Talking to Kids About Family Finance Problems

Tough money times are a part of life. You don't want to panic the kids, but there is no shame in being downsized or laid off. In fact, the average person will change jobs at least seven times—some of those changes will be by choice and some won't.

If all of a sudden, your kids see you at home, they may think the worst: that you are sick. Reassure your children that everything will be OK, and that it is just a hard time. Try to be as honest as possible. The biggest thing is that kids want to be a part of the solution. In other words, ask them to come up with some ideas to save money. Maybe you can turn down the thermostat (show them the bill and then the savings), maybe you all can make lunch and take it to work or school instead of buying lunch, maybe a video rental instead of the movie theater, maybe water bottles instead of designer water. Maybe they can clip coupons and help to save money.

Get them involved and encourage them to save some money, whatever the amount. Even if they are only saving a few dollars a week, congratulate them for their help. This makes this a family issue, takes the stigma away and helps them to understand some of the tough facts of life. And don't worry: All we can really count on is change.