How to Talk to Your Kids About Money Troubles
Sounds scary, doesn't it? But so is being open and honest when cash flow is tight or when Mom or Dad loses a job. No one wants to frighten their kids. So how should parents open a dialog about financial crisis? Simple, says Kahler: Be honest.
"Tell kids the truth, but don't be alarmist," he says. "Those who still have jobs may not get the raise or bonus expected, or higher costs may force lifestyle changes. Don't hide that information from your kids. Not knowing what's going on will only make them more fearful."
Be aware of your tone, and try not to panic, he adds.
"At the same time, assure kids that the family will be okay, that you as parents are taking care of things," he says. "If you don't panic, they won't either."
Kahler also advises parents to be honest when they lose a job. He adds that it is important to strike a balance between not being overly protective of children and burdening them with too much responsibility before they are ready.
"In case of a severe crisis like job loss, it's perfectly appropriate for older kids to pitch in and help," he says. "They may need to give up luxuries they're used to, provide more help with chores or possibly even contribute earnings from part-time jobs to the family treasury."
Last but not least, Kahler urges parents to lead by example; deal with your own fears, seek advice and cut out all extras.
"Make your own financial sacrifices first," he says. "It's easier for kids to give up ballet lessons if you've already canceled your spa membership and cut out your morning visit to the coffee shop."
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Start by teaching him that it is safe to do so.