If you are worried about the uncertainty of a financial crisis, trust that your children might be also. Sensational news headlines may alarm kids and teens. Start a conversation to manage the reality of the global and local crisis. Here are some ideas for discussing the topic with your family.
1. Start a Conversation
When we are vulnerable it can be hard to share with our kids. Direct communication will reduce their fears and may quiet your worries. Start a conversation by understanding what they already know. Make sure to affirm their understanding of the situation. Ask about what they think it all means and what they are feeling. “Everyone can get a bit shaken when unexpected things happen”.
2. Facts, just the Facts
You may need to add more information to help your children understand the situation. When adding color to their knowledge, it is essential to stick to unemotional facts. Prepare for your talk by reading some journalists you trust. Paraphrase their words if your own fail you. “According to a reporter that I read often, the number of adults without jobs will be high for a while but those families will receive assistance from a various government and neighborhood programs to help with food and income”.
It may help to demonstrate you have a plan for your family. No need to go deep on details, just broad and confident strokes. “We will be fine in the short term if we make some quick spending reductions. We will eliminate x, y and z which will allow us to maintain a, b and c. It may be helpful to point out existing resources that illustrate financial forethought. “I am glad we selected a vehicle with better gas mileage. That will really help us to keep fuel costs low”
3. Share some history
Financial crises happen but they are still rare events according to research done by the San Francisco Federal Reserve. In the March 2019 FRBSF Economic Letter, “[f]inancial crises are characterized by a sudden and widespread decline in asset values, a sharp deviation from normal financial market functioning, and a sever tightening of credit that leads to a contraction in economic activity”[1] . On average, a crisis happens every 25 years or even less. But, the research indicates that recessions can occur about every eight years.
4. Let them help
Empower your kids by allowing them to help. Kids may wish to make a sacrifice for the good of the family. Pick a few decisions where they can provide input. “If we had to choose between Netflix and Amazon Prime, which would you prefer and why”?
Kids also like the thrill of an ongoing problem to solve – like a challenge. Perhaps you can create an energy challenge to see if you can reduce energy expenses by 5% in a month. Or a trash challenge to see if you can reduce the frequency and expense of trash collection.
5. End with hope
End the conversation on a hopeful note. Crisis, like any change, can provide a great opportunity. Advances typically follow a crisis to address shortcomings identified during the crisis. Discuss what the world, the country, the family can do differently to prepare for next time.
[1] Paul, Pascal. “Modeling Financial Crises.” Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, 4 Mar. 2019, www.frbsf.org/economic-research/publications/economic-letter/2019/march/modeling-financial-crises/.
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