How I talk to my kids about the cost of living crisis, tips from a mum and finance expert

Talking to my kids about the cost of living crisis feels hard because it is hard - here’s how I’m trying to explain it to them…

Talk to my kids about the cost of living crisis illustrated by kids and money
(Image credit: Getty Images)

I get it - when it came to talking to my kids about the cost of living crisis, I found it overwhelming. I mean, where do you even start? With age-appropriate honesty and transparency - and it's a fine line to tread.

Many families across the UK are struggling in some capacity at the moment, with many wondering how much their energy bill costs, why food prices are going up, and how to save on their monthly food bill and that's even before we factor in birthdays, new school shoes, and the exorbitant cost of child care.

A whopping 67% of parents are worried about paying for food according to a survey by Nesta. And with this seemingly ever-rising cost of living crisis, that 67% aren't alone; one worry for parents and carers is how to manage our kids’ expectations when we need to tighten our belts, and how to reassure them even when we’re feeling worried about money ourselves. Family Editor, Stephanie Lowe agrees; "The term 'pester power' is a term for a reason, children don't get to decide much in life, so when they do decide they want something they focus all their energy - and noise levels - on getting it. Setting boundaries helps, but it's seeing that through and having a reason that will keep the boundary in place 'because I said so' doesn't cut it."

Families across the country are feeling the pinch - to say the least - and it’s affecting our kids. A recent survey by Beano Brain and YoungMinds revealed the cost of living is the leading cause of anxiety in children and young people. Just over half (51 per cent) of 11- to 25-year-olds said they had felt angry, unhappy, stressed, or anxious over money in the last three months.

How I talk to my kids about the cost of living crisis

Knowing how to talk to my kids about the cost of living crisis was a topic I, along with many parents, considered shying away from, with good intentions obviously... to 'protect the kids'. But as a mum-of-two, with one on the way and a finance expert I also understand that hiding facts when kids hear and see a lot, isn't protecting them it's keeping them in the dark. And, I get that it can seem impossible to strike the right balance between keeping your children in the loop and overwhelming them - but as studies show, kids are perceptive creatures, and they’ll notice something’s up even if you don’t mention it, your silence could be deafening and not talking about it leaves their little imaginations to fill in the gaps - so finding the right way to communicate is key.

How to talk to kids about cost of living crisis illustrated by kids and money

(Image credit: Getty Images)

Should my kids know if I’m struggling financially?

You know your family better than anyone but the simple answer to this is that, regardless of whether they should or not, your kids probably will pick up on the fact that you’re stressed about money in one way or another. Though it’s never a good idea to offload to your kids about your money worries, or to make them feel responsible in any way, keeping things bottled up or avoiding the topic of money could end up worrying your children even more. Research from GoHenry suggests that an astonishing 71% of children and teenagers are worried about the cost of living crisis, having heard about it at home, with more than half of kids aged 6-18 noticing that their parents or carers are more concerned about money than usual. Then, there’s the fact that children and teens will inevitably pick up bits and pieces about the cost of living crisis from the news and social media which, if not carefully managed, could lead to further worry. 

When I talk to my kids about the cost of living crisis, I focus on my tone and  vocabulary and that anything I do share is wholly age-appropriate. For my youngest, I find visual explanations such as drawing and using play money to be helpful in garnering a well-rounded understanding. While I don't have a teenager yet, they may be ready for something a bit more complex and transparent. 

It’s important that all of your conversations make it clear to your child - at any age - that you, the adult, are responsible for making sure that there’s enough money for the essentials - not them. Start with a simple explanation of inflation - Rooster Money share a great toolkit on their site - but essentially the party line is that 'things that we need to buy are getting more expensive, which means that there might be less spare money for treats for a little while', and go from there, invite your child to come up with plans for 'free treats' for the family.

What can I say to my kids when I can’t afford something?

As a mum-of-two I completely understand this, though I don't always get it right, but in order to try and side-step pestering when your child wants something that you can’t afford, it’s important to share clear and firm expectations before you even leave the house. Avoid leaving any loopholes. This might sound like; 'we will be in the shops today and you might see things you like. I look forward to you showing me, and we do not have pennies to spend on those today.' Don't be afraid to remind them again before you step inside the shop. And then be true to your word, stop and allow them time and space to feel the 'want', offer to take a photo so you can both remember what they like. 

When I talk to my kids about the cost of living crisis I try not to open up any behaviour-based negotiations when discussing affordability, as telling them that you might be able to afford something ‘if they’re good’ will only confuse them. To avoid too much disappointment, I try to work with my children to make a plan to save for the item in question. I invite them get involved with the calculations and help them to follow through with their mission. Another idea I want to try is to challenge my child to do some research and come up with a cheaper or free alternative to the item or experience that they asked for in the first place - you could even give them an affordable budget to work to, and see how they do. Kind of like a mini Apprentice.

While it’s not the best precedent to set - to give in to pestering - it's more important to avoid weaponizing the cost of living crisis when your kids are nagging you for some expensive buys. It can be really difficult to deal with pestering when you’re worried about paying the bills, but angry outbursts will only worry your children, and perhaps make them feel more responsible for the family finances than they ought to. Try to keep any conversations about money calm, informative and age-appropriate. I know this can be hard, we're all human and we're all trying. The best way to keep calm is to have the conversations before they become emotionally fuelled. i.e. over dinner when everyone is in neutral spirits and no one is refusing to move until their demands to buy the latest Paw Patrol characters are met, in the middle of the monthly shop. 

Ideas to do today that will help your kids cope with the cost of living crisis

It can be tempting to put off having conversations with your children about any financial changes in your household until they ask, but catching the topic early could help to set the tone for your kids’ future relationship with money. If you can afford it, now is a really good time to introduce pocket money, either with cash or, if they’re over 6 and you’re hoping to teach them how to navigate the reality of money in 2023, with a bank account and card. Allowing them to spend, save and look after their own money will help them to be more aware of how things cost, arm yourself with some great ideas on how to teach your kids and put some of the agency and responsibility for affording the things that they want into their own hands.

When I talk to my kids about the cost of living crisis I explain any changes, such as postponing family holidays, cancelling streaming services or any other belt-tightening exercises, in advance. This gives my child time to get used to the idea. I let them know their disappointment is to be expected, that I feel the same way. I then encourage them to ask any questions that they might have and, if your child seems worried after the conversation, empower them to share what’s bothering them so that you can reassure them. 

As a society, we don’t find it easy to discuss money even with other adults, so conversations with our kids about family finances can feel a bit daunting - but they don’t have to be. You never know, talking realistically, positively and creatively about the cost of living with your child might help you to feel a bit better about things, too. 

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Clare Seal
Financial Coach, author and writer

Clare Seal is the creator of the @myfrugalyear Instagram account, and author of Real Life Money, The Real Life Money Journal and Five Steps to Financial Wellbeing. She is also a mum of two, with one on the way and is passionate about finance transparency and helping people to understand more about APR, credit and debit, ISAs and everything else that can bamboozle us when it comes to real life debt.