Talking the money talk

When my 5-year-old overheard recently that a friend’s father had lost a job, he asked me, “Can we help him find it?” Children may have an idea of what money is, but they can’t wrap their minds around the big concepts. You may think this means it’s better to hide money problems from them. But as we all know, kids observe and absorb our every mood - even if they don’t fully understand it. That goes for our anxieties about finances, too.

One of the big questions in this recession is how do we, as adults, talk to our children about money? It’s a bumpy road to travel, but it’s the only route to helping your kids understand the money problems that might exist in your own families. Until they hear what’s going on from you, their fears could be spiraling out of control, based on information they’ve overheard from adult conversations, schoolyard gossip, and news reports.

Older kids are online, watching TV, or reading the headlines decrying the latest unemployment figures. They won’t be as shocked if the family has to make changes. Explaining that times are tough everywhere, that other families are making do with less, too, will help. Tell them you’ll make sure they have what they need, but, for now, no more extra spending on things the family can live without. Ask for ideas about how to make a leaner family budget — you may be surprised at their suggestions and willingness to pitch in.

If the problems are big, like you’ve lost a job or may have to move, kids will need your reassurance more than ever. Tell them that even though part of your life is different right now, they’ll have what they need. You’ll still bring them to school, help them with home work, make them dinner and put them to bed at night.

There’s another benefit to talking with kids about money: how you talk to your kids will also give them the tools to talk to each other.

The other day I was talking to my 14-year-old daughter and some of her friends, and it was heartening to hear how they’d become much more sensitive to each other because of the tough economic times.

One boy said, “If you have money, you don’t want to be a show-off, and if you don’t, you don’t want to be a moocher.” A girl added that “It’s a really sensitive topic because we know that with the recession some families are in trouble.”

The bottom line is that kids of all ages need to know we’re there for them no matter what. They need to know how they can pitch in for the family, too. Talking about money is one way to bring the family closer together — and that, in turn, helps our kids talk to each other, and be compassionate, supportive friends.

© 2009 Beth Kobliner, All Rights Reserved

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About Beth Kobliner

Beth Kobliner

Beth Kobliner is a personal finance expert, magazine columnist, and commentator who offers practical advice and insight on a wide range of economic and financial matters. She is author of the New York Times bestseller, "Get A Financial Life: Personal Finance In Your Twenties and Thirties." A graduate of Brown University, she lives in New York with her husband and three children.

Beth Kobliner

"Get A Financial Life." Beth Kobliner’s New York Times bestseller. Get more info or visit Beth Kobliner's Web site.