How to explain income inequality to our kids
By Kristen Frisa
Keeping up with the Joneses used to be something adults worried about. Increasingly it’s something our kids are dealing with at younger and younger ages.
As kids start school, they begin to feel the pressure to live up to their peers. While some kids go on trips to the sunny south during spring vacation, others stay put; while one neighbour keeps the newest video game console, another gets an older, used model.
We all can’t have the same amount of stuff. Income inequality in Canada has been on the rise over the past 30 years according to the Conference Board of Canada. According to a 2018 report out of Dalhousie University, income inequality in Halifax grew 37 per cent from 1980 to 2015, with the bulk of the increase occurring since the 1990s.
Dr. Patricia Lingley-Pottie, president and CEO of Halifax-based Strongest Families Institute, says this disparity can have negative consequences for kids, especially if their parents are stressed out just trying to keep food on table.
“Research tells us children are at higher risk of developing mental health problems and other health conditions when they’re in lower income families,” she says.
Donna LeMoine, a clinical social worker at IWK Community Mental Health and Addictions, agrees. “Kids are really impacted by how parents are experiencing life,” she says, “so if parents are feeling like they don’t have enough to give their kids, it’s going to create a lot of stress in the family.
“School gets to be this place where fitting in is really, really important. If you live in a family where things are tight and you’re not able to afford the clothes or the styles other kids have access to, that definitely has an affect on our sense of well-being and our self esteem,” LeMoine says.
Kassinda Tolliver is a Halifax parent who says she’s seen firsthand the affect financial hardship can have on kids. She says her kids sometimes felt left out when her family couldn’t afford all the frills of middle-class life.
“She didn’t have the nice clothes they had,” she says of her then 12-year-old. “It was quite a deal in the school she was in.”
School programs such as hot lunches and milk delivery can make the income disparity more apparent. Tolliver says when she didn’t have the cash for the school milk program, she wasn’t offered any program to help provide her kids with the service, because schools in her middle-class neighbourhood take for granted there are two parents earning income in the home. “They don’t consider that it would be a financial burden to the family,” she says.
Gin Yee, chair the Provincial Advisory Council on Education (PACE), says lower incomes can affect academic achievement, but he says administrators and school staff work hard to help lower-income families by paying for field trips and other school-related fees for parents who need the help.
If there’s a need, “it’s identified quietly, and it’s just taken care of,” Yee says. The thing is, he says administration doesn’t know to help if they aren’t notified. “Parents need to let the administration know they’re struggling and they need help,” he says.
LeMoine says she believes this community approach is the best way to help kids who have access to fewer resources. She says snack programs that invite all kids to join create a sense of community and belonging. “It gets to be a shared experience rather than a shaming or stigmatising experience,” she says.
It’s hard for parents to know how to react when their kids, just worried about fitting in, come home asking why they can’t have all the bells and whistles. How can the adults in kids’ lives help them understand the inequity of personal finance?
Talk about it
One of the mistakes parents make is they don’t want to talk to their kids about money, says Elisabeth Donati, an award-winning financial educator and owner of Creative Wealth Intl. She says you would never avoid telling a child to brush their teeth because you don’t want them to worry about cavities. Likewise, talking about money and how to use it can help a child from developing unhealthy habits.
So, when your child asks for things his peers have, have a frank discussion about why they want them. “There’s nothing wrong with wanting something,” Donati says, “However, just to want those things because you think having them makes you better, that’s a problem.”
Tolliver says she faced her children head-on with their income limitations. “I had to have the honest conversation that we didn’t have the same as everyone else had, and I did the best I could,” she says.
Then show your kid how money flows in and out of the household. Rather than simply telling them ‘No, we can’t afford that,’ Donati suggests going over the budget together, demonstrating why funds aren’t available, then try devising a strategy together to make room in the budget.
Give them practice
Donati says you can take some of the money you spend on your child, and instead run it through your child. By this she means give your child an allowance and expect them to use it to pay for things you ordinarily pay for.
For example, if your child wants to shop at the book fair, or to buy snacks at school, asking them to pay with their allowance gives them practice at allotting money in a responsible way. Doing this allows your child to practice making decisions, and to make mistakes in a low-risk scenario. It also helps them learn goal setting, an important life skill on its own that goes hand-in-hand with money management. If there’s a specific want or need, set a goal to get it, and then devise specific steps to save up the necessary funds.
Teach by Example
In her e-book, 3 Keys to Raising Money Savvy Adults, Donati suggests you first need to educate yourself about money so you can set a good example.
Your kids are learning by watching what you do, all the time, Donati says.
She says you can involve your kids when you pay the bills, showing them how to check the accuracy of the bills and how to keep track of what you’ve paid. She says if you pay with credit cards, make sure you enforce paying the entire bill each month.
Donati says she emphasizes the basic principles of money management, like ‘pay yourself first.’ It’s important your kids see you putting money away for the future, for emergencies, and for upcoming expenses.
Donati says attitude is important, too. Fighting about money or spending on things you can’t afford only passes those mindsets down to your children.
Donati says the key is shaping kids’ thought patterns to reflect a healthy view of money. You can empower yourself and your kids by teaching them to set goals.
If the have-not mindset is bringing your child down, you can help them by turning the thoughts around. “If we’re stuck in those negative thoughts it can cause a lot of anxiety or depression, so part of our approach is to change that thought process from a negative thought to a positive thought,” Lingley-Pottie says.
Take care of yourself
Teaching your kids self-care is an important aspect of their well-being. Demonstrating good habits, like taking time each day to focus on mental health, is crucial for kids. “A lot of parents don’t take even five or 10 minutes for themselves each day,” Lingley-Pottie says. “If we don’t protect our own mental health and take care of ourselves it’s just going to accumulate over time,” she says.
Problems such as depression, which can stem from lack of self care, can lead to health problems and missed work, which will adversely affect family finances. “It’s all related,” Lingley-Pottie says.