Talking With Children About Financial Difficulties

Today’s economic times bring tough topics: job loss, foreclosures or changes in the family’s financial status. As much as we would like to shield and protect our children, it is almost impossible. Whether in the grocery store, at school or on TV, our children hear dire forecasts. Should we try to hide our own concerns from our kids? Most experts say no.

“Children are often able to detect signs that something is wrong at home. If left uninformed about their parents’ employment or economic status, children may become overwhelmed with negative thoughts or assumptions about their family situation,” says psychologist Victor Gardner of Detroit’s Henry Ford Health System.

These conversations are difficult for parents. Cindy Edwards, mother and professor of psychology at Meredith College in Raleigh, says kids need to feel a sense of security and predictability in their lives. She agrees that children need awareness, but the message has to be tempered.

“It’s important to reassure children that financial problems the family is facing are not the child’s fault,” she says.

Children are resilient and can handle bad news as long as they know their basic needs will be met. If you are facing difficult circumstances, the following steps may help you guide your family through this crisis:

– Talk to your kids at an age-appropriate level. Remember that they will respond to the level of assurance you can provide. Keep your message simple. “It’s important to reassure your kids that grownups are working on solutions to the problems,” Edwards says.

– Acknowledge that you will work together as a family. Martha Wadsworth, professor of psychology at the University of Denver, studies how families cope with financial stress. She says parents who are honest with their kids about finances actually lessen their children’s anxiety. Gardner notes, “When informing kids about job loss, parents should reassure their children that steps are being taken to cope with this situation, including seeking out other employment opportunities and making changes in their spending habits.”

– Outline changes with a positive attitude. Let your children know how things may change with real examples rather than general statements such as, “We are really going to have to cut back.” To make smaller changes, such as skipping movies or dinners out, suggest positive alternatives like renting a movie or making homemade pizza.

If your situation will have more impact, such as a move because of a foreclosure, point out you will still be a family and your children will be able to keep things that give them comfort: stuffed animals, clothes and friends for example, or that you will be staying at Grandma’s or a close friend’s house for a while.

– Keep the family dialogue open. Encourage children’s questions and allow them to express their concerns. Answer as openly and honestly as possible. The unknown is much more frightening, and a child’s imagination could be worse than the most dire real-life outcome. Be prepared with true answers: “I don’t know exactly when Dad will get a job again, but I know he will.”

– Encourage a family effort. Let your kids do something to help, whether it is as simple as turning out lights or letting them cut coupons. Provide older children and teens with a budget for a weekend dinner and let them figure out how to feed the family at a price you can afford.

– Reduce family stress. Parents can set an example in encouraging good habits during difficult times. Limit adult behaviors like drinking or smoking. Move toward exercise, good eating habits and positive family activities.

– Make teachable moments. Once kids understand the situation, look for ways to educate your kids about finances and the economy.

“One of the best learning environments is the grocery store,” Edwards says. “Rather than simply telling kids ‘We can’t afford that,’ help them to do the price comparison of what else needs to be purchased with that money. Help them to draw their own conclusions, and you will soon find an ally in your efforts to save money, and they can perhaps gain some respect for the challenges of keeping the family budget balanced.”

No one is facing these economic challenges alone. Many families are cutting back, losing jobs or facing foreclosure.

“You can’t protect your children completely, but that is not necessarily bad,” Wadsworth says. “It is a natural instinct for parents to want to shield their children from bad things, but part of growing up and becoming a self-sufficient adult is learning how to deal with problems and challenges. How do we learn how to cope effectively if we never get any practice at it? And the reality is that no matter how hard we try, it is impossible to shield kids from all difficult things.”

Is your child overly worried? Learn the signs of depression in different ages.

Julie Hanahan, a former parenting magazine editor, now tackles the issues of parenting from home. She is the mother of a tween and will soon add two stepdaughters to the family mix.

Categories: Finance, Money