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Financial Anxiety vs. Calm: Your Kids are Watching. Which Will You Choose?

Financial Anxiety vs. Calm: Your Kids are Watching. Which Will You Choose?

April 09, 2020

For this month’s blog, I asked Certified Financial Therapist Maureen Kelley to give us her thoughts about how the current financial crises can affect young children. Maureen Kelley has had a career in financial services for over 25 years as a private banker and wealth manager.  Maureen is equipped to help people reach their financial goals by thoughtfully addressing the emotional, psychological, behavioral, and relational hurdles that are intertwined.  Thank you, Maureen!

It is hard to envision what our lives looked like just a few short weeks ago: Our economy was strong, markets at all-time highs and consumers were spending.  But even before COVID-19 shook our world, money was still a major source of stress for many Americans. In the best of times people have difficulty talking about money. And if our health was our only concern, that would be a big enough burden. With added job loss, hours cut, portfolios down—it is normal to feel anxiety, stress, and just plain rattled.


While it is critically important for the adults in the home to be able to talk about their concerns and their fears, there is one caveat: be mindful of little ears. As families are spending more time together in their homes, no matter what you do in any situation with your child, ask yourself, “What beliefs is my child going to take away from this interaction?”


How Financial Anxiety Can Affect Your Kids


Your financial anxiety has the potential to leave a powerful impact on your children long after this crisis has passed.  Children have young developing minds and coping skills, limited perspective and the ability to know the difference between actual threats and imagined ones. A young child can experience anything as traumatic; if the emotion is strong enough, if the message is powerful enough, a child will carry it forward into adulthood.


Here’s an example


Kara, whose parents lost their jobs and then divorced during the credit crisis of 2008, is struggling with financial fear and avoidance of all money issues now as a college student. Only 12-years-old at the time of the Great Recession, she endured endless parental fighting and watched her mother shut down completely.  Her mother continued to spend as though nothing had changed and her father resorted to name calling and shaming—until they chose to end the marriage. Those moments in her childhood have affected how Kara deals with and feels about money; today, Kara is in denial about the thousands of dollars she has created in credit card debt, carries guilt, shame and is not sure how to dig herself out. 


Children form their view of the world from watching their parents. They learn what they are supposed to fear and avoid. These messages form our money mindsets (also known as money scripts) and our limiting beliefs carried well into adulthood.


While we all need support, coping skills and caring, we need to remember that anxiety is contagious - but so is calm.  We are all experiencing great uncertainty and want to protect our children from the devastation. However, silence about economic realities may not be the best approach.


Consider thoughtful and careful conversations about money. There is no greater time to model healthy money conversations than during a social crisis that will be a defining time in all our lives.  Choose how to explain your situation to your children. This is an opportunity to teach financial lessons and talk with them in ways that will shape their money mindsets for a lifetime.  Here are some examples:


  • Depending on their ages, describe some of the things that we do with our money—spend, save, give and invest.
  • Take time to explore your own financial values. What is important to your family, and how can you best explain it to your children?
  • There are teaching moments in how we choose to buy different items in a grocery store. Planning meals and involving little ones—homemade oatmeal and toast instead of Pop-Tarts.
  • Teach healthier choices that may cost the same but offer more than one meal.
  • This is a great time to start a piggy bank. It introduces the concept of saving for something in the future—delaying instant gratification.
  • Talk about the value of having an emergency fund—just like having a shovel for the snowstorm—money is there when you need it.
  • Budgeting is a life skill that can be taught at very young ages. With the math at their level, talk about deciding in advance how much to spend so they don’t run out of money.
  • Giving is a very personal choice but children will never forget watching how their parents chose to use what they have. By teaching your kids about philanthropy, you are giving them tools for achieving connectedness with their community—locally and global.
  • Investing can be a challenging topic for anyone, but for older children, the sooner they can understand the concept, the better.


Good financial habits are not going to happen on their own. It takes guidance, practice and intention.  If you teach your children financial literacy and how to have healthy conversations about money at a young age, they will be better prepared to navigate their increasingly complex world.  


And a final thought: If we can use this time to teach our children to be more financially thoughtful, we will experience a silver lining.  What is your family thankful for? Gratitude reduces distressed emotions and increases those of happiness and wellbeing.


This will pass, we are resilient. Be well.


The views and opinions expressed in this material are solely those of the author and do not necessarily reflect the views and opinions of any of the companies of OneAmerica. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.  The names and when necessary specific information used in this example have been changed to protect privacy. This example is not necessarily indicative of future results and may not reflect the experience of all clients.