by Linda Saye

Created on: February 02, 2009

When hard times come knocking, as they have recently for so many families across the nation, it's really important to fill the kids in on the recent turn of events and the family's current financial situation. Children, and especially younger ones, are amazingly sensitive to undercurrents of stress and emotion, so, even if you and your spouse have made a commitment to not discuss financial issues in front of them, they can sense that something is not quite right. And, if you and your spouse are having full-on fights over financial issues in front of the kids, then their imaginations tend to run wild and blow things out of proportion.

In either case, it's best to be honest with them, and share as much information that you think is age appropriate. For younger children, keep your message simple, and clear. And, even if you're scared to death about your situation, when talking to them about it, stay as positive as you possibly can. For example: "Daddy just lost his job, so we are going to have to be very careful how we spend money. But, don't you worry. Daddy will find another job soon because he has a lot of experience, and there are many companies out there that would be lucky to have Daddy work for them".

Let them know that this is a family issue, and, as a family, there are things that everyone can do to help cut costs. Emphasize that the actions of every family member are important, and that, as a family you will survive and be even stronger as a result. List action items, to cut costs, somewhere in the house where everyone can see them. The list should include such items as: buying generic products versus brand products at the grocery store, turning off lights, TV's, and other appliances when not in use, taking showers and not baths to save water, and turning down the heat a few notches at night. Encourage the kids to come up with their own ways to cut costs, and add them to the list. Then, lead by example!

Discuss with them that frivolous items, such as video games, toys, books, and DVD's are not items that fit into the budget right now. Remind them that they can use local resources, such as the library, to borrow items. Suggest that they do a toy swap with their friends. Or, go shopping at Goodwill to see what treasures can be found for pennies on the dollar.

When hard times hit, it can actually be used as a great learning tool for your younger children. As long as you remain calm and united as parents, they will feel that they will be ok. Feeling reassured, they will learn important life lessons regarding money, budgets, and the economy that will serve them well down the road.

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