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How to talk to your children about the rising cost of living

Kara Gammell
Written by  Kara Gammell
Updated: 07 Mar 2024

If you're worried about your kids being anxious about the cost-of-living crisis, you're not alone. Here's how parents can help.

No matter how hard we try as parents, our children can pick up on our anxieties - and when it comes to worries the cost-of-living crisis isn't any different.

The cruel combination of rising prices and stagnant wage inflation has been stressful for most of us and meant that we've had to make harsh cutbacks on our spending.

Unsurprisingly, this may lead to our kids being anxious as they watch us struggle to balance our budgets.

According to research from Yorkshire Building Society, two thirds of 11-18 year olds worry about their parents or guardians not having enough money to do the things they want or buy the things they need.

However, although the cost of living continues to soar, there are many ways that parents can help their kids keep their financial anxiety lower.

Here’s how to get started.

1. Get talking - money isn't a taboo subject

The good news is, according to the government's Money Helper site, children whose parents talk to them about money and give them responsibility for spending and saving are better at dealing with financial uncertainty – both now and as adults.

This means that parents shouldn't skirt around the topic of cash and be open to answering any questions their children might have.

Once you've begun to face your own financial fears, it becomes a lot easier to help your kids understand the situation.

Being open and honest will not only reassure your kids that you have things under control but also let them know that money fears and challenges can be discussed with you.

“While it can be a daunting subject to approach with kids, the current crisis provides a good opportunity to start conversations around money at home,” says Louise Hill, co-founder of GoHenry, pocket money app.

“Rather than shielding kids from financial issues, teach your kids about money, and help them to understand the wider cost of living situation which means they’ll not only be less worried, but they’ll also be better equipped for the realities of adult life.”

Try to explain the cost-of-living crisis in terms your child can understand.

If you have teenagers, for instance, try to use price of something they value, like a phone contract as a starting point.

While if your kids are younger, they may find it easier to understand that they can buy less with their pocket money.

Family playing football

2. Reduce their overwhelm

Overhearing adults discussing the cost-of-living crisis may make your children worry that you don't have enough money for food or bills, and this can cause their anxiety to spiral. It can be even more traumatic to hear adults fighting about money.

So, while it’s important to acknowledge their concerns, you also need to confirm that the adults have everything is under control.

Experts warn against saying you can’t afford it.

It’s easy to use this default response when your child begs you for the latest toy, but doing so sends the message that you’re not in control of your money, which can be scary – and create future anxieties.

A good alternative is to say: “We choose not to spend our money like that.”

If you are struggling to talk about money with your partner without arguing, our guide to stop fighting about money may have some useful advice.

3. Offer reassurance

Reassure – but don’t promise – them this should only be temporary.

Children look to trusted adults for comfort when distressed.

So, while it’s good to be honest about what’s happening, and for them to see that it’s normal to sometimes feel worried or sad, it’s also important to show your child that you are looking for solutions and can make some changes may reduce anxiety for them.

4. Get to the source

Kids will consume a lot of information from their friends and social media, but will not have the skills to fact check their sources.

Both of these are notorious for exaggerating or expanding on the facts of a story or subject, and should not be the how a child is gaining knowledge of the current crisis.

Ask your child what they have heard is happening - and take the time to correct their interpretation if you feel it's not accurate.

There are lots of handy free online resources that are aimed specifically at young children, such as BBC Newsround, the Week Junior or the Beano workbooks on financial literacy, created with the Bank of England.

If your child is older, you could watch or read the news together and talk about what you’ve learned.

If you have younger children that are starting to explore the world online, our guide to protecting your kids online may offer some useful advice.

5. Get them involved

Much like adults, when it comes to anxiety, children can benefit from talking and problem solving rather than worrying and staying silent.

Empower them further by showing them how they can be part of the money-saving process. With young kids, turn household cost-cutting into a game.

Ask them to remember to switch off lights (lighting makes up 11% of the average UK household electricity consumption), waste less food and turn off taps when brushing their teeth.

An easy way to do this is during the weekly food shop.

Use this as an opportunity to talk about planning, saving and finding the best value. Let your children hold the list and tick off each item or if they’re older, give them a few items from the list to find on their own at the best price.

6. Talk to them about wants and needs

It is only natural that kids want the latest toys and gadgets, but making them understand the difference between needs, wants and wishes will help them make sensible spending decisions - and help them understand if you have to make cutbacks.

One way to do this is to put it into a context that your child can understand – for instance, explain how many weeks of their pocket money it would cost to pay for the item.

Talking about our fears around money and sharing the burden is just as important for adults' mental health as it is for kids. In partnership with CALM, we're getting the conversation started with Money Talks. Explore our campaign hub to learn more and access helpful tips and resources.