By Dixon Bledsoe
For parents, the holidays are often pressure-packed with family get-togethers, work, the demands of winter travel and kids. This year, finances play a larger part in the stress wars than perhaps most can remember. The economy is on the skids and pressures on the family budget are even more acute during the gift-giving season.
Regardless of the time of year, parents must decide if, when, and how they should talk to their children about money. Short of telling them Santa was injured in a work-related accident and is on travel restrictions and bed-rest this Christmas, parents should think carefully about what their kids should and shouldn’t know about the family checkbook.
Jody Guyette, a clinical psychologist who works with young patients in the mid-Willamette Valley, advises parents to tread lightly when discussing money with kids and keep the discussion age-appropriate.
“I think kids under 5 have a very limited awareness of the financial situation so I’m not sure there is much discussion with them. At 4 or 5, a parent can, however, start to teach children to save money by simply using a piggy bank or saving for a special toy.” But, she said, “I think that translates to all age groups, teaching them the value of money and that they have to plan and save to be able to get what they want. The financial crisis is a perfect time to begin implementing those lessons.”
Guyette has clear guidelines for giving kids the realities of limited income.
“I don’t think parents should ever discuss their financial problems in depth. Kids already have enough stress in our society today. The way to address this is to be honest that the family is having a tougher time financially but to not give specifics and again use it as an opportunity to enlist your child’s help with budgeting. As much as possible you want to shield your kids from your own stress around financial issues. Also, use it as a chance to do a little history lesson. Talk about the Great Depression and other tough economic times and that we have always recovered, eventually, from those. The important thing is to make kids of any age feel secure.”
In the magazine Money Talks , experts from College Parents of America recently gave tips for talking to young adults about money. The key words? Young adults.
“Young people view managing money as a symbol of maturity and independence. Discussing personal finance with them shows them that you see them as responsible adults. Keep the conversation positive; set a tone of confidence, openness and trust. Laughter helps. Lighten the mood with a joke. Make the talk an equal exchange, not a lecture. Ask plenty of questions and listen carefully to the answers. Don’t talk down and don’t bring up old financial disagreements you may have had.”
Kids’ Health magazine says honesty is the best policy, “But don’t tell them more than they need to know. Avoid overloading older kids with too many details or worries that might scare them. Even young kids are brand- and consumer-aware these days, so don’t expect them to volunteer to scale back on their treats or activities right way. If you want to encourage budgeting behavior, offer incentives to get kids on board.”
A key strategy is to tell the truth and keep it age appropriate. Kids are probably not going to want to press for details in a discussion regarding the stock market and the dollar’s fall against the euro. But they need to know money is limited and that necessary purchases need planning, discretionary purchases need to be prioritized and some niceties will have to wait.
Another tip experts all agree on is learning to say “No.” This is perhaps the hardest word to master. But in this economy, everyone has to sacrifice, everyone can be part of the budgeting solution and every family member can contribute to keeping a positive focus toward the day when things will indeed get better.
