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For: Valerie Chiu, 15, St Mary’s Canossian College
In today’s materialistic world, children are constantly enticed by trendy cosmetics, clothes and toys. Scrolling on social media exacerbates comparisons made regarding one’s possessions, as children yearn to be admired and accepted. This raises the question: should children be made aware of their parents’ financial situation?
According to a poll by British financial institution Skipton Building Society, 85 per cent of parents in the United Kingdom worry they will give their kids poor financial advice.
Knowing your parents’ financial situation can teach you how to wisely manage money.
Disclosing financial situations does not mean revealing a long list of figures. Rather, it means providing understandable information about budgets and whether you can afford certain things. Children will learn that their purchases should have limits and that buying excessive luxurious goods can have detrimental consequences on their future.
For example, if children know their parents are on a budget, they will not question why they cannot buy fancy clothes and toys. It can help prepare them for adulthood, when they will have to manage money independently.
In 2018, 81 per cent of kids in London were worried about their parents’ finances some or all of the time, according to American credit reporting agency Equifax.
Disclosing financial situations to children can reduce their stress and even foster better parent-child relationships. If they know their parents are financially capable, their worries will be alleviated and they can focus more on their studies and extracurriculars. And if they learn that their parents are struggling to earn, they may be motivated to reduce their purchases rather than simply being nervous.
A lot of children imperceptibly follow their parents’ habits. If their parents are open about their financial situation, children will be more willing to share their happiness and sorrows. This fosters a more close-knit environment with mutual trust and understanding. Better parent-child relationships can thus be built.
Some may argue that children will be overwhelmed by knowing their parents’ financial situation. However, being ignorant is actually more dangerous. Children simply need time to digest the information and adjust their spending habits and expectations.
Against: Wang Yu-hui, 16, Diocesan Girls’ School
Imagine a six-year-old, frustrated and disappointed that his family cannot afford toys for Christmas. His parents decide to silence him with “We can’t afford that; it’s too expensive for us,” followed by lectures on financial management.
As normal and common as this may seem, this sort of disclosing of a family’s financial situation to children does more harm than the temporary silence and peace.
First, children will experience potential shame or self-abasement.
Children are highly attuned to their parents’ tone and stress, according to Hong Kong’s Family Health Service, and are generally quite empathetic. The childhood years are a period of great personal development, with numerous studies showing that children grasp essential values by actively mimicking those around them – especially adults.
If a family is struggling, children may become self-aware of their “poor” status, which can lead to deep feelings of embarrassment, wrongly identifying themselves as burdens and a negative effect on their self-perception.
Second, beyond mental health, it can lead to significant social and developmental issues.
Children, particularly younger ones, often lack the ability to handle sensitive family data as their cognitive and social-emotional skills are still developing.
Financial figures may become the subject of playground gossip, leading to peer exploitation, judgment or even bullying. Such scenarios not only damage social life but also heavily affect a child’s development.
Last but not least, for wealthier families, disclosure of financial information risks a false sense of security or entitlement.
When children are aware of a large, passive inheritance awaiting them, it can diminish their incentive to cultivate their own financial ambition and work ethic, believing that success and wealth could be achieved without hard work.
They may develop a distorted view of money, confusing accrued generational wealth with personally earned income, sabotaging their chances of becoming responsible and self-motivated adults.
While some may argue that sharing a financial situation with children is educational, teaching can be done in alternative ways, such as thriftiness in daily actions. While it is important to make the child feel included, risky information should be kept confidential until the child is at a more mature stage.
