Explaining Inflation to Kids

Our cost of living is rapidly rising, which is causing significant stress for Americans throughout the country. Psychologists are reporting an increase of individuals seeking therapy and counseling services due to individual and marital stress as a result of increasing cost of living. Additionally, we are experiencing inflation rates that are impacting our daily lives to the point our children are likely to feel the impact, but we may have no idea how to address this with them.

Explaining Inflation to Children

As adults, we may notice increased prices when it comes to our weekly expenses, such as grocery costs and gas prices. However, our children who may not be involved in financial planning may not understand these price increases; therefore, may not understand why you may be making some adjustments to your regular spending habits. At first, we may not want to talk to our children about the rise in the cost of living, assuming that they may not be directly impacted. However, it is typical for children to begin asking questions when they notice changes, such as parents saying no more often when asked to buy certain things or when certain activities and travels are limited. Parents are often unsure of how to answer these questions due to not wanting to cause additional stress on their children- but at the same time, they want their children to understand how the economy works and why inflation occurs.

How to talk to your children about inflation and the rising cost of living:

Inflation occurs when an economy experiences significant price increases on goods and certain services. Typically prices rise when the demand for goods is greater than the availability of goods and services are limited for numerous reasons. In order to help you children understand the impact of inflation at a developmentally appropriate level, it is first important to teach them about the value of money and budgeting. Many children may start earning a small allowance on a weekly basis for the completion chores and children are often motivated to earn money in order to buy things they want. Many parents encourage their children to first watch their money grow by helping them understand the concept of saving. When the child is ready to buy a product with their money, they begin to understand the value of money and how much money certain goods are worth. When the concept of inflation is introduced, parents can explain to their children the same way a balloon gets bigger when it is inflated, prices get bigger and increase when our economy experiences inflation. It may be helpful for parents to show specific examples of price increases by using products their child might have bought in the past and compare the price they paid to the current price.

What should I do if my child is experiencing stress directly related to inflation rates?

Similar to adults, children may benefit from counseling services when they experience stress related to financial adjustments or difficulties. A psychologist can help provide your child with a therapeutic and safe place to discuss any stress or confusion they may be experiencing. Family therapy services with a psychologist can also benefit families who may need some guidance while they navigate through the changes they may be experiencing due to the increasing cost of living. Psychologists help individuals in counseling identify specific triggers to their anxiety or stress while helping them gain the ability to utilize effective coping mechanisms.

Uncertainty and changes can often bring up difficult emotions for individuals. If you or your child is having a difficult time coping with changes that are occurring, you are not alone. Reaching out to a qualified psychologist can help. Please contact The Miami Psychology Group if you are interested in learning more about our therapy and counseling services with our psychologists. Psychologists are our office provide individual, family, and couples therapy.