Younger children are curious about almost everything, even if they don’t always have the words to express their questions.
When the stock market and economy force changes in a family’s spending patterns and imposes some limits that didn’t previously exist, it can cause anxiety.
Children, of any age, deserve the truth. Of course, conversations about losses in the stock market or the loss of a job should be age appropriate.
However, children are remarkable adaptable and resilient when they understand the problem. Kids are often willing to make sacrifices if they understand they are not being punished unfairly.
Younger children may have trouble understanding investments and the stock market (heck, who doesn’t?), but they will usually respond positively to a shared challenge.
They will often be more concerned about keeping the family together than anything else and need to be reassured in these important emotional areas.
Older children, who naturally tend to be more self-centered, may be concerned about how losses in the stock market or a loss of a job may affect them.
If the choice is to dip into the college fund or miss a house payment, most parents will do what is necessary to address the immediate financial situation.
It is never a good idea to raid long-term funds (college or retirement, for example) to solve immediate inconveniences or indulge the urge to buy some immediate gratification.
However, if you are facing foreclosure or some other horrendous loss, you need to make that your first priority.
Younger children often worship their parents and assume they can solve any problem. It is OK to admit concern on your part as long as it is buffered with ample reassurance that you are doing everything you can to get through a tough time.
It is difficult for many parents to deny their children things they want, however it can be a powerful lesson in restraint and making good choices for parents to honestly talk to their children when times are tough.
Honest conversation at all levels would go a long way to easing some of the concern when the economy and stock market are struggling.
