M. Gary Neuman explains how to talk to your children about money during a recession.
Economic problems can be a life-changing moment for children, and fighting about money in front of your children can influence how they view money and family for the rest of their lives. Worrying about financial security isn't your child's job, it's yours.

It's also your responsibility to teach them the true meaning of family. When your children are older, they're going to look back at the tough economic times you faced and either say, "That was a time our family completely fell apart," or "My parents, they showed us what real family is all about." They will carry that message for the rest of their lives.

Instead of fighting with one another, join forces and fight together against the world—your kids are depending on it. By doing so, you're going to set them up for success their entire lives. Sit down with your children and start a conversation. If you can reassure them, they will not be traumatized. When they know that you're in charge, they will be calm. It's your job to make that happen.

Use this script to have a money talk with your kids.

Step 1: Start with Reassurance

Primarily, you want to remember that children are calmed when they sense their parents taking control of a situation. This doesn't mean the parent has to have the answers but rather that parents are working together to care for the family. Of course the details of what you would say to your child will change as it relates to your life situation:

As you might already know, there have been a lot of changes in our world regarding money. This means that a lot of people are making changes in the way they spend money in order to make sure they have enough money for those things that are really needed. We are going to be making some changes in our family because we want to make sure the best way we can that we have money for the things that are most important to us. Our world has gone through some hard times before and one good thing that happens is that we really learn what it means to be a family. Spending money is never what makes us happy. It's the love we have in the family that makes us special and we're going to make sure that we always put a lot of time and energy into that.

Take a second to outline a simple plan and ask for your kids' input. Here's what you can say:

Here are some of the money changes that will be happening...

Here are some of the things we'll continue to have money for...

Here are some of my ideas about how we can have fun and nice family time while we're making these changes...

Do you have some ideas about how we can do the same?

Be sure to allow your child to ask questions, voice her concerns and share her feelings and thoughts. You can say something like: 

I understand that this could be kind of scary/sad/confusing for you but that's why we're discussing this. We want to make sure you know that we're on top of this even though we're not exactly sure of everything regarding our money, but we are absolutely sure regarding our love and being together as a family.

Need help starting a money conversation with your spouse?  Get Gary's script and start talking.


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