Released April 24, 2009

SEARCY, Ark. - Parents should convey calm, honesty, and open-mindedness when discussing the nation’s economy with their kids, says Katie Cobb, White County Extension agent with the University of Arkansas Division of Agriculture.

Tales of the nation’s economic woes make it back to children’s ears, even if they don’t fully understand it. Families are being more careful with finances - kids are hearing "no" more often, says Cobb. Curious children will have questions.

Answer them by being honest, age-appropriate, and assuring, says Cobb.

Be aware of children’s needs during these conversations. For example, be honest but don’t overwhelm them. Beware of statements that incite fear - using a calm tone of voice can help, says Cobb.

"Tell your children if you are losing a house or a job," she says. "Share your plans and let them know what to expect."

Above all, remind children that they will be safe and secure.

Children likely won’t understand complex economic explanations. Tailor conversations in age-appropriate ways, says Cobb.

"Children don’t have the ability to set some challenges in perspective," she says. "They may become anxious and confused." Monitor their exposure to media, especially for younger children.

Adolescents and young adults are more complex, and better understand the realities of the situation. They may want details. Be prepared to answer these questions, says Cobb. Brush up on economic and financial news, if necessary. It’s important to keep kids in the family’s economic loop.

Teens may express bold opinions about national affairs, but don’t be in too big a hurry to argue with them, says Cobb.

"Teens need the chance to talk through their ideas," she says. Listen patiently. Work with them to find additional information. "Remember that older children and teens need reassurance too," says Cobb.

The economic crisis offers a unique opportunity to grasp the teachable moment.

"The best protection for financial security, in good times and bad, is to practice recommended financial management skills," says Cobb. By setting financial goals - living within family income, protecting assets and spending carefully - parents can teach other family members about the difference between needs and wants.

Distinguishing between needs and wants helps children better understand the family’s financial situation, says Cobb. When a child asks to buy something, for example, discuss whether the item is a need or a want. Explain that during the economic slowdown, the family is spending less on wants.

Perhaps the most important thing children need is security.

"Let them know that the economy shifts, falls and rises every few years," says Cobb. This will help children understand how the economy works. "Our country has survived many instances of economic downturn," says Cobb. "Tell and show your children that families stick together through difficult times."

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http://www.uaex.edu/news/april2009/0424money_kids.htm

Contact: Elizabeth Fortune, (501) 671-2120, efortune@uaex.edu