Need help explaining my kids about money problems

[RainofGold]

My sister just bought a deli but before they open they need some extra money. Well they don't have any extra and her bank wont lend her any because they think is too risky. She tried to get a home equity loan but again her bank wasn't able to do it because her house lost value. So she is about to loose her store where she has invested almost $500,000 her life savings. she is also two months behind on her house payments and her husband is working just a few hours a day because they are very slow right now.

And her husband might loose his job because the company where he has worked for the last 22 years might close.

Well, I offered my sister and her family to come and stay with me if she ends up losing her house. My kids keep asking me why and how did this happened and if can happened to us, they are getting worried and nervous and they wonder if their dad looses his job what would happened to us.

How can I explain what's going on with the economy with out scaring them. One thing is to see it on TV and another when its happening to family members.

__________________

[taisama]

I would just tell them everything and explain what will most likely happen. Just say that their aunt's family may stay with you guys because they are having problems getting/starting jobs. Since it will most likely (and hopefully) be temporary, be sure to reasure them that things will be back to normal soon.

[mightynancy]

It would depend on the ages of the kids, and how savvy they are. If they are very young, I'd simplify to a great degree. Kids do not need to be burdened with adults' problems. Young children only need reassurance that their parents will take care of them.

If they are older, and in a position to help, I'd share more. By older I mean 12ish, depending on the child.

My husband faces a possible layoff, and if it happens, I'm putting a really positive spin on it for the kids. We could lose our house...then we'd have a "more efficient" condo or apartment. With less to clean, we'll have more time for fun! Wow, a playground, or a pool, in the complex! When I need to vent or commiserate, I'll talk to my grownup friends. The burden is NOT for the kids to carry. Complete honesty is completely overrated.

[nymormon]

I think the best way to handle this is to reassure your children that their father is not about to loose his job, and that you are all in a position to help others. Let them know that what is happening to their aunt and uncle is not happening to them. You don't have to go into how shaky the economy is right now, or why their aunt and uncle are having problems. Simplify your answers to their questions to just the basic information. You could say something like, "Your Aunt Sue's deli isn't doing as good as she had hoped, and she doesn't have the money to keep it going. Uncle Mike may loose his job. Without jobs, they can't afford to keep their house. We thought we'd help them out by asking them to come stay with us until they can get back on their feet." You don't have to go into detail about how all of this happened. Sometimes complete honesty is not necessary, or even appropriate.

[WANDERER]

I'd talk about how family helps each other out...when times are good we help others...Aunt Sue and Uncle Mike helped us or were very generous when *whatever*...and remember the times when others helped us i.e. made a birthday cake *simple examples/remember the happy times/open the discussion by associating with positive feelings*.

If you don't want to go into it...for the under 12s the simplest explanation is that they are moving house and looking for a new place to live and you're helping them out until the right place comes up...how exciting : ). Kids can be really blunt and the last thing they need to do is say something blunt and painful to the cousins or adults like "you're broke and we're helping keep you off the streets". The real lesson here is not the economy or family finance management. What the kids will remember is that you helped someone...and when they need help that you are a safe harbour and that you like helping and that helping feels good. Attitude before conceptual understanding. Laugh off little changes...oh I didn't think about that...what will we do to fix the problem...I know how about...teach them resilience and coping strategies. Use short term rewards and positives so that they stay feeling good and that they're coping levels are high enough to deal with little hiccups.

A positive spin is a good idea: how much fun it will be. Make sure that you reward them for adjusting to changes: sharing their stuff etc. as kids stress out when they can't predict things and changes are involved. Get them involved in preparing things so that they feel good about their contribution.

If you're not sure just be aware that...they may be disappointed after you prime them up for something that doesn't happen or be stressing quietly about changes and uncertainty. Kids generally cope okay on limited information. Over discussing things tends to up kids worry levels...adults tend to overdiscuss things to lower their worry levels.

Edited October 14, 2008 by WANDERER