A lot of U.S. families are having “financial woes” these days. House prices are going down …more families are facing foreclosure on their mortgages …energy prices and grocery bills are all going up ...and uncertainty over when things will take a turn for the better is making everyone tighten-up their spending.
So how do moms and dads explain this “money crunch” to their fashion-conscious middle-school children as well as their teens with dreams of out-of-state college or a new car? Here are some tips that may help:
1. Be honest with your kids — but don't tell them more than they need to know. Avoid overloading older children with too many details or worries that might scare them. Stick to brief explanations and be clear about changes made to the family budget.
2. Encouraging children to find creative ways to save or make money not only helps them feel empowered — it helps them feel like they're doing their part to help out.
3. Even young children are “brand- and consumer-aware” these days, so don't expect them to volunteer to scale back on their treats or activities right away – but, if you want to encourage budgeting behavior, offer incentives to get children on board.
4. Explain the new rules and also new opportunities for earning privileges and treats. Make it fun. Challenge children to come up with family-friendly, cost-effective activities that everyone will enjoy.
5. Explore fun, low-cost activities. Challenge your family to create memories without visiting a mall or a store. Some ideas include:
- bike riding together
- free movie nights
- going to a park
- library events
- museums and other local art
- sporting events
- visiting yard sales
6. Family meetings are a great way to establish these new “spending rules,” even if they're temporary until family finances are in better shape.
7. Get children involved. Do children get an allowance they can save up? Can they earn money or points toward back-to-school items? Older children might look into helping pay for college by saving money or applying for scholarships, loans, or grants.
8. When money is tight, tell your youngster that you cannot buy new toys right now, but perhaps the toys can be put on a wish list for the next birthday, Christmas, Hanukkah, or other gift-giving occasion.
9. If you can afford something that your youngster wants, offer a small reward in exchange for good behavior or keeping the bedroom straight. Short-term rewards, such as stickers or tokens, can keep younger children motivated. Financial incentives can help older children earn money toward their goals while teaching them valuable lessons about saving.
10. It's hard to keep your cool when you're working hard to keep the family afloat, or stressed out because the bank has threatened foreclosure. Take a deep breath and stay calm. If necessary, tell your youngster that you'll talk about it later, then be sure to set aside time to do so.
11. Children may not be interested in the global economy or why money is tight, but they can be told that there is a limited amount of money in the family budget. Do not cave into their every whim, and instead encourage children to plan ahead for new purchases.
12. Knowing what you want to say, what changes will be made, and how those changes will affect each youngster can help make this a little easier.
13. Learn to say "no." Sometimes moms and dads say "yes" to their children before figuring out how they'll afford a new expense. Even if you agreed to something, you can explain that you made a mistake, and — in order to be a financially responsible family — everyone must forego certain treats for a while.
14. Manage stress levels. Get support — yours is not the only family going through hard times. Try joining a support group or other social network in your area. Support groups are offered through local hospitals, churches, synagogues, libraries, and schools. If you feel that stress or anxiety is really starting to take its toll, tell your doctor, who may be able to put you in touch with counselors or suggest therapeutic strategies — such as relaxation techniques, exercise, or yoga — that can help you feel better and learn to manage your stress.
15. Once you've had "the talk" about money matters with your children, keep a list posted — perhaps on the refrigerator door — of the new house rules so that everyone knows what is expected of them.
16. Preteens are old enough to save money from a weekly allowance or earn it by doing chores around the house, raking leaves, or shoveling snow around the neighborhood.
17. Remind yourself that it's OK to reject pleas and set limits. You're not depriving your kids — you're teaching them important lessons about delaying gratification, earning treats and rewards, and about family finances. After all, food and rent come before toys.
18. Through part-time jobs or regular babysitting, teens can earn money outside the home and cover many of their own expenses.
19. When talking to your children, let them know that they're not alone in their desires. Say how you feel when you see something that you want, but can't purchase it right away. Explain that everyone in the family has to cut down on spending — including you — and remind them that, if they're really motivated, there are ways to earn money and work toward the things they truly want.
20. There are a lot of fun things to do that don’t cost a dime (or no more than a few bucks). Here are some ideas for “family fun” on a budget:
• Bake bread
• Bake cookies or a cake
• Cook an ethnic dinner
• Do soap carving
• Go and visit grandparents
• Go bike riding together
• Go bowling
• Go camping
• Go fishing
• Go swimming
• Go to a movie together
• Go to the library
• Go wading in a creek
• Go window-shopping
• Have a bonfire
• Have a family meeting to discuss whatever
• Have a family picnic in the park. Let the kids help prepare the food -- make sandwiches, pack an ice chest, make cookies for dessert
• Have a late evening cookout
• Have a neighborhood barbeque
• Have a water balloon fight in the backyard
• Learn a new game
• Make candles
• Make caramel corn
• Make homemade ice cream
• Plan a vacation
• Plant a tree
• Play basketball
• Play cards
• Play Frisbee
• Put a puzzle together
• Roast marshmallows
• Share feelings
• Sit on the porch in lawn chairs and watch people and cars go by
• Take a hike through a state park
• Take a walk through the woods
• Take a walk through your neighborhood. Say hello to everyone you meet, whether you know them or not
• Take advantage of entertainment the schools have to offer (e.g., band concerts, school plays)
• Take family pictures
• Take flowers to a friend
• Try a walk in the rain
• Try stargazing
• Visit a college campus
• Visit a museum
• Visit a relative
• Visit different parks in town
• Visit the fire station
• Visit the neighbors
• Watch a television show together
• Work on a family scrapbook
• Write letters to friends
My Out-of-Control Teen: Help for Parents