Experts offer guidelines for talking to your child about the effects of the recession on your family.
Talking to your child about the recession can help put worries about your family’s financial situation into a healthy perspective.
“Parents may think they’re hiding their financial concerns from their children, but children almost always pick up on their parents’ stress,” said Catherine McBreen, president of Millionaire Corner. “Children can blow these worries way out of proportion unless an adult helps put them into context.”
Children require a simple explanation about why people are stressed about pay, jobs and other financial issues, and how it will impact them personally, according to an advisoryfrom the Early Childhood and Learning Center, part of the U.S. Department of the Health and Human Services.
The center advises parents to choose their words carefully when discussing their financial concerns. “Comments like, ‘We just lost your college savings,’ or ‘I might lose my job,’ can be very upsetting to children,” said the center. “In times of uncertainty, try to focus on what you do know and offer reassuring words.”
Parents can explain, for example, that the family has enough to pay for food and their house, but has to spend less on eating out. They can reassure their children that the family can still have fun, even though it is cutting back on spending.
The amount of information shared should reflect a child’s age and developmental level. Younger children typically require very concrete answers, advises the website Scholastic, which explains, “A lot of what has been going on is very complex, not even clear to the majority of adults, so it is doubtful that children not yet in middle school will grasp it.”
Young children will care most about the mood in the home and how the economy will directly affect their family. “If certain luxuries have to be given up at this time, explain that almost everyone is feeling the pinch of a troubled economy,” advises Scholastic. Parents can explain that there have always been ups and downs, but the economy always recovers in time.
Parents are also encouraged to limit their children’s exposure to media coverage of the recession. News about people losing their jobs and homes, and America’s larger economic problems, can be extremely upsetting to young people, said the early childhood center.
Talking to children about the recession can also open the door to a larger discussion about financial management, said Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation. She noted, “Sitting down as a family, looking at everyday expenses and talking about how best to manage them could teach them some important practical lessons that will ultimately help them feel more in control of their lives.”