How to ask the kids to help out in a financial crisis
When finances are suddenly stretched, is it wrong to solicit help from your children?
Financial stability is a cornerstone of a healthy household, so when a money crisis hits, it can rock a family’s foundation.
To help ease the debt burden, some parents ask their kids to contribute to the family coffers by taking side jobs or helping out with the family business.
Putting minors to work is not as unscrupulous as it sounds. Experts and others who've done it say a positive work ethic, deep understanding of the value of money and an appreciative attitude often result.
“Having kids contribute to the household, particularly when the parents are going through something tough, instills a sense of responsibility,” says Kimberly Palmer, author of “Smart Mom, Rich Mom: How to Build Wealth While Raising a Family.” And asking teens close to adulthood to help out, “is the time for them to learn that they cannot just take, but give,” says Palmer.
How helping out can help kids, too
How would you react if your parent said it was time to contribute financially to the family, but you were a mere middle-schooler? Hue Nguyen, who is now a computer programmer living in San Jose, California, just did it. No questions asked.
Having kids contribute to the household, particularly when the parents are going through something tough, instills a sense of responsibility.
|— Kimberly Palmer
Author of "Smart Mom, Rich Mom"
Nguyen was just 12 when her mother told her she had to work on the weekends. Unbeknownst to her at the time, her mother was deep in debt, owing $15,000 to relatives who helped finance the family's emigration to the United States from Vietnam.
“I knew she needed money for things like rent and food, but it also had to go for what she borrowed,” says Nguyen, whose mom eventually told her about the loan when Nguyen was in college. “She was under a lot of pressure to pay.”
So, the young Nguyen began cleaning and running errands at her uncle’s auto mechanic shop. “He paid me $10 an hour, but half of it I had to give my mom,” she says. “I have seven brothers and sisters and they all did this. She had a coffee can by her bed where she put the money.”
Pitching in made sense, and was not up for debate. “I didn’t question it too much, or maybe at all,” says Nguyen. “My mom worked very hard, she recycled bottles and boxes, and I think it taught us to be very responsible, hard-working people. We didn’t take anything for granted.”
While a strong sense of obligation to work together, however young, toward a common goal is seen more frequently among immigrant families, kids from all backgrounds aren’t immune from being asked to help out during a financial crisis. New Yorker Nicole Bermack, for example, a video production editor, offered to help her parents delete their debt when she was in the sixth grade. Watching her parents suffer was, she says, intolerable.
“I can vividly remember the stress in my father's face as he and I would play in the park,” says Bermack. “He had so little free time. Even at a young age, I could tell that he was worried about the life his daughter would have.”
In fact, Bermack’s father was $300,000 in the hole as a result of a failed business venture. He had opened a luxury gym in a neighborhood that had no need for it. So she took it upon herself to get a job bagging groceries at a supermarket, and by seventh grade she was promoted to a cashier.
As a teenager she worked as a personal assistant on set for the TV show “Law & Order: SVU,” a fun but exhausting position. In the end, Bermack provided her parents with $150,000, and her father was able to pay off his debts when she was a sophomore in college.
Pitching in leads to many payoffs
As long as parents aren't asking their kids to compensate for their own poor financial choices (such as overspending on the credit cards to keep up with the Joneses), a pitch-in request can enrich their lives, says Joseph Eppy, president of Florida-based Eppy Group, a financial planning company.
He paid me $10 an hour, but half of it I had to give my mom. I have seven brothers and sisters and they all did this. She had a coffee can by her bed where she put the money.
Among the valuable lessons Eppy says kids will glean:
- Budgeting skills. When children witness their parents paying down debt or not getting into it by adding more money to the pot, they can learn how to manage expenses.
- The importance of saving. If the debt didn’t exist, the family wouldn’t have to resort to extreme measures to delete it.
- Understanding how to prioritize. Basic expenses must be met first, then luxuries. That’s the proper order, and it needs to be learned early.
- Life is not always fair. “You may have to work harder than other people to gain the same result,” says Eppy. “That’s just the way it is and getting used to it early is important.”
- Heightened self-esteem. “You're accomplishing something,” says Eppy. “You feel good about yourself, and you should!”
Moreover, asking kids to donate some of their earnings to the family can also squelch a spoiled attitude, as long as parents are gracious and are clearly working hard to solve a problem, says Atlanta psychologist Erik Fisher. “The best way to prevent entitlement is to teach your kids a sense of responsibility by modeling responsibility,” he says.
In Nguyen’s experience, being an essential part of the family’s finances before even reaching her teenage years instilled a sense of unity. “We stuck together during hard times.” she says. “We knew what [mom] did for us to come here and how hard she worked. Why wouldn't we do the same for her?”
And Bermack? When she told her boss about her childhood experiences, his jaw dropped. “He said, ‘Nicole, you're the most hard-core person I know,’” she says. “And he uses ‘hard core’ as a synonym for hustle and positive attitude. I'm extremely grateful for my life now, not having any debt, and having all the opportunity in the world!”
When to have the kids contribute
-- and how to ask
Certainly not every parent deserves a bailout. Tyler Davis, a teenage barista from outside Columbus, Ohio, said his mother has substance abuse issues and frequently runs up her credit cards and takes out payday loans, then begs him and his brothers for money.
“Last year, when I was a senior in high school, I was working at night and Saturdays, and she would want me to give her my paycheck to pay her bills," says Davis. "She gave the guilt trip like, 'Oh I used the cards for you and sports, you should pay me back so I can pay my cards.” He refused, not believing it would really go toward the debt. "And even if it did she'd do it again.”
“Ideally, I believe that children should never have to feel responsible for taking care of financial issues at home,” says Fisher. For it to be a healthy arrangement, kids should reserve the right to say no.
For parents who do feel the need to solicit economic assistance from their kids, he recommends a variation of the following verbiage: “Right now, we are having some challenges with our finances and can really use your help.
“Our family is like a business. We have to have the same amount of money coming in as is going out to at least break even. At this point, we have more going out than is coming in. We have looked to reduce costs, and if you like, I would be happy to go over the expenses with you. What would help is if you can find a job to help cover the expenses.”
Be specific about the aim and the precise amount of money needed, too, and let the child keep at least some earnings, says Fisher. Don’t neglect to be humble and candid.
“Say, ‘I am very sorry that this situation has arisen, and I would be happy to talk about how you feel about this. I am also open to your suggestions,’” he says. “Let them know their efforts are appreciated. Be careful not to use fear, guilt or shame. Help to empower them and teach them to learn from your mistakes.”
As for how much time is right for a school-age child to toil, a study conducted by The University of British Columbia found that 15-year-olds who work during the school term are forced to learn valuable time management skills, thus bettering their career prospects.
“Each kid is different, and you have to be aware of personal stress levels, school needs and unstructured time,” says Palmer.
For parents who worry that having kids work and contribute to the family needs is wrong or harmful, take it from Bermack – they may gain more than they lose. “I think childhoods are for learning as much as possible, which I certainly did. I developed an extremely above average work ethic, networking skills and some good business knowledge. I'm definitely better off now due to these skills.”
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