Talking to Your Kids about the Economy

It's a good idea to find out what your children have heard and are thinking about the economy, and to reassure them if necessary. You may see warning signs that they're concerned. "They may act withdrawn, or different from normal," says Francie Alexander, chief academic officer at Scholastic Inc., New York.

"You can say, ‘It looks to me like you're worried; let's talk about it,' " she continues. "Start by listening or asking questions, and then share information appropriate to their ages and stages." 

It's important to be factual, and to speak at their maturity levels—which aren't always the same as their age levels, adds Rick Kahler, CFP, president of Kahler Financial Group in Rapid City, S.D. "Obviously you'll tell a teenager more than a four year old, but that's why you start by asking questions, so you can build on what they already know."

They need to know the situation and that you have a plan. You might say, "Mommy's company ran out of money and she's looking for a new job," says Alexander.

"You don't need to say much more to younger children, but they're comforted when they know what's going on, what might change in their lives—such as not going to the movies for a while—and that you're working on it," she says.

Children who are a little older and more mature may ask further questions. Answer them directly, but without complicated theoretical discussions that could cloud the issue.

Teenagers will generally appreciate more details. "I might tell them there'd been company-wide lay-offs, that jobless numbers were going up in the community, and that I was concerned," Kahler says.

Teaching children how to use money is an important skill in today's world. "If you haven't done that, take this crisis as an opportunity," advises Alexander. TCU has free resources and programs that can make it easy.

Copyright 2009 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.