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How To Tell Your Kids You Are In Debt

Recently, we covered an important question: should you tell your kids you’re in debt? As we discussed, the answer varies, and what is right for your family may differ from others. If you’ve decided that the pros of telling your kids outweigh the cons, your next challenge is figuring out how much to tell them, and how to frame the conversation.

Here are some important strategies to keep in mind—both things to do and things to avoid:

Be explicit that they are not to blame. Kids sometimes adopt their parents’ stresses, so it’s important to emphasize that they haven’t done anything wrong.

Clearly explain any changes that will be made. If you’ve gotten to the point where you need to tell your kids about your debt, it’s probably because you have to adapt your spending and lifestyle. Tell them exactly what will change so there aren’t any surprises, and be sure to keep it as empathetic and positive as possible: “I know it’s not fun to miss out on soccer season this year, but saving that money will help make sure you and your siblings get to play whatever sports you want next year.”

Remind yourself that your kids are not accountable for your debt — so act accordingly. Don’t have them pick up the phone for debt collectors. Telling your kids about your debt is very different from involving them in the process of repaying it (or avoiding it).

Let them help out—if they ask. While you don’t want to overburden your kids with your debt, if they want to help out, treat it like a learning activity and make it a family project. Brainstorm creative ways they can help bring in extra income, like a yard sale or lemonade stand. Color in a chart to keep track of how much those efforts bring in each week, or keep the saved money in envelopes you can take out and count at the end of the month.

Be available to answer any follow-up questions. Make sure the information you share is clear and simple enough for your kids to understand. For example, if your daughter doesn’t yet understand the concept of an interest rate, it would be confusing and possibly overwhelming for her to face complex numbers. Kids may take a while to process the initial conversation, so don’t be surprised if questions come up down the line.

Be on the lookout for signs of stress. Young kids may not be able to identify, let alone articulate, complex emotions, so it’s up to you to be aware of signs of stress. Make sure your kids are doing things to maintain good health like getting enough sleep, getting some exercise, eating well, and maintaining a routine.

Ask them how they feel. You may observe changes in mood or signs of stress, but it’s a good idea to ask her outright how she feels about this news. Don’t wait for them to come to you with worries or stress; ask them outright how they are feeling upon hearing this. Check in regularly, too—this might take a while for them to process.

Make sure all of your child’s caretakers are on the same page. If your child has more than one parent in her life, don’t send her mixed messages about the debt. Avoid confusion, which could lead to more stress.

Give small examples to teach them about debt. If you do opt to tell your child about your debt, treat this as a learning opportunity. For example, if she asks for cash to buy a treat, explain that you’ll give her a few dollars, but she’ll have to pay you back with allowance, extra chores, or money she “earns”—and on a deadline, too. Plus, these kinds of examples may help her understand what you’re dealing with.

Keep in mind that though your debt might be a relatively minor speed bump in the big picture of your life, it’s possible that this news is one of the most difficult struggles in your child’s experience. So, treat it as such: be patient, answer questions, and reassure her. You know your child better than anyone: what she can handle, how she learns best, how best to prevent or alleviate her stress. These strategies can help with the process of explaining debt to your child, but in the end, what and how you choose to tell her is as much about your child as it is about the debt itself.

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