Kids, we need to have the money talk

I was visiting my best friend last month, babysitting her three boys, age 2, 4 and 6. It was Owen, the one in the middle, who gave me the scoop on the family's financial situation. "I saw Daddy cry in the bedroom," he said. "And he doesn't go to work anymore. It scares me."

Apparently, neither of his parents had told the kids that Daddy had been laid off, Mommy was dusting off her resume after six years of being a stay-at-home mom, and both of them were freaking out about expenses and savings accounts Are these things you talk about with your toddlers? I didn't know what to tell them, so I kept quiet. Regardless, the boys, even the two-year-old, knew something was up, and they were getting as stressed as their parents.

My friend told me she and her husband were trying to stay strong for the boys. That's when I sent my friend the link to a Bankrate story I just did about talking finances with your kids. Even financial experts who handle money on a regular basis have a hard time deciding on what information to tell their kids and what to keep mum on, but all the ones I interviewed agreed that it's no longer an option these days to spare your kids from the money talk.

Kids are smart, and they know something is up when you're no longer doing the pizza-and-ice-cream outing on Friday nights, or your answer to a toy ad during the Saturday cartoon is "We can't afford that." But there are ways to explain the current financial straits you're in without making them scared.

Of course, it depends on what age they are -- older kids will expect more details about what you can and can't afford -- but kids of all ages will want to help Mom and Dad out when they're down, and do what they can to cut costs. One good idea is to have a Family Money Night -- get a takeout pizza and a pint of ice cream to the dinner table while you talk about things like what credit-card charges to make and how to take a cheap vacation during Spring Break. A silver lining of having the tough talk about finances and layoffs -- your kids will be more likely to understand the values -- and limits -- of money, and remember them when they get older and handle their own finances.

I don't know if my friends talked to their boys about finances yet, but Owen, a Batman fanatic, told me he'll save up his own money for the Batmobile he's been wanting instead of asking Mommy to buy it. His birthday is next week, and instead of just buying the Batmobile, I'm planning to get him a piggybank. I think he'll actually enjoy having it.
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