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Are You Talking to Your Kids About the Financial Crisis?

According to money expert Suze Orman (who has become somewhat of a permanent fixture on “The Oprah Winfrey Show” as of late) the one bright side to our country’s current economic meltdown is that it is forcing parents to sit down and discuss money matters with their kids.

Have you had the talk with your kids yet?

You might have if you recently cancelled a planned family vacation in order to pay the mortgage or if you disconnected the cable in order to pay for food. Our nation’s current economic crisis has forced millions of parents from coast-to-coast to look for ways to cut household costs and in most cases those decisions impact even the youngest members of the family.

For example, if your child is used to having three juices to choose from on a daily basis and now all you can offer him is water or if he was used to being driven to soccer practice each day and now you are forcing him to ride his bike there, he’s going to want to know what’s going on.

Child psychologists say it’s important to talk to your children about the current state of our economy and address the financial decisions you are making that impact them, but in a way that won’t frighten or panic kids. Experts also note that if you and your spouse speak openly about your financial woes in front of your children (either consciously or unconsciously) they might sense your stress and become worried. To avoid this from happening child psychologists offer these tips:

For young children, experts suggest getting out play money, setting up a mock store and asking your child, “What if you want to buy something and you don’t have the money?” Then build on their answer and make it a teachable moment.

For older children experts recommend discussing the faltering economy in greater detail. While you don’t have to get into all the nuances that are transpiring on Wall Street and in Washington, it is important to involve older kids in finding money solutions. For example, if your daughter needs a new band uniform or your son needs money for a school field trip encourage them to think of ways to come up with the money. It could be something as easy as cutting out snack foods for a couple of weeks or holding a yard sale and selling some of their unwanted personal items to raise the money.

As Suze Orman pointed out during a recent Oprah appearance (in her trademark tell-it-like-it-is style) kids need to understand that their ballet and piano lessons cost money. Lessons are not free. Somebody has to pay for them. Children need to realize that when money is tight the entire family has to sacrifice.

Or as one financial expert astutely pointed out: “The way you raise fiscally responsible children is by not making money this thing that’s shrouded in mystery. If more people did that with their kids, we wouldn’t be in the mess we’re in now.”

What have you told your kids about the economy?

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This entry was posted in Parenting Tips/Techniques and tagged , , , by Michele Cheplic. Bookmark the permalink.

About Michele Cheplic

Michele Cheplic was born and raised in Hilo, Hawaii, but now lives in Wisconsin. Michele graduated from the University of Wisconsin-Madison with a degree in Journalism. She spent the next ten years as a television anchor and reporter at various stations throughout the country (from the CBS affiliate in Honolulu to the NBC affiliate in Green Bay). She has won numerous honors including an Emmy Award and multiple Edward R. Murrow awards honoring outstanding achievements in broadcast journalism. In addition, she has received awards from the Aircraft Owners and Pilots Association for her reports on air travel and the Wisconsin Education Association Council for her stories on education. Michele has since left television to concentrate on being a mom and freelance writer.