Dealing with a Money Crisis

It is no secret that our country has been facing a major financial crisis for a number of years. However, even with unemployment and national debts at all-time highs, it is still shocking when your family faces a job loss or other financial setback. Most of us have experienced the emotional impact of money at some point in our lives. When adults are hit with a financial crisis, our children are impacted whether we realize it or not.

As a parent coming home after a job loss, the stress you carry will be apparent to the children. Kids are much more observant than we give them credit for - if you are upset, they usually can tell. It is difficult to decide what to tell your children about the household financial status. But open and honest communication is the key in helping your children cope and feel secure during hard financial times. By relieving stress in a positive way and keeping the whole family involved, financial issues can have a reduced impact on the family.

Some Techniques
Difficult times open a window of opportunity to educate your children about money, budgeting and the importance of saving. Here are some ideas:

• Explain the situation in a simplified way so your kids can understand.
• Keep conversations positive. Everyone will be nervous about the unknown, but keeping a positive attitude will help them avoid unnecessary stress.
• Construct a scaled back budget and walk your family through it so each person is on the same page. Keeping the whole family involved will promote a sense of unity so everyone can do their part. Perhaps even post the budget on the refrigerator and update it daily.
• Give children power in the budget. Give them choices about which activities are most important to them, making them feel they are contributing and that their opinion matters.
• Try to keep day to day routines similar to pre-crisis routines. You can still have Family Fun Night, but make it an at-home dinner and game night instead of dinner at a restaurant and a movie at the theater. Take time to brainstorm free activities to do together.

Unfortunately tough times are part of life, so it is important to involve your children so they understand why these changes are happening. If your children are older try these additional steps:

• Take advantage of this great learning experience to help them with future budgeting in their own lives by keeping them involved in the budget and creating their own cost-cutting suggestions.
• Consider allowing your older child or teen to watch as you pay the bills and balance your checkbook so they can learn first hand
• It can be fun to find deals and save money, so make savings a game! Have weekly competitions to see who can find the best price on groceries, movie tickets, or sports events.

Financial struggles are difficult on families, so instead of allowing this to be the cause of arguments, make it a time to bring the family closer by working together to get through the crisis.