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What Your Kids Need To Know about Tough Economic Times

  • Mary Hunt Debt-Proof Living
  • Published Dec 03, 2008
What Your Kids Need To Know about Tough Economic Times

One of my scariest childhood fears involved communists, nuclear bombs and getting kidnapped by Russians. If that wasn't bad enough, I just knew they'd sneak into town and grab me at noon on Thursday, the exact moment the citywide air-raid sirens would sound for the weekly test. My keen imagination kept my stomach in knots and my emotions on edge because no one explained to me that I would be protected no matter what happened.

It's no secret that we, as a nation, are going through economically troubling times. Your personal economy may be experiencing similar challenges. Just how much should your youngsters know about the national economy and your personal financial situation? I have a few thoughts:

If your kids are old enough to be aware that something is going on with the national economy, talk about it. Keep it simple and brief, following with an assurance that national and world economies have been going up and down for centuries. What goes down, always goes back up. Limit (or eliminate) kids' exposure to TV news and radio talk shows that drone on and on about the economy. Kids may not understand what they hear, but they'll pick up on negativity and start to worry about things over which they have no control. Assure them that the most important economy is the one within your home.

Parents should not, in my opinion, tell children how much money they earn. Whether you are at the poverty level or well-heeled, kids don't need that information. Most children don't know how to interpret salaries and annual income.

If they ask about your specific financial situation, answer with a question, like "Why do you want to know?" If your child worries you'll be homeless tomorrow, assure her that is not the case. If your child asks so he can brag to his friends about how rich he is, the answer should be something like, "That is Mommy and Daddy's private information. It is okay for parents to have financial privacy."

One woman shared with me how, as a child, her entire attitude about life and material things changed the day she learned her father made a six-figure income. Everything shifted as she decided they were the richest people in the world and she deserved whatever she wanted.

A frugal lifestyle, where you live below your means, is the best environment in which to raise kids. When children observe their parents consuming carefully, making wise spending decisions, choosing not to buy the biggest and the best, and not living on credit, they begin to assimilate those values. It is reassuring for children to know that their parents are savers and have money in the bank. That builds a sense of security that "we'll never be broke."

Rather than telling your kids, "We can't afford that," say, "We don't choose to spend our money in that way." Now you have delivered a positive message that you have money but you make intelligent choices about how to spend it. That makes kids feel safe. It tells them that their parents are protecting them. When you say "We cannot afford this or that or to go here or there," kids hear, "We are poor. If we weren't so poor we could have this or that and go here or there." They quickly assume that money is the key to happiness. If we just had enough money we could be perfectly happy.

Don't aspire to look like the most affluent family in the neighborhood. If yours is a one-earner family, don't live the lifestyle of your two-paycheck friends. Rather than constantly striving to keep up, look for ways to downshift. Don't live to consume and don't base your self-worth on your net worth.

The most important thing you can teach your kids (and yourself) is that, together, we can weather any storm. And we will.

P.S. Do you have a strong opinion about this column, or a comment about how you protect your kids from the burden of the deflated national economy? Visit Mary's blog, "Money Rules, Debt Stinks" at There, you can share your own two cents on the topic and have your comment widely viewed by Mary's other readers (and Mary herself, of course).

Copyright © 2008 Mary Hunt. All rights reserved. Permission to reprint required.


Check out Mary's recently released revised and expanded edition of The Financially Confident Woman (DPL Press, 2008).

Debt-Proof Living was founded in 1992 by Mary Hunt. What began as a newsletter to encourage and empower people to break free from the bondage of consumer debt has grown into a huge community of ordinary people who have achieved remarkable success in their quest to effectively manage their money and stay out of debt. Today, "Debt-Proof Living" is read by close to 100,000 cheapskates.  Click here to subscribe. Also, you can receive Mary's free daily e-mail "Everyday Cheapskate" by signing up at