09.26.08

Kids and Money: How Much Do You Tell Them About The Economy?

Posted in Kids and Money at 4:06 pm by CreditMom

There is much debate on how much to tell your children about the current economy.  It’s the main focus of the news, it’s talked about in school and we live in an area where many parents work for major financial institutions.

I feel it is important for children to understand the current economic issues in an age appropriate fashion.  But how do you explain the economy without instilling fear and insecurity?   The Wall Street Journal has an interesting post on explaining the current economic mess to children.  Below is their age appropriate guide to communication.  Personally, I read through it and feel it’s a bit too vague and over protective for the older ages. In fact, the messages really don’t vary that much by age…go ahead and read for yourself….  

At some point you need to involve your children in family finances.  How do you prepare them for life situations by just comforting them and saying every thing is ok?  There is an example in the WSJ article in which a father explains to his daughter they need to trim back a bit.  His daughter made a list of all the things she could cut back on (movies, etc).  The father reacted by telling her they weren’t that bad off instead of complimenting her for her foresight.  I would be thrilled if any of my children were mature enough to do that! Yes, you still have to reassure your child you are in control of your financial situation but children also need to do their share as part of the family unit.  I’m not saying you send a 10 year old out to work but there are many ways a child can help out when times are rough.  For example, if you cancel the lawn mowing service to save money, your child can take on that task etc. 

We explained the economic crisis to our children the best way we could, afterall it’s not that simple for even us to understand.  I thought this post from the NY Times  was helpful (although a bit slanted) when speaking to our children because it’s written in layman’s terms.  Do they get it?  Not fully but they do understand conceptually we are in a time of major belt tightening and we all need to do our share.  So now when we shave a bit off their allowance and curb our dining out events they at least have a basic understanding of where we are coming from and are part of the “team”.  They may not like it but quite frankly, we’re not loving it either.

Life is about ups and downs.  If we keep telling our children everything is ok how will they ever learn to manage without us?

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