Here is some intelligence for parents: How to talk to your kids about these tough economic times. Here are a few tips from Forbes.com.
- The WORST mistake is trying to hide your financial problems. Even young toddlers can pick up on tension in a home and not talking about your money issues leaves kids to imagine the worst. So talk to your kids. Family social science professor Catherine Solheim says being direct and open is the best approach. Avoid sugarcoating the message and just explain that the family will have to cut back on spending for a while.
- When you DO talk to your kids: Consider their age. Most younger children won’t understand words like “unemployment” and “foreclosure.” So, your conversation with them may just involve telling them that things are only temporary and that Mommy and Daddy are here for them. However, a 15-year-old might have a whole string of questions that need answering. Just keep in mind that no matter how old they are, children want to know that no matter what happens to the economy, your family will always stick together.
- Also, when you talk to your kids about the economy: Work together to find ways to cut corners. For example, you could decide that you’re going to stop your weekly trip to the movies and rent a DVD instead. Kids like to feel that their opinions and input counts. However, DON’T send mixed messages. If you say you need to cut back on spending as a family – but continue to buy a gourmet latte every day – your kids aren’t going to get the message.
- Leaner times can be a good opportunity to teach your kids lessons about money. For example, when your child wants a new video game, you could explain that if you bought them that video game, you wouldn’t be able to buy groceries that week. This’ll help teach your children the difference between “needs” and “wants.” You could also put their weekly allowance on a debit card, and if they run out of money, that’s it for the week. If your children learn that they can’t always have everything they want, they’ll learn how to budget and live within their means when they get older.