Keep it simple when talking to kids about economy

This is a very relevant article about how to speak to your kids about tough economic times. It is critical, as Family First Entrepreneurs, to pull our children into family economic decisions. Don’t try to keep these things under wraps. Kids are curious and are not oblivious, they will figure it out anyway.  It’s better to openly discuss these issues with our children so they aren’t guessing and they will also get a chance to see you model good financial behavior. 

Keep it simple when talking to kids about economy, experts say

Article from the Wichita Eagle at www.kansas.com.
http://www.kansas.com/news/education/story/743368.html
Contributing: Brenda Gutierrez of McClatchy Newspapers, Lori Yount of The Eagle

With layoffs happening around the country, and national and international economic uncertainty, many families have been forced to tighten their belts.

Adding to the challenge for parents is how to explain the family financial crunch to their children.

Local and national experts advise parents to keep the conversation simple, stick to the basics and offer lots of reassurance.

"A child may ask, 'Are we going broke?' Well, no, you're not going broke, but you may have to make some changes," said Thomas Young, chief operating officer at the Children's Home Society of Idaho in Boise. "Give them simple answers they'll understand."

At Wichita's Benton Elementary School, poverty levels are rising as aircraft plants and other companies lay off the parents of Benton students, said Marcia Fletcher, a mother who serves on the school's site council and Parent-Teacher Association.

Fletcher said she and her husband have had layoffs in their offices. Their fifth-grade son, Austin, is "a worrier," she said.

"I try to remind him there are really great things in the world" that he can offer, such as friendship, Fletcher said.

They've tried to find little ways to help his friends whose families are facing tight budgets, such as taking extra snacks to share on school trips, Fletcher said.

It's an opportunity for the family to reinforce the importance of frugality, by shopping for shoes in the sale aisle, for instance. And Fletcher said it's also a lesson on how education can help people adapt in hard times.

"We focus on the importance of going to school, staying in school and going to college," she said.

 Age-appropriate responses

Parents' approach to tough situations should depend on the age of the child, said Chuck Smith, extension specialist in children and family studies at Kansas State University.

"In preschool, the focus should be on protecting them," he said. "They're too young to understand the economics of the situation."

For elementary school-age children, a sit-down talk can be beneficial, but Smith said parents should be careful to not give more information than children need or say things they could misinterpret.

"Use terminology a child can grasp," he said.

Children in middle and high school should be involved in the discussion so they feel part of the solution, Smith said.

"They can find strength they haven't had in the family," he said.

With children in third grade or older, parents could have the whole family discuss their spending habits and how to modify them, said Carol Young, extension specialist in financial management at K-State.

"The parents have to be prepared to lead it in a positive way," she said.

They could list expenses on a flip chart and throw out saving suggestions, for example.

"You can talk about things that can't be changed," such as house payments, Young said. "It's clarifying what we have to have to exist and what we have if we had the extra money."

No matter what age children are, honesty is crucial, experts said.

"If you're laid off, and the lifestyle you've been enjoying is being modified, I don't think there's anything wrong with saying to your kids, 'Daddy just got laid off from his job, and until he finds another one, we're going to be cutting back a bit,' " said Paula Sharp, a licensed clinical social worker in Boise.

"Young kids have a hard time with the concept of time," Sharp said. "They may think what is happening in this moment is going to happen forever. You need to remind them you're hoping for things to change for the better in the future."

Parents also set the tone for how to handle difficult situations, Smith said.

Even if your family isn't struggling, your children may see other families or friends experiencing challenges and ask why.

"It's important to let them express their feelings and give them security -- reinforce we aren't going to have problems," Young said.

Above all, the constant message parents need to send their children is: "Our family is OK."

"What's really important is the fact that we're a family, we're here for each other, we love each other," Sharp said.

"What's really important in life are our relationships. The rest of it is really icing."

 Set the right tone

• Young children need assurance and security. "The younger the children, the more concerned they are going to be with what's going on and if they're the one who has caused the problem," Sharp said.

Let them know they haven't caused the problem, and they aren't being punished. "Their place in the family is secure. And the family will get through this together. That's what very young children need to hear."

• Teens can understand the opportunities. "For preteens and teens, this can show them the realities of life. They can learn to save money, and for the family to save," Young said. "There are obvious shifts. It's a good thing to save money."

• Watch for warning signs that kids are upset. Children often express themselves through behavior -- positively or negatively, Sharp said. They may have nightmares or act out at school.

"Children will pick up on emotions without having any understanding why they're feeling it," Sharp said. "If our parents are stressed out and tense and fearful and walking around on eggshells, the kids are going to pick up on that. They're going to be very worried and won't know why."

• Your behavior can set a tone for the family. "It's important for parents to keep their stress levels at a moderate level," Sharp said. "Emotional discussions need to be done in private. Then the parents can team up and approach current challenges together."

Parents may even see the stress in their child before recognizing it in themselves. "Children are often the explorers for the psychotherapy of the family in distress," Young said. "A parent will bring in a child and say, 'He's depressed.'

Well, how is your family doing? Where else might the anxiety be? You're dealing with the issue of how families interact. This is a family issue."

It's crucial for parents to offer a united front and to keep stress levels at a minimum for all members of the family, Sharp said.

"Avoid arguing about money in front of your kids," she said.

"As parents you're really struggling with your own fear and anxiety, and you do want to shelter your children from that. Get the support you need as an adult. There is a lot of fear out there, and that's to be expected."