Talking to Kids about the Economic Crisis

Don’t be afraid to talk to your kids about money, especially as the December holidays approach.

November, 2008        

The Holidays are upon us and we may not be able to fulfill our kids’ holiday wishes this year.  Everyone is aware of the country’s current economic crisis.  It’s the worse since the Great Depression.  Here in the Seattle area, we have been hit hard.  Even if you have not personally suffered from the economic downturn, you likely know people who have, hear people talking, and the radio, TV and news headlines let you know.   While the cost of goods is rising, pay is not.  Friends and neighbors have been laid off.  Many are having trouble paying their mortgage, paying bills, selling property or getting a mortgage.  Insurance benefits are decreasing while premiums are on the rise. Our local bank is the largest in US history to go under.  More Washingtonians are without healthcare benefits.  And psychiatric facilities are closing their doors, leaving citizens without necessary care and sometimes without homes.

What do you children know about what is going on in the country?  How did they hear about it?  Parents are asking me frequently -- What, if anything, they should tell their children about the current economic crisis in the US?  Please talk to your kids!  How will they learn to be financially responsible if we don’t talk to them?  They are hearing about it from other people and places, so we must talk to them, reassure them, and use this as a learning experience for our children.  The key is to keep it simple and concrete for younger children, and involve kids in budgeting and pro-active activities.  But above all, be calm, confident and optimistic in your communications with children of all ages so that they are assured and hopeful about the family situation and the future.  (If your situation is so dire or your fears are so strong that you cannot communicate calmly and optimistically to your kids, you may want to consider reaching out to a friend or professional for help.)

What does it mean to be concrete?  Kids under age 8 to 9 think in concrete, black and white and literate terms.  You want to keep your information simple and straightforward.  Don’t try to explain the stock market or political theories – stick to concepts like right now everyone is having to spend less money, but families, banks and stores and the President are doing things to make it better soon.  If your child is worried about your job, or basic necessities, reassure them that you will take care of them and that this is temporary. Older children can process more information and teens will usually have more specific questions, ideas, and concerns.  Since teenagers are able to think abstractly, allow your teen’s maturity level to guide you in information that you share.  While a teenager may be able to understand adult concepts, they typically don’t yet have the emotional maturity to handle intense information and can feel overwhelmed quickly.

Are your kids unusually stressed out by the crisis?  Talk to them, answering questions at their level, and ask them how they feel.  Some signs that they may be overly stressed are persistent changes in sleeping, eating, mood and behavior.  These may be times to ask for help from a teacher, school counselor or private therapist.

Do talk to your kids about your budget and involve them in budgeting, appropriately.  Kids often enjoy helping to create food shopping lists and carrying them out.  This is a great tool for reinforcing math and organizational skills, and also teaching the life skills of budgeting.  The trick is to create a list within the budget and to stick to the list.  This can lead into another important life skill about identifying necessities versus luxury items and modeling savvy shopping sills and saving for luxury items.  In terms of saving money in the home, this is a great opportunity to reinforce energy and water conservation, as well as the eco-anthem “Reduce, Reuse, and Recycle.”   Here’s a great chance to teach kids home arts and repair (or learn them together!) – Cooking, sewing, knitting, basic home repair, auto maintenance, etc.  What an opportunity to save money by involving kids in home care and cleaning!  Have a clean time together teaching that cleaning is a way of caring for things, making them last longer and saving money!

With the holidays coming, this is an opportunity to remind, teach and focus on the meaning of the holidays rather than material gifts, not matter if you celebrate the holidays spiritually, socially, or both.  Consider talking to your family and kids about giving homemade gifts or certificates rather than buying gifts.  Consider opting out of expensive, high tech toys and faddish toys this season and enjoy some more simple and meaningful family time.  I will go out on a limb and suggest you turn off your cable/satellite TV and just stick to family movies.

Take the opportunity for you and your kids to volunteer.  You can try anything from volunteering time at an established charity or just do something to help out a neighbor in need, such as cook them a meal or do some yard work.  This will most likely bring a warm feeling to all, and help teach your children empathy for others.

Dr. Jolynn-Marie Wagner is a Psychologist practicing in Woodinville, Washington and specializing in treating children.  You can reach her at info@redwoodpsych.com.