Kids and teens are far from immune to anxiety and stress, and that includes when it comes to money. While they might not have a complete grasp on how the financial world works, they’ll still be aware of what’s in the news and the concerns your family may have about money, and they’ll inevitably compare themselves to those around them. To help you tackle these sometimes-tricky topics, we’ve joined forces with our expert panel to answer some common concerns your kids may have about money.
Kids have a knack for asking questions that are hard to answer definitively. Ultimately, ‘enough’ money depends on your family’s situation, says bestselling parenting author Matt Farquharson. “I would ask my kids to consider the difference between 'want' and 'need' when they think about what is enough, and then, after we’ve discussed it, my line would be that we have enough not to worry but not enough to waste. I want them to understand that money is not a thing to be frittered away.”
Ask your child to have a think about what that difference is and make a list of the things your family needs to live. Help them differentiate when they include elements that are more likely to sit in the ‘wants’ category, such as holidays, TV subscriptions and take away dinners. “Being clear on the difference between things we need and things we want is key to supporting children’s understanding of how to prioritise spending,” says Laura Scott, our education expert.
Encouraging your child to consider the context of the ‘what is enough’ question can help to ground it in reality and calm their worries.
Just like “do we have enough money?”, the idea of being rich or poor is loaded for adults and children alike. Understanding their position in life can be a complicated idea for kids to get their heads around – and most people will almost certainly know others both better and worse off than themselves. “I would take this as a chance to explain that these ideas are relative,” says Matt. “If you own a mansion, someone renting a flat looks ‘poor’ by comparison. If you’re hungry and homeless, that same person is living like a king.”
This question may be on your child’s radar right now due to recent economic changes, like the rising cost of living and a potential recession. This may have led to a change in your family’s spending habits – going out less, for example – which can confuse children. They may overhear tidbits of adult conversations and draw their own conclusions, which could be significantly worse than the reality. In these cases, it’s good to be upfront with children and emphasise the things that won’t change in their lives – like the fact that you will always be there to look after them, regardless of how much money you have. “I’d also use this as a chance to explain that ‘rich’ or ‘poor’ are not fixed labels that define a whole person, but a situation they might be in at that moment,” says Matt.
Broaching the subject of the unequal distribution of wealth with children, without passing on any personal discomfort or biases that you might have, can feel like a particularly tricky ask. “This can be a really difficult question to grapple with as adults – let alone to explain to children!” says our education expert, Laura. “Being honest with children about inequality is really important, but so is pointing to examples where people who have enough choose to help others.”
You could start by explaining that there are some people who have more than they need, some who have exactly what they need and some people who, unfortunately, don’t have what they need. This can happen for different reasons. It can also shift and change throughout a person’s life.
With younger children, drawing pictures together can help them to visualise the different amounts families have. Ask them what having more or less money might mean for each family – how it might affect things like where they live and what they can do and buy, and how they feel. Helping older children and young people to understand the differences between relative and absolute poverty can also help them to understand the complexities of this issue. “Many schools cover issues around wealth and poverty in Religious Education, Citizenship or PSHE, so this can be a good opportunity to discuss the topic at home,” says Laura.
As a parent, being told “it’s not fair” by your kids is probably nothing new. But in the context of money and comparison with friends, it can feel like a difficult one to navigate. The temptation to respond with what you might well have heard as a child – “life isn’t fair!” – may be real, but it’s probably not the most helpful answer you could give them. It essentially tells kids to “grow up” without offering them the tools or support to do so and dismisses how they feel. Instead, focus on talking together about the value of money. “I came from a thrifty family that saw spending on anything beyond your needs as frippery, so my heart sinks a little when I see kids lavished with wildly expensive gifts,” says Matt. “With my children, I try to explain that everyone gets to choose what they spend their money on, and that for us, other things – like spending time together – are more important than having lots of expensive toys or presents”.
You could also draw on the advice in our ‘Teaching your children the difference between wants and needs’ article to help you answer this question.
A 2022 study by Action for Children found that 30% of children worry about their family having enough money to live comfortably – a figure that rises to 47% of those from low-income backgrounds. And with so much discussion in the media about homeownership and rocketing rental markets, older children in particular may be wondering where this leaves them.
“If your child is feeling anxious about this topic, it’s worth having a conversation about the different ways people can live,” says Caroline Edwards, our bank expert. “‘Home’ can mean lots of different things – some people might rent a house while others might own a flat or share a space with their wider family. The important thing is that your child feels secure and confident in that location. For instance, if you have a mortgage, it’s worth explaining to them that it is an example of ‘good’ debt, which is manageable and foreseeable.”
While it’s generally good to be open and honest about money with kids, children look to trusted adults for comfort when they’re worried. It’s ok to show them that it’s a very normal thing to sometimes feel worried or sad, but it’s also important to be a reassuring presence. Rather than answering with a point-blank yes or no to this one, try to show your child that, if money is a concern, you can look for solutions and make changes to reduce some of the anxiety weighing on them. Saying something along the lines of, “money is going to be a bit tight for a while, but we’ll be ok” strikes a balance between honesty and reassurance so that they don’t feel you’re sugar-coating the truth, particularly when talking to older children. If they’re keen to help, you could talk about taking small steps as a family such as:
It’s also worth checking in with yourself about your own feelings and understanding around money topics. “The more confident you are with talking about money and overcoming the taboo of discussing your finances, the easier it will be to clearly explain things to your children,” says Laura. “Taking time to make sure you know what you’re talking about can make you feel more confident, but also know that it’s ok to admit that you don’t know the answer to a question, and you can try to find out if it’s important to them.”
A part-time job gives young people valuable experience, from developing their confidence to earning and managing their own money. However, this new addition to their routine could leave them feeling worried about having enough time left to relax and keep up with their schoolwork. Finding something that they can do at the weekends or in the evenings should allow space to study. Encourage them to make sure their employer knows they are still at school and can only manage a set number of hours each week, too.
They’ll also need to up their organisation skills when it comes to time management, so helping them to identify systems that work for them can take away some of the anxiety around this for teens and make them feel more supported.
“Ahead of key times like mocks, coursework deadlines and formal exams young people should speak to their employer about reducing their hours or taking leave over these periods,” says education expert Laura. “This can be nerve-wracking for them, so as a parent you might want to help them write an email or rehearse what they will say in a meeting with their manager to empower them – try to avoid taking over and just giving the manager a call yourself though!”
If your child is planning to go to university in the near future, chances are you’ve both got money on your mind. “Getting a degree can be a key step towards getting onto the career ladder, but with tuition fees often costing more than £9,000 a year, it can feel like a daunting one too,” says bank expert Caroline. “There are plenty of ways to make it work, though. Sit down together with your child, get out your calculator, and break the costs down – knowing exactly what’s what when it comes to paying for university is an essential first step and removes some of the dauting unknowns.”
Our articles for young adults on ‘Dealing with debt at university’ and ‘How to be kind to the environment and your wallet’ could also help your teen when weighing up the affordability of going to university.
Hopefully we’ve covered some of your kids’ most burning questions – but if they keep coming, try responding with a simple, “why do you ask?”. It’ll buy you a minute to collect your thoughts instead of blurting out a reflexive "yes," "no," or "none of your business," and it’ll help get to the root of why your child is asking in the first place. You can also find more support and expert advice on managing money matters when it comes to you and your kids on our parents’ hub.
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