My wife and I recently started running into some financial problems, and we are thinking of reducing our son's pocket money (he is 12). My question is, do we explain the financial situation to him?

I am asking myself whether the (possibly low) sum of the regular pocket money

will make a difference? Sensitizing your children to financial problems on the other hand is valuable. Surely it would help to have a transparent discussion on the topic with wording he can understand.

Maybe you want to explain the cause of the hardship and a strategy to get through,

then you could invite him to help you (if a cut down of his money really would make a difference though)

Hello! i hope this message finds you n your family in a better financial situation

as a pri sch teacher, i just wanna say that children r often more perceptive than we give them credit for. it's likely that your son has already felt/noticed the financial strain and tension

am reading this book "the art of money" by Bari Tessler. On pg 61, she shared a story about her client. essentially, her client was 8 years old and lent money to her mother who was in a tight financial spot. the client remembers feeling proud and grown-up.

just throwing up this idea into the mix of responses here. again from my experience: children want to do what they can to help us adults

I think it is fine to just give a broad, vague hint, without making it seem like there are even financial problems. Probably something along the lines of managing money better. But not to tell him about the true nature of the problem.

Reason: I don't think it is good for a kid's developing psyche to inform him of the full extent of your problems as it will erode his self-confidence and feeling of security, which will follow him into adulthood. As much as we wish that our children learn not to derive self-confidence from having money, we cannot deny that it does affect confidence. I think I saw an article once about how it affects children into adulthood, causes them to present themselves differently and make different decisions. So im not saying don't tell him so as to spare his feelings, but rather don't tell him so that his mental development will not be adversely affected in the long run.

If he persists in asking, just tell him you both recently did a review of your finances and felt that the family as a whole could afford to cut back on expenses generally, in order to prepare for the future or any emergencies.

Not too young. 12 is definitely capable of learning finances and understanding the situation.

Suddenly reducing his allowance without a good explanation would leave him thinking (or worrying) about a lot of things and lead to unnecessary anxiety or false awareness of the family financial situation.

The only thing you need to consider is how to bring him into the discussion. Keep it simple, don't need to go into lengthy details. And say his allowance is part of the expenses that needs to be re-budgeted. It can be a temporary measure, if so, assure him once the bad times are over, it will be readjusted.

If you want to give him a good financial lesson... Say, this is the amount you plan to cut.. ask him if it's ok, or if he thinks he doesn't need that much, will he be willing to take a bigger cut so that the family may resolve the financial situation even sooner.

You do need the kids to rein in unnecessary spending on their end as well, and also to understand why for now, they may not get their "requests" fulfilled.. e.g. the yearly trip, the usual Christmas gifts etc.

It's worse when they suddenly find themselves from "well to do" to "pauper".
Things can go better or worse, but keep them updated along the way, say monthly or quarterly update on the financial situation. Debrief and thank everyone for helping to tighten their purse strings in the trying times.

Everyone is on the same boat. Sink or live together.

Hope you get back on track soon.