The impact of financial stress

Even the youngest children can pick up on the stress that parents or caregivers feel as a result of the economy and personal financial anxiety. Southwest Human Development early childhood professionals recommend using simple, clear terms to explain financial situations in a sensitive manner when necessary.

Talking to Children about Financial Stress

Many scenarios may affect a family’s financial situation, including relocation, sale of items, increased work hours and more. Young children do not understand financial issues, and they generally don’t have concerns about finances as long as they are fed, have adequate food, shelter and clothing and have access to a sensitive, responsive and emotionally available caregiver.

Frequently, financial stress on a family can impact the availability of one or more of these needs. Parents can help young children by becoming increasingly aware of their own experience of stress in order to find healthy ways of managing that stress so that it does not adversely impact their ability to provide sensitive, responsive care to their children. While parents should generally avoid speaking about financial stress around their children, there are certainly situations in which some discussion is needed.

Younger children may benefit from simple, clear words to explain what already is or is reasonably sure to occur. They are often reassured by descriptions of the concrete details of what will happen to their belongings and with their routines. Keep your children verbally updated new concepts including where their bed will be, who will make their dinner, etc. Young children look to trusted adults in order to draw conclusions about whether they are safe or need to be worried or fearful. Children typically operate according to the principle, “I’m okay if you’re okay.”

Children at about six years of age and up can be increasingly engaged in discussions that anticipate adversity. Parents must clearly convey that they as caregivers are ultimately responsible for managing the situation, and that children are not responsible for the family’s finances.

Research shows that steady, responsive, sensitive parent-child relationships can buffer children from the effects of excessive stress and can promote children’s own sense of competence and effectiveness. All children benefit from opportunities to express their feelings through words and/or play, from patience in the face of their negative emotions, and from the feeling that they are understood. One useful lesson that children can learn from difficult circumstances is that families pull together despite difficult times.

Decreasing Household Stress

Using words to label children’s feelings can help them feel more organized, and parents’ empathy can help them settle. Phrases such as “I know you are disappointed,” or “I can see that you are really mad right now!” can help children feel better understood. Parents should also maintain everyday routines as much as possible. A sense of predictability, even in the midst of great change, has a positive impact on retaining a feeling of security in life.

Be sure to include other individuals who spend time with your child in your circle of support, including child care providers and teachers. Collaborate with them on how they can support your child during this period when your family is facing challenges. Discuss the possibility of regression or challenging of your child’s behavior. Share with them what you know and have noticed about your child’s behavior and needs, and how what they may see that indicates that your child needs some extra support outside of home.

Signs that Children are Struggling with Excessive Stress

Parents and caregivers should be alert to warning signs that children are struggling with the stress of the family financial situation. Some behavior changes may include changes in eating patterns, changes in sleeping patterns, increased attachment or whining, regression, increased fear of separation from parent, appearance of new fears, increased aggression, decreased cooperativeness, increased irritability, fussiness, decreased frustration tolerance, withdrawal/subdued or sober mood, and increased behaviors parents or caregivers view as “attention-seeking”.

Taking Care of Yourself

It is important that parents do what they can to take care of themselves when they are under stress, so that they are in a better position to recognize and meet the needs of their children.

Some suggestions for taking care of yourself are:

  • Reach out to family and friends for support
  • Eat well
  • Exercise
  • Get sufficient sleep
  • Practice relaxation techniques (yoga, walking, relaxation breathing, etc.)
  • Keep a journal
  • Keep your sense of humor
  • Keep your perspective: there are no perfect parents, and fortunately children do not require perfect parents


All content in this article, including any advice or commentary from Southwest Human Development staff and/or others, should be considered an opinion and is provided for informational purposes only. The content is not intended to be a substitute for medical or other professional advice, diagnosis or treatment. Always seek the direct advice of your own trusted professional with any questions or concerns you may have regarding the child/ren in your care. Southwest Human Development does not recommend or endorse any specific tests, products, procedures or other information that may be mentioned in this article. You may contact Southwest Human Development’s Birth to Five Helpline at 1-877-705-KIDS (5437) to speak with one of our early childhood professionals for personalized assistance. Birth to Five Helpline specialists are available Monday through Friday from 8 a.m. to 8 p.m.