How to handle giving up on a financial commitment you made to your teens



Q:




My wife and I feel very bad. We promised our teens a few things this summer, to make up for the time spent with us over the past two COVID summers and to help with the renovations we undertook while stuck at home. But now, with the higher cost of living and ever-increasing interest rates, we don’t think we can afford to continue. How can we make our children understand that our plans must change? ~ Edward




A:


We tend to be hard on ourselves as parents, especially if we feel like we’re hurting our children in some way. When your financial situation changes and your family’s lifestyle choices are affected, it’s important to explain the challenges and changes to your children in an age-appropriate way.


Not only can children tell when something is wrong with their parents, but the uncertainty causes stress and anxiety. Without enough information, kids might imagine the worst, not realizing that you’re taking steps to handle things and keep them safe. But only give them the amount of information that you are comfortable sharing. Stick to what they can relate to and protect them from possible adult consequences. Teens will understand that you don’t have to go out to eat to be able to pay a cell phone bill, but they don’t need to hear you talk about


what to do when your debt consolidation loan is refused


.


Communicating your plan and what you are doing helps children know what to expect. This will make it easier for you when dealing with the choices that impact them the most. Here are three things to keep in mind.



Set new goals instead of breaking promises entirely





If you made a promise with a large price tag that has now become too expensive, rather than breaking your promise entirely, look for other ways to make it happen. Plan it for next summer, ask extended family members to contribute instead of buying other birthday or holiday gifts, or find ways for your kids to contribute as well.


If your promise was a trip, for example, ask yourself if your teenagers can earn some of their own spending money. Traveling next summer might even help you avoid unexpectedly high gas prices, flight delays or cancellations, and lost luggage this summer. The one-year deferral means the family has ready-made gifts if they want to contribute to a meaningful experience rather than buying tangible items you may not need or want .



What to do when your financial goals seem unrealistic



If delaying a year isn’t for you, think about how your plans can accommodate a compromise. Although it depends on your plans, there is almost always a way to get some of what you want, even if everything you want isn’t possible. With a trip, you can choose a different destination or method of travel, shorten the time you spend, travel with points, find cheaper accommodation, or change what you planned to do while you were away. If you were planning on buying something for the family, like new bikes, look for ways to increase your budget. For example, buy good used bikes instead of new ones, negotiate a better price to buy several at once, buy bikes for the kids this year and save to buy yours next year, or make your own with the bikes you have and just buy a few accessories to make the old feel like new.



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Engage your kids in discussions about money





Discussing family finances with your teens can seem like a daunting task that you feel completely unprepared for. However, one of the best ways to manage your children’s expectations and help them understand the unprecedented economic times we face is to share some information with them.


Evaluate what you share based on your own comfort level and what you think your kids are ready to understand. To help your children and teens learn the concepts of money, start by talking about money and related financial topics. And what better topic to pique their interest than a goal that also directly affects them.


Don’t worry if you don’t have all the answers or don’t even know where to start. Keep it simple and answer their questions as best you can. Then, commit to learning or finding out more together. Who knows, they might have some workable suggestions that you hadn’t anticipated.



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Demonstrate money management in action





When household spending on necessities changes so dramatically, as it has for most Canadians in just a few months, use it as a wake-up call to get a better look at your finances. Talk to your kids about how prices have changed and how that affects spending.


Create and live with a family budget


is the easiest way to focus your choices on what you can do, rather than what’s out of reach.


If you already use a budget to guide your spending,


track what you spend


for a few weeks or look at receipts to determine if you need to update your budget based on your current expenses.


When you teach children about money, it can help


set a short-term family goal


which everyone can work towards. Make it visual, like a jar in the kitchen for coins or a bar graph on a poster that kids color to represent the growing balance of a savings account.



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Once you have established a realistic family budget, let it guide you. That way, if you have to tell your kids no or put off buying something they want, you can let the numbers do the talking. Learning that you’re saving for a purpose rather than getting a credit card and going into debt is a money lesson your kids won’t soon forget.



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The Basics of Breaking Financial Promises to Our Children





Your kids don’t want to see you struggle, and they understand a lot more than you think. Talking to them can help you discover that the goal was more important to you than to them, and they would be just as happy with a cheaper alternative. With no end in sight to the rising cost of living, make choices that keep your stress and anxiety at bay. On a day-to-day basis, this will lead to a much more peaceful family life and a stable financial future.



Related reading:




Make small steps add up to big results




The easiest way to track your money




Save money on household bills




Scott Hannah is president of the Credit Counseling Society, a non-profit organization. For more information on managing your money or debt, contact Scott by


E-mail


Check




nomoredebts.org




or call 1-888-527-8999.



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