Talking to Kids About the Economy

How to talk to your children about economic fears

By Diane Suchetka

The stock market is killing us.

We'll never be able to send the kids to college now.

If things get any worse, we'll be living on the streets.

They're throwaway lines a lot of us have been tossing around lately due to the crumbling economy. We shrug them off, or try to, with a laugh.

But our kids aren't laughing with us. They may be worried.

And if we can change our behavior, just a bit, we can save them from unnecessary stress that can disrupt their appetite, their sleep, their ability to connect with friends and teachers, to concentrate, to learn.

Start with two simple steps:

First, stop talking in doomsday terms. "Catastrophic language may make kids think they won't be living in a house next year when in reality they're just not going to go on vacation or you'll be driving instead of flying," says Dr. Nabil El-Ghoroury, a pediatric psychologist at Cleveland's MetroHealth Medical Center.

Then, have a talk with them. Explain the economic news on their level, so they know what's going on and how it will affect them, and answer whatever questions they have -- honestly.
As El-Ghoroury says: "Kids will come up with worse theories if you don't give them information."

Yes, we're stressed

Eight out of 10 Americans say the economy is a significant source of stress. That's up from 66 percent in April. Almost half of us say we're increasingly stressed about our ability to provide for our family's basic needs.

That's according to "Stress in America," a report released this month by the American Psychological Association.
The study also found:
• Women are more likely than men to say they're stressed about the economy.
• Nearly half of Americans say their stress level has increased in the past year.
• As many as 30 percent of us say our average stress level is extreme.

For details on stress, including warning signs and tips on how to manage it, go to Apa.org. If they're young, use simple, concrete terms. Explain, for example, that the family doesn't have as much money as it used to, and there will be fewer gifts during the holidays.
With older children, you can talk about concepts -- paper losses -- and how you regain those when the market recovers.

Even better, El-Ghoroury says, is using the bad news to teach.
You could cut your children's allowance a bit, from $10 to $8 a week for example, so they understand what it's like to live on less. Or insist that they save a portion of it, so they'll be ready for tough times and won't suffer as much as those who haven't saved.

David Palmiter, a clinical psychologist and professor of psychology at Marywood University in Scranton, Pa., offers a few other pointers.

Maintain family rituals, he says.

If Friday night is pizza night and you go to church on Sunday, keep doing that.
"That says to kids that their basic assumptions about the universe are still intact."

And Palmiter always suggests looking for opportunity in pain.

With less money, why not cut back on video games and spend more time laughing over board games or going for walks?

But the best way parents can protect their children from stress is by protecting themselves.
"If you manage your own anxiety," El-Ghoroury says, "that will help you help your kids."
And how do you do that?

Start by limiting your exposure to bad news, El-Ghoroury says.

"Turn off MSNBC. Limit the time you look at it," he says. "Just look at it once, when you're calm."

Then make a plan for change.

If you start to do something about your financial situation, you'll relieve stress -- at least some of it -- immediately.

"Start simply," El-Ghoroury says. "Cutting out your $4 morning Starbucks latte will save you $4 a day, $20 a week, $80 a month, $1,000 a year. Small changes can make an impact."
Add other stress relievers to that, and you'll feel even better.

The American Psychological Association suggests meditation, exercise and talking with family and friends. Make sure you eat right, get enough sleep and take time for yourself even if it's just to read a good book or listen to your favorite music.

Palmiter sums it up like this:
"It's an act of love, on the part of the parent, to be well."