helping around the house and let them know they can be part of the solution to getting through the crisis.

This might include putting a child in charge of turning off all unnecessary lights to scale back on utility bills or planning meals and doing some cooking. If you have collegeage children home with younger siblings, big brother or sister can help with reading or using the computer.

Ask your children for other suggestions on how they can help.

Some other practical advice for your conversations with your kids:

■ If possible, continue paying allowances. “Once you’ve started these routines, you really don’t want to let go of them,” Beacham said.

But if you need to cut back on the weekly allowance, consider paying in another currency, such as pretend money that can be redeemed for ice cream from the grocery store or having first choice on takeout pizza.

■ Create a short-term and long-term goal sheet. If the trip over spring break was canceled by the virus outbreak, for example, talk about starting to save and budget toward next year’s spring trip. A short-term goal might be tickets to a sports event once games resume.

■ Be transparent about your work, especially if you’ve lost your job, even for a limited time. Explain your plan and how and when you will seek a new job, said Golden.

“Kids don’t need a lengthy discussion,” he said. “It might be as brief as saying the process will take a while. Knowing that you have a plan, even if you have no idea what to do, helps kids feel secure.”

Finally, even if you’re nervous — and who isn’t — maintain optimism that everything will turn out for the best, said Golden. Your children will be watching your behavior closely and will follow your attitude.

Next week: Resources abound to teach kids about money while they’re stuck at home.