Talking with kids about tough times

Janet Bodnar, deputy editor of Kiplinger's Personal Finance magazine

TEXT OF INTERVIEW

Tess Vigeland: At this point you're probably wondering if the bad news will ever stop. Your kids might be wondering, too.

We sent producer Stephen Hoffman out to ask a few of them what they know about the Wall Street cooties:

Kid 1: I've been watching the news all day.

Stephen Hoffman: What do you think would happen if no one had money anymore?

Kid 2: I would just not buy anything.

Hoffman: Really?

Kid 2: Mmhmm. I could go to another country and get it -- like Detroit.

Hoffman: What do you think would happen if your family didn't have any money?

Kid 3: Then we wouldn't have enough money to pay off our house.

Kid 4: I think I would probably ask how we were going to get along in life with like food and clothes and all that.

Oh, that's not good. Don't think that way, kids! And Mom and Dad: don't let 'em.

For some advice on how to talk to the young-uns about this mess, we turn to Kiplinger's Janet Bodnar, and Janet, if a parent is worried about the economy, is it likely that their kids are gonna pick up on that?

Janet Bodnar: Kids pick up on any kind of tension in the household between you and your spouse no matter what it is. Even if they don't understand the particulars of what's going on, they may understand that there's something wrong here or Mom is worried or Dad is worried and so that's something for parents to be aware of.

Vigeland: How does it manifest? How do they tend to react so that you can be aware as a parent that they're actually kind of worried about what's going on?

Bodnar: Well, I think what would normally happen is that they might come up with a question for you. Maybe your knee-jerk reaction would be well, the kids are too young to really deal with this and so you might want to just kind of say, "Oh, well, you don't have to worry about that" and that's really not what you want to do because that kind of worries them a little more. So I think just listening for questions that they might ask or turning the question on them and saying, "Do you understand what's going on here?" or "What do you think is going on?" and just seeing what response you get because you might get something that is totally off the wall and unexpected that you can easily deal with.

Vigeland: How much information would you say is too much? Does that depend on how old they are?

Bodnar: Exactly Tess. It really is an age-appropriate thing. So let's say you're worried about losing a job. Then you might want to discuss with your kids, you know, less money available, or even if you're not losing a job maybe you want to pull back a little bit. You might want to talk about that with the kids: "Oh, you're going to have a shorter list this year. We're going to cut back because we want to save our money. We're going to put money into the bank," just sort of preparing the kids for not asking for a lot for Christmas. That sort of thing.

Vigeland: But how do you get that message across that spending might be a little different, in general, as you mentioned, perhaps a job loss, which is accompanying a lot of this credit crunch. How do you make sure that that doesn't get the kids worried, because they must be pretty aware of their financial situation?

Bodnar: Well, first of all, I thing what you would say if a job loss were certainly the issue, you would tell the kids what you would do in the event of a job loss. You would say, "Well, I'm going to be switching work" or "I'm not going to be going back to my regular job, but this is what I'm going to be doing:" Taking advantage of outplacement facilities that your former employer is going to be offering you. You would be looking for a new job. And if you could convey that to the kids in a reassuring way, that sort of thing can be very helpful for kids and it doesn't necessarily have to be worrisome, especially if you give them some advance warning.

Vigeland: Janet Bodnar is deputy editor of Kiplinger's Personal Finance Magazine and also the author of "Raising Money Smart Kids." Janet, thanks for helping me become an even more money-smart radio host.

Bodnar: My pleasure Tess.

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