Think talking about the birds and the bees with your kids is hard? Parents these days are finding that talking to them about money can be even harder. This economic downturn may come as a bit of a shock to an entire generation of children and teens who have developed a sense of "entitlement" and are used to having the latest toys, gadgets, cars and fashions. When you face tough times, how do you tell your kids that they may have to give up some of the things they've taken for granted?
As hard as such a talk can be, it's important to educate your children on the responsibilities of planning out and maintaining a realistic personal financial strategy. This is true any time, but even more so now, when many family budgets need tightening.
Carmen is joined by Michelle Slatalla from The New York Times ("So, Kid, You Pay for College, Right?") and Mark Thornton, author and corporate mediation expert. Carmen and Michelle discuss how going through periods of financial hardships helped shaped their own lives -- probably for the better.
Often, children are more resilient than you might think, and they'll adapt to new situations, even if it involves cutting back on things they've grown used to while growing up. Usually all it takes is a good discussion in which the facts are laid out.
Mark states that this type of conversation, while difficult, provides a great opportunity to start teaching your kids about money, something that can't be done too early. Also, as always when talking with your kids, it's important to openly explain your feelings about the situation and to encourage them to express their feelings in return.
It may be difficult for the very young to comprehend the mechanics of finance --they're still learning how to count after all! On the other hand, unlike older children and teens, they haven't become as used to getting whatever they want either, so will adapt quicker to leaner times.
With the teens, it's important to not talk down to them and, again, to discuss openly their feelings and thoughts on the situation -- perhaps even asking for their ideas and help in planning a financial strategy. In the end, they'll appreciate being treated openly and having that level of involvement within the family.