Talking to Your Kids About Financial Anxiety

Growing up in Michigan in the 1980s, my family lived through an especially bleak period of economic history. Though I was in elementary school at the time, I was acutely aware of the economic uncertainty in my corner of the world. Several of my classmates moved to Alaska, California, and the South, their parents unable to find work. My father went through long stretches of unemployment over the course of four years, with stints at work just long enough to prolong his unemployment benefits. I remember the nightly news compared Michigan's unemployment rate with that of the Republic of Ireland's (around 13%, if memory serves--but oh, for Michigan's economy to be compared to the Celtic Tiger's now...)

If you are feeling anxious about your family's financial situation, chances are your children feel it, too. Here are three things you can do with children of all ages to help assuage your family's financial anxiety:

With Toddlers: Just say no. Perhaps you bought special treats for them while out shopping before. You are in charge, and it's okay to say no to purchases you might have made before. When grocery shopping, pack along snacks you know your toddler enjoys to avoid tantrums in the cookie and cracker aisle. And if your toddler screams throughout the store for that special snack, that's okay (albeit, highly irritating). If people glare at you in the store, remind yourself that those looks mean, "that's a parent who knows how to set limits." Good for you!

With elementary-school age kids: They really want to be helpful. They really do. And they understand the ethic of helping their family. Explaining to them that while certain activities might be too expensive (e.g. lavish parties, theme parks, camp), there are lots of ways to have fun or to earn money towards something they'd like to do. Your kids might enjoying organizing a garage sale of their unwanted toys and clothes to put toward something they really want. They can have book or toy swaps with friends to get a new-to-them item. And to help them understand the ways they are fortunate, your family can volunteer at a food bank or homeless shelter. They really, really want to be helpful; they just don't always know how to do the helping.

Tweens and Teens: This age group is hard, no doubt. They are under a lot of pressure to look the "right" way. Let them know that you understand style matters at this age. Also let them understand how much is in your family budget for things like clothes. If they haven't discovered it already, your t(w)een will appreciate how much further her clothing dollar goes at thrift stores. (I just saw a navy pleated mini-skirt with green embroidered skulls at Goodwill that I would have killed for when I was 16 and first discovered the many joys of thrift store shopping.) And speaking of budgets, if your t(w)een is interested, share with them the family budget. Maybe she has ideas for trimming costs. A real go-getter might find you a more competitive rate on insurance or a mortgage, or compare prices online for regular purchases. As the recent mortgage crisis points out, it's never too early to give your children a good financial education.