Recession Proof Your Kids: How to Talk to Kids About Job Loss, Tight Budgets, & the Economy

It seems like talk of recession and the impact of inflation is everywhere these days. Whether it’s the price of eggs or possible lay-offs, the economy is affecting us all. If you have kids, it’s likely that you are concerned about how this will affect them and how much to share. 

In situations like this, parents are often walking a tightrope—on one hand wanting to create teachable moments that will teach kids good financial habits, and at the same time wanting to buffer them from potential anxiety about how this will affect your family.

The good news is that the tools we use to help address anxiety in children and youth about topics like school and friends, can be just as effective when dealing with economic concerns. Whether your family is facing a job loss or tightening your budgets, these tools can help. 

Be Honest Kids are excellent at picking up on emotions. They may not know what’s up, but they can sense the stress. Be honest about things in age-appropriate ways. At the same time, reassure them that it’s your job to take care of them and you are big enough to handle that job.

Validate Feelings The first step in handling big emotions is to validate what they’re feeling. Notice when their anxiety seems to be creeping in, then name it and normalize it. For example, “It looks like you’re worried about how this will affect you, lots of kids feel that way.”

Challenge Negative Thoughts As kids process what this means for them, some negative thoughts are likely to creep in. When that happens use thought-challenging tools from CBT to address those thoughts head-on and separate the facts from the fears. 

Explore a New Perspective After challenging negative thoughts, help kids replace them with helpful thoughts. This might sound like “Things are tight now, but it won’t always be like this.” Or “We might not be able to afford everything we want right now, but we have what we need.”

Embrace Teachable Moments Once you have addressed the anxiety, you can begin to explore teachable moments in the midst of financial hard times. Use this opportunity to teach kids about money, budgeting, saving, and spending wisely. These tools are important at every age.

Practice Gratitude In the midst of a job loss, skyrocketing costs of groceries, or the fear of lay-offs, it can be easy to get overwhelmed. So be intentional about practicing gratitude. Be thankful for the things you have, especially the ones that have nothing to do with money. 

Living through a recession can be hard for everyone in the family. But these tools are a great way to support your kids and reduce their anxiety. As a bonus, as you practice them with your kids, you may notice your own anxiety decreasing as well!