Should you talk to your children about the economy?

toy-coins.jpgOne of the big responsibilities of any parent is how much to talk to their children about serious, complicated and potentially worrying issues.

On one hand, most parents want to allow children to maintain some degree of innocence, and to be shielded from the worst the world has to offer.

On the other hand, innocence is so quickly lost these days, and children need to be aware of certain issues so that they can be kept safe.

The current economic climate is causing many families to reassess what they spend their money on and how they live their lives. For many, it may mean a change in lifestyle because the mortgage costs more or the cost of living has increased.

Children aren’t stupid, and they’ll know something’s going on. How much should you tell them about the credit crunch and all that jazz?

Honesty, simplicity, and relevance is the best policy.

It may be that a child asks you what “the credit crunch” is. It may be that you don’t fully understand the intricacies of the global problem yourself (I certainly don’t) but by simplifying the situation and making it relevant to your family, it’s more likely to mean something to your child.

It’s probably best not to force the issue. If your child is showing no interest in the subject at all, it’s not worth making a big issue out of it – that could backfire and cause the child to become anxious about the situation.

It will depend on the age of the child as to if, when and how you tell them. Very young children are ultimately looking to you for their security, and no doubt you’re doing your very best to see that their needs are met. Why confuse them?

On the other hand, older children and teenagers may be much more inquisitive, possibly asking more demanding questions.

You might also find yourself being asked why you can’t afford those new trainers, mobile phone or games console. This is a good time to explain that, as a family, you have to look after your money and spend it more wisely.

Don’t make them feel guilty for wanting new things. Instead, suggest that, at least for the next few months, you’ll all have to find other less expensive ways of having fun and entertaining yourselves.

Your kids might get upset or stroppy, but often they do appreciate being included in things that affect the family. You could even begin introducing them to budgeting – though you’ll probably want to make sure you’re doing this yourself, first – as this will stand them in good stead for adulthood.

Every family is different, and you know your children the best, but these are some guidelines that you might want to adapt so that your family continues to feel secure and informed even in these more difficult times.

  • What do you think?
  • Have you talked to your kids about money and the current economic situation?
  • How did they react?
  • What advice would you give to other parents?