Thousands of parents are reconfiguring their budgets after major organizations like Amazon, Target, and Nestlé announced mass layoffs in the US. While Amazon plans to cut 30,000 corporate jobs, Nestlé decided to lay off 16,000 employees, according to Reuters. On the other hand, Target is letting go of 1,800 roles, CEO Michael Fiddelke announced, per the outlet. Amid mass layoffs across the US, as parents struggle to make ends meet, here is how to introduce financial hardship to children, as per a CNBC article that quotes Wendell Clarke, an Atlanta-based behavioral wealth specialist.
Be honest about your layoff
Children can notice changes in expenditure. According to Clarke, “Children are exceptionally perceptive”. Therefore, if you have tightened your budget following an unprecedented layoff at work, your kids will definitely read the room.
On this, Clarke advises parents to be honest with their kids and not “make it long and complex”. “I would create space for them to understand and not understand and to ask questions.”
Support them emotionally
After a layoff, it might be unreasonable for many parents to buy certain things that their kids demand. This may leave emotional stress on them. In a situation like this, Wendell Clarke says parents must carefully support their kids’ emotional response.
“Remember, they are kids. They should be allowed to feel and to be reassured,” Clarke says. He further advises parents to be gentle with their kids, especially if they are angry or sad. And since kids “don’t necessarily do well with the indefinite,” Clarke advises parents to reassure them that the financial crisis is only temporary.
Teach them financial strategies
During a period of financial hardship, parents should consider teaching financial strategies to their kids, advises Clarke. In his opinion, it is the perfect time to instruct them on how to be responsible with money.
“Use experiences to share financial strategies with children so they can learn your money messages and financial values,” says Clarke.
You will be encouraging children to be irresponsible with money if you spend a lot on groceries, clothes, and travel, both during difficult times and when money is not tight. Therefore, Clarke says one must communicate the responsible use of money to their kids through “ verbal and non-verbal” means.