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Calm Your Kids' Money Worries

Everyone's worried about money -- even kids. Calm their concerns with a truthful accounting of your family's situation.
Financial Security
financial security
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Marc Rosenthal

When trouble hits, your natural instinct is to protect your children by saying as little as possible and pretending everything's fine. This is a mistake because kids pick up on your tension, and without the facts they imagine scenarios far more terrifying than the reality. Job loss, home foreclosure, other financial concerns -- these are all family matters. By opening up and letting your children participate in resolving the family's problems, you'll reinforce important values, build their sense of self-worth, and model what it means to pull together. Kids can also learn valuable lessons about managing money. Use these strategies to make the best of bad times.

Give Them the Facts

Pick a time when you can be calm and sit everyone down together to explain what has happened. The younger the kids are, the less detail they need or want. Just give them the basics, starting with a simple statement, such as, "Like lots of people nowadays, I've been laid off from my job." Then provide a few more details and quickly reassure them that you have a plan and that everything will work out: "Don't worry. Your father is still employed. I'm already looking for another job, and we're going to be fine." Keep the meeting brief, and if you start to feel emotional and overwhelmed, take a break and continue the talk another time.

What kids care most about is how they'll be affected. So if you've been laid off, you might say, "The good news is that while I'm looking for another job I'll be around more during the day. But we will have to cut back on some things. We won't be eating out in restaurants as often, and we're going to hold off on a summer vacation. But we'll still have fun by going camping somewhere nearby and having lots more barbecues in the backyard."

Ask for Their Ideas

It's important to involve your children in problem-solving -- tweens and teens can be really creative. Urge them to come up with extras they can cut back on or ways to barter their services for those of others. In exchange for their guitar lessons, for example, they can mow the teacher's lawn or help her clean out the garage.

Have everyone brainstorm money-saving ideas like planning less expensive meals, or cutting transportation costs by walking or biking more. Then together choose the ones to put into action.

Encourage your kids to come to you with questions. Instead of waiting for them to ask, though, look for casual moments to explain things. In the grocery store you might point out ways you're cutting back. Also give them quick updates on your progress. If your job search drags on, tell them the process is long, tedious, and slow, but that you know you'll find something.