‘Sweetheart, we can’t afford it’. Talking to children about money
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Money is a difficult subject to talk about. If you’re anything like me, it can feel uncomfortable to discuss anything money-related - from simple things like asking a friend to pay you back, to sharing how much you earn or spend.
While these conversations may be easier within families, things can get tricky when it comes to children. Let’s face it: telling your child “we can’t afford it” is tough and, at times, heartbreaking. The truth is, when it comes to kids, the expenses can feel never-ending.
There are the essentials like schooling, clothes, and medicine. Then there are the “semi-needs” - extracurricular activities that enrich their lives and keep them off screens. And finally, there’s the endless stream of “I wants”: “Mummy, I want a Stanley cup. Mummy, I want a Labubu. Mummy, I want to go to the cinema. Mummy, I want to go to Disney World.”
As parents, it’s our duty to say “no” and to teach children that things are earned. But even if our “no” comes from a place of wisdom, there are times we wish we could say “yes.”
So what’s the best way to handle it when you want to give your child something but can’t due to financial reasons?
How honest should a parent be when it comes to money?
Counselling psychologist Dr Stephanie Borg Bartolo, a senior visiting lecturer at the University of Malta’s Department of Psychiatry, says honesty is important - but should be tailored to the child’s age and emotional maturity.
“We don't need to place unnecessary stress on children,” she explains. “As parents, we first need to come to terms with the situation ourselves so that, if we do decide to talk about it, the conversation doesn’t come from a highly emotional place.”
Often, money-related conversations happen at the wrong time and in the heat of frustration. Many of us have been there: “You broke the Stanley mug I just bought! Don’t you know how expensive it is?” The anger may not be about the mug but about deeper financial stress bubbling beneath the surface.
“As parents, we first need to come to terms with the situation ourselves so that, if we do decide to talk about it, the conversation doesn’t come from a highly emotional place.”
- Stephanie Borg Bartolo
Stephanie stresses that if parents deal with their own emotional response first, they’ll have the time and clarity to process what’s happening, make a plan, and then choose if and when to share it with the child.
“The amount of information depends on the child’s developmental stage and personality. If I have a son who’s highly sensitive or tends to worry, I’d be more cautious about how much I share.”
Teaching the value of money
While money itself isn’t something children should be worrying about, parents can still teach its value - where it comes from and the fact that it isn’t limitless.
“The idea is not to create anxiety,” says Stephanie. Having open conversations when the topic naturally comes up is better than bringing it up only during moments of stress. These discussions build on what they’re already learning at school.
She advises against sharing actual bank balances or financial worries unless absolutely necessary. Instead, parents can guide children toward a non-wasteful mindset. For instance, talk about not wasting food or choosing not to buy a toy - not because you can’t afford it, but because it’s unnecessary.
What about holidays or big purchases?
How do you tell your child you can’t take them on holiday or buy a big item? Stephanie suggests explaining that different jobs pay different salaries. Some pay X, others pay Y - and your job currently pays X. One day, it might pay Y. In the meantime, you make the most of what you have.
You can explain that while you could use the money for a holiday, it might be wiser to spend it on redecorating their room or going on a few smaller trips. If even small holidays aren’t possible, be honest about it. Acknowledge that it feels unfair - and that you wish things were different too, Stephanie says.
“Emphasise that many things in life are free: love, connection, picnics, walks, swimming at the beach, games. Everything else is extra.”
Then try to shift the focus: maybe next year things will change, maybe there are other fun things you can do together in the meantime, she says.
“Sometimes we can be afraid to disappoint our children as we want the best for them, but this is also a life lesson. If they are sad or disappointed, try empathising with them and tell them if you feel the same. But that you also feel so grateful that you can afford the important things like food, shelter, school, treats etc. Also emphasise that many things in life are free: love, connection, picnics, walks, swimming at the beach, games. Everything else is extra.”
What if a parent loses their job?
When it comes to more serious issues, like a parent losing their job, does a child need to know? Stephanie says it depends on the impact. If a parent loses a job but has savings and a solid backup plan, there may be no need to mention it - especially if it doesn’t directly affect the child’s daily life.
But if the family needs to cut back significantly due to financial problems - and for example, move in with relatives or stop certain activities - then it’s important to explain the situation.
“Process it yourself first. When you tell your child, they’ll be looking at you to assess whether they’re safe. If you’re calm and composed, it reassures them,” she says. “With older children, you can explain more, such as: ‘We need to pause extracurriculars for a term while we prioritise essentials. Once mum or dad finds a job again, we can reassess.’”
She emphasises the importance of checking in with your child about how they feel. “They might have many questions - and that’s okay. That’s why it’s essential to process and plan before the conversation. Leaving them in uncertainty can create anxiety. What they need is a sense of safety, even in change,” she says.
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