Most financial planners say it's a good idea to talk to your kids regularly about money. But you can go too far. If you're sharing too much information, or if you're getting your kids directly involved your financial problems, you're probably causing more harm than good.
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"When children are inappropriately exposed to adult financial problems and conflicts, they are left feeling anxious and insecure," says financial psychologist Brad Klontz,who wrote "Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health." "It can be very damaging."
Klontz says parents who regularly cross financial boundaries with their children have a money disorder that he calls "financial incest."Here are some signs you may have a problem:
*You share all your financial worries with your child, sparing no details. Afterward, you feel a sense of relief.
*You use money to control your children.
*You use your child as a go-between when you're arguing with your spouse or ex-spouse about money issues.
*You ask your child to answer the phone when creditors call, or to lie about the family's financial situation.
*You ask your teenager to help make important financial decisions, expect him or her to balance the checkbook or to contribute to household bills.
Some therapists disagree with the "financial incest" label, noting that it seems to be deliberately shocking and isn't universally recognized in the field. "We psychologists use a set manual with designated nomenclature so we can all be on the same page, and 'financial incest' isn't in it," says Kathleen Gurney, a psychologist who specializes in money-related issues in Sarasota, Fla.
Klontz responds that the term was not meant to be shocking: "Rather, like sexual incest or emotional incest, it describes the dynamic of sacrificing the psychological well-being of a child to meet adult needs, in this case, around money."
Although the label concerns her, Gurney says she has certainly treated adults who have inappropriately involved their children in financial issues, and children who experience anxiety as a result. It's especially common in divorce, she says. One parent might say, "Sorry, honey, but we can't get you braces because your dad is not paying enough child support." The other might say, "Why don't you ask mom for that? I certainly give her enough money every month."
"Parents use their children to workout their emotional upsets," Gurney says."It's a mechanism for relieving their stress and pain, at least in the short-term. But it can hurt the parent-child relationship for life and certainly a child's chance of having a healthy relationship with money."
The victims of financial incest can be adult children or younger kids, Klontz says. When parents share too much information, at first the children may feel honored or important because their parent is confiding in them.But they usually end up anxious and confused because the problems are out of their control. Often, Klontz says, they develop money disorders of their own asa result.
Parents who use money as a tool to control their children can cause even more psychological damage, therapists say. Gary Buffone, a Jacksonville, Fla., psychologist who wrote "Choking on the Silver Spoon: Keeping Your Kids Healthy, Wealthy and Wise in a Land of Plenty," says he has counseled couples who tried to use money to force their grown children to attend a certain college or keep grandchildren living nearby.
"I had one wealthy client who gave all three of his children high-paying positions at his company," Buffone says. "To get their paychecks,every Friday they had to show up at dinner. Otherwise, they didn't get paid. As you can imagine, there was a lot of resentment and anger toward the father, and the kids had a very twisted view of money."
Rand Conger, a psychology professor at the University of California-Davis, said his research into the psychological impact of financial stress on children shows that most cope very well with not having a lot of money or material things. But they become very distressed "if their parents fight with each other or with them about money issues," he says. "The most important thing parents can do is keep calm and try to help children understand what is happening."
In addition to keeping calm in times of financial crisis, Conger and other therapists recommend the following steps:
*If you find yourself tempted to share the details of your financial problems with your kids, make a concerted effort to find another outlet, whether it's a friend, a therapist or a nonprofit credit counseling agency.
*Never give your kids money and ask them not to tell others about it. Even comments like, "Here's $10, but don't tell your dad," can cause confusion and anxiety.
*Don't keep kids in the dark, but don't give them too much information either. Try to use conversations about family financial issues to educate your child in age-appropriate ways about how money works and the importance of living within your means.
*In a crisis, give kids a way to help. It can be as simple as telling a younger child to give Dad a big hug when he gets home, or sitting down with older children and discussing ways you can all cut back your spending. "Older children and adolescents will feel more empowered if they feel they are helping," Conger says. "They can contribute by working outside the home or providing more support at home so that parents can work more." That kind of cooperation in a crisis, Conger says, will strengthen family ties and give your children a strong financial foundation for the future.
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