Don't Let Family Debt Worry your Children

There's an ongoing debate among parents as to whether or not children should be told about household finances. In such a discussion, several questions will invariably arise, such as: At what age should children be informed about the household budget? Should children be included in a family budgeting discussion? Should children be told about serious financial problems facing the family? While many parents have pondered these questions, there is one underlying theme that everyone agrees is valid – don't let your debt worry your child.

With the economic downturn casting a heavy burden on many families, there are obvious concerns about how children will react to overheard conversations between parents who are struggling to pay their debts. While some parents feel it's important to discuss family finances with the entire family (age-appropriate, of course), others as a rule do not include their children in familial budget meetings.

However, one aspect of finance that many parents will not divulge to their children is their take-home pay. Often cited for this were their own circumstances as children. While many said that their parents never discussed finances or debts with them, others felt that perhaps it might have been better to disclose at least some information. They asserted that listening to their parents argue over money made them feel that they were the cause as well as the result of the family debt.

So, how much should you tell children? Certainly, you want to teach your kids the importance of saving and how to spend money wisely. Some parents do not talk to their children about family debt until they're in college. Others talk to their kids when they're ten years of age, explaining that the reason the family is in debt is due to overspending. Still others decide to tell their children by showing them bills and explaining how the cost of simply running a household can cause the debt.

Perhaps this is too much information to give to a child. Back in the day, many of us didn't have any inkling as to the cost of running a household. We had no concept of paying bills or having to pay off debts. All we knew was Dad (and maybe Mom, too) worked and, from time to time, a new washing machine or a new refrigerator would suddenly appear. There was money available for school books, clothes, and whatever we needed – up to a point, of course.

Children today are often more intuitive – or, perhaps nowadays, they're just growing up too darn fast. They can sense when something is wrong in the household, especially when it pertains to finances, since today's pressure seems to be more acute than in times past. They hear the arguing late at night and wonder if it's their fault that Mommy and Daddy are fighting – just like ages ago.

It seems that today, as parents are struggling to make ends meet, some form of discussion should be undertaken so children can understand (1) that they are not to blame for the financial problems that arise; and (2) that even though Mom and Dad owe money, they're working hard to pay those bills. Allow your children to be children, and make sure that they're not saddled with the burden or the worry that somehow the debt is due to their existence.