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How is the economic crisis affecting your family?

By Isabel Kallman

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
About the Author

Isabel Kallman

Isabel Kallman is the founding mom of Alphamom.com.

Feel free to send nice emails to isabel[at]alphamom[dot]com.

...

Isabel Kallman is the founding mom of Alphamom.com.

Feel free to send nice emails to isabel[at]alphamom[dot]com.

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Dana
Guest

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… Read more »

suburbancorrespondent
Guest

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… Read more »

Cobwebs
Guest

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… Read more »

Becky
Guest

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,… Read more »

MamaCass
Guest

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… Read more »

Mir
Guest

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.

RLJ
Guest
RLJ

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… Read more »

Laura
Guest
Laura

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!

Jen @ Mommy Instincts
Guest

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… Read more »

Susan
Guest
Susan

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… Read more »