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How is the economic crisis affecting your family?

Oct17

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Henry’s been listening to NPR, again. “What’s happening with the economy?” he asks. Then: “What’s an economy?”
I can’t imagine how to explain these concepts to my six-year-old. What is happening? What will it mean to him? Before I can explain or attempt to explain, Henry has a more pressing question: “Will you be able to buy me Legos?”
The answer, for now, is yes, we will be able to keep Henry as Lego-ified as he needs to be (within reason, of course). Our jobs, such as they are, are still around; we didn’t have any serious investments because we don’t have enough to seriously invest; as long as we don’t look at our retirement accounts we can sleep at night. We are keenly aware, however, that the Era of Bountiful Legos may soon be at an end. Who knows what looms on the horizon? Who can say what the continuing financial collapse might bring? Does anyone have a paper bag I can breathe into?
Pardon me. I’m okay now. Just had a moment, there.
Needless to say, there are countless people whose lives have been rocked by this economic free-fall, and their children aren’t immune from that stress. But for kids, learning to live with less may not be all bad. This Sunday’s New York Times featured a story about teens dealing with new limits on their spending, at the very least, and real threats to their family’s livelihood, at the most. These teens are used to being indulged, and having their wants as well as their needs met without question. The story quotes a study which found that nearly 75 percent of parents give in to their children’s nagging for new video games. Middle-class and affluent parents give in to their children’s demands, no matter how much the experts lecture that learning to endure the occasional “no” is a valuable lesson that children miss out on when they are given everything their hearts desire. So now that getting everything is no longer possible, and parents have to set stricter limits, might we be ushering in a new era of saner parenting?
It all depends on what happens next. If we are seeing the beginning of a true depression, much about our lifestyles will undergo a radical change. And of course that’s going to affect our children. As one of my friends observed, our kids might grow up to be frugal Depression-era types, the kind of people who save string and re-use tea bags. And really, that’s not the worst thing to be.
Even if the economy does (please oh please) recover quickly and painlessly, this scare has caused us all to take a long, hard look at what we’re teaching our kids about money. Our own Mir Kamin, revered blogger and creator of WantNot.net, was recently interviewed for a story on the economy and its effect on families. “The way you raise fiscally responsible children is by not making money this thing that’s shrouded in mystery,” she is quoted as saying. “If more people did that with their kids, we wouldn’t be in the mess we’re in now.”
So: how do you teach your kids about money? For us, we’ve begun by showing Henry how unbelievably expensive Legos are, and helping him figure out ways to save up enough to buy his own. It’s not much, but it’s a start. And you? How have you been affected by the financial crisis? What do you think is going to happen down the line? Do you need to borrow my paper bag?


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Isabel Kallman

http://www.alphamom.com
Isabel Kallman is the founding mom of Alphamom.com.

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10 Responses to “How is the economic crisis affecting your family?”

  1. Dana Oct 17 at 9:31 am Reply Reply

    Pass the paper bag please. My husband and I are both employed in the land development/construction fields…and in Florida, that means that we’ve both got a cardboard box under our desks waiting for the day that we are told we’ve been laid off.
    While we didn’t buy more house than we could afford…all the other rising costs are making that mortgage harder and harder to scrape together every month…and the simple knowledge that we can’t sell our house for what we paid is suffocating.
    I was lucky to have a mother who was raised by a Depression Era Houdini who would sew up clothes with that saved string and turn those used tea bags into a fabulous treat…and a lot of those frugal habits got passed along to me…but we feel like we’ve cut and cut and cut…and there is nothing left to squeeze anything out of.
    My mom taught me a valuable lesson when I was a teenager and had a serious case of the gotta-have-its. She gave me her entire paycheck for a month in cash and told me that I could do whatever I wanted with the money…after I paid all the bills, did the grocery shopping, and took care of all the other things that I didn’t even know existed outside of my teenage world. With some coaching…I ended up with 38 cents at the end of the month. 38 cents! That type of honesty about money is hard to come by…but that lesson stayed with me…and I managed to keep my gotta-have-its under control.
    I plan on teaching the same lesson to my child as soon as she’s old enough…and I won’t be afraid to say “no” along the way.

  2. suburbancorrespondent Oct 17 at 12:55 pm Reply Reply

    I think all these “problems” you raise about teaching kids about money, etc., are simply a result of affluence. In fact, a lot of parenting “problems” stem from affluence: kids who will only eat particular items, kids who have to be bribed to do chores, over-scheduled kids – these are all issues that only come up when parents have money to burn, believe me. You can’t overschedule a kid if you can’t afford those ballet lessons. A kid can’t insist on eating only hotdogs if you can’t afford to waste your nutrition dollars on them. And a family that can’t afford a weekly housekeeper is not likely to pay their kids to do the same jobs, but less well.
    In other words, those of us who have always had to say “No” to our children do not have any difficulty in teaching them the value of a dollar. Our children see us making difficult economic choices every single day. And I think that is a good thing!

  3. Cobwebs Oct 17 at 1:21 pm Reply Reply

    My son is only four, so right now we’re sticking to fairly broad concepts where money management is concerned: We explain that some things are expensive, and help him understand how to save up for something he wants. We also don’t buy him everything he asks for, and we’re trying to teach him a healthy skepticism about advertising claims.
    When he gets a little older, though, I want to try something I read in a parenting magazine: The First Bank of Mom. The idea is that the child’s allowance is kept in a “bank account,” and the child writes checks (an old book of checks from a closed bank account) when he wants to withdraw money. It might give kids a more concrete idea of how bank accounts work, and help them better understand how to keep track of their money.

  4. Becky Oct 17 at 2:38 pm Reply Reply

    I grew up with frugal parents, and have been quite frugal myself, in the past. I’m still not spendy, but my slightly less restrained husband has taught me a bit about having fun with money (for better or worse, I’m not sure). I DON’T buy my kids whatever they want, and I DO try to explain the value of a dollar. It’s tough, though, when we are affluent enough to get most of our wants and all of our needs and still be saving for our future and our kids. Trying to explain why we can’t buy that $2 toy, but Mama has a new iMac is rather complicated.
    How do you teach your kids old school frugality when you earn enough that you don’t have to employ them in your daily life? Cause lemme tell you, it’s gonna be a shock when they go out in the world on their own dime and realize they can’t afford the lifestyle to which we accustomed them. But does that mean I have to live like we’re poor to prepare them?

  5. MamaCass Oct 17 at 9:20 pm Reply Reply

    I think most moms I know could use a paper bag. I picture the stories my grandmother tells me of her father being gone for days at a time, traveling to find work…and of her mother making peanut butter sandwiches for men who would stop and ask for food once in a while. It’s such a foreign idea so many years later. Could we really end up in that same situation…or what would the modern day version entail?
    I do not earn income at the moment, and my husband runs a landscaping company…something people tend to drop when money is tight. We have no idea how secure his job will be, as it mostly depends on how secure the economy is over the next six months. Obviously, this is not something we discuss with our young daughter, as she needs nothing less than to go to sleep at night wondering if her daddy will have a job. BUT, I have gotten much more vocal with her about how we might not buy something because it is expensive, and Daddy works very hard for the money we have to buy things like our groceries and winter coats. She’s too young to practice like Henry with saving money, but on some level, I think she gets it. I can teach her this without worrying her. Hard work means money, and money is hard to come by, and we have to appreciate all the things we accumulate, food and legos alike. She’s three. That’s what we’re working on.

  6. Mir Kamin
    Mir Oct 18 at 10:18 am Reply Reply

    Thanks for the shout-out! :)
    While this certainly isn’t the method I would’ve chosen to give folks a wake-up call to talk more with their kids about this stuff, hopefully it will give many a much-needed opportunity to revamp their approaches both to discussing these matters and setting good examples. We’ll see, I guess.

  7. RLJ Oct 19 at 11:32 am Reply Reply

    Pass the bag; we’re in Iceland. Two mid-range public sector jobs -and the shadow of the IMF which has never been known to give a damn about people’s lives.
    With a Scottish background, I just wanted to mention to suburbancorrespondent: poor nutrition comes out of poverty. If you’ve got to find 2000 calories a day, the cheapest way to do so is is deep fried and contains no vegetables. Fish and chips might not do much for the complexion but at least the kids go to bed feeling full. To give them the same sensation on vegetables is not possible on job seekers’ allowance (the UK unemployment benefit). The majority of poor families simply cannot feed their families with organic carrots. More poverty, means more ill-nourished kids.

  8. Laura Oct 19 at 12:48 pm Reply Reply

    Right after I read this post, I saw an article on Slate: Books to read your children during a financial crisis.
    The url is http://www.slate.com/id/2201710/
    To really teach your kids about personal finance, maybe check it out at the library!

  9. Jen @ Mommy Instincts Oct 20 at 6:58 am Reply Reply

    Well, my 19 month is far too young t ounderstand the value of a dollar, so teaching him something like that isn’t in the near future.
    The fact is, cutting back and cutting back is something we have been doing more of, and seriously, I don’t know how much more it is possible for us to cut back. Ever since the birth of our son, I stopped working full time and went down to part time. Well, the part-time isn’t cutting it, and i have had to add more hours and more shifts just for us to be able to diapre our son and put food on the table. Did I mention I am pregnant and due with our second little one in March of ’09? We are already hoping and praying for another boy (we find out tomorrow!), just because we know we have the clothes and boy-related items already. If we have a girl, I have no idea where we are going to get the money to stay a float.
    And while I am at work, it results in my mom and my husbands mom having to babysit. They have already told me that there is no way they are going to be able to babysit a toddle and newborn simultaneously as much as they have been watching the boy. Which means, I may need to get a night job, instead of my day job. And if I am breastfeeding, how will i do that?
    The stress is endless and seriously that is the first time i have typed out where we lie in this economic crisis. Until now, I think i have been avoiding it. I am officially even more depressed than i was before.
    Guess that’s why it’s called a depression right?
    Praying for a miracle,
    Jen

  10. Susan Oct 20 at 12:05 pm Reply Reply

    Growing up in a family of 6 and not much money I learned fast to not ask for what I couldn’t have. My husband grew up with lots of money, and got everything he asked for.
    We both work in fields that are dramatically affected by the economy; so much that my hours at work were cut in half and his commission income is about half right now also. It is a lot harder for my husband than it is for me that we can’t have the little extras that we could before. I do want to teach my son the value of a dollar but without being in the poverty level that my parents were in when raising us. But if I didn’t pay the bills and keep track of our money than my husband would have no problem spending his entire pay check on stuff he “want’s and doens’t need”. So, maybe the hard way is the only way to teach him. I really hope not.

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