Children may not understand the stock market or inflation, but they can pick up on their parents’ financial worries. Experts offer advice on dealing with the subject.
Stock market gyrations. Inflation. Layoffs of federal workers. A possible recession.
Children may overhear their parents talking about these things and not fully understand what’s going on or how it may affect their family’s finances. But if the children have questions, parents should be ready to talk, experts say.
“Parents are the biggest influence on kids’ financial learning,” said Ashley LeBaron-Black, an assistant professor of family life at Brigham Young University.
Here are some tips for having conversations about money.
Children don’t pay attention to the national economy, right?
The nation’s economy seemed on solid ground at the beginning of the year, but economists expect that growth slowed in the first quarter amid uncertainty surrounding President Trump’s tariffs. Inflation has steadied, but the threatened tariffs could push prices higher again. At the same time, high borrowing costs are weighing on households, particularly those with lower incomes, and more people are late in paying their credit card bills. The stock market has whipsawed as Mr. Trump has repeatedly revised his tariff plans. And consumer expectations for the economy over the coming months have soured.
Parents shouldn’t assume their children are oblivious to these issues, said Rebecca Maxcy, director and principal investigator at the University of Chicago’s Financial Education Initiative.
Children may not grasp the details, but they’ve overheard adults discussing prices at grocery stores and restaurants. And they’re probably hearing unfamiliar terms, like tariffs, from television or online or from friends at school. This month, for example, news reports discussed the possible impact of the Trump administration’s proposed tariffs on the pricing and availability of the new Nintendo Switch 2 video game console, an item of interest for many children.
“It’s everywhere, it’s so in your face, and kids are hearing it and seeing it,” Ms. Maxcy said.
Children are intuitive, she said, and can pick up on concerns their parents have about the cost of living or the effect of market swings on their retirement savings or college savings.