Stressed About Money? The Kids Might Be, Too

With nothing but dire financial news ruling the airwaves lately, you can be certain children have pricked up their ears. As hard times begin to hit home—and purse strings yank tighter—how much of your worries should you share with the kids? U.S. News asked David Palmiter, a Scranton, Pa., clinical psychologist expert in counseling children and families, for advice on how and when to discuss difficult topics with children—without upending their whole world. Excerpts:

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Is there any hiding financial stress from kids?
People have unhealthy ways of coping when they're under stress; smokers tend to smoke more; if they drink alcohol, they tend to drink more. If as a little kid, I'm sensing these kinds of changes, I may be wondering if something is wrong. And if there's no overt discussion about it, I may be assuming it's me that's causing the problem.

Younger kids still think magically, so if a kid hears one given news story about one person losing their house multiple times a day, to a younger kid, that's multiple events. After 9/11, we had kids thinking there were multiple planes crashing into multiple buildings, all over the place. So parents would probably want to provide some clarification.

What's the best way to share money worries with children?
The younger the kid or the more psychologically vulnerable the child, the more likely I am to share only what they need to know. The older they are, the more psychologically solid they are, I'm more inclined to share more with the idea that this is part of helping them to think about stress, to think about difficult times, and to cope well with them. It's good for kids through the course of development to learn gradually how to deal with pain. And we parent-lunatics—and I say lunatics because we love our kids so much that it makes us crazy—sometimes we don't want to see our kids suffer, so we deprive them of valuable opportunities to learn how to cope. Then, when they're on their own, they don't know how to do it. So many college freshmen come in and they don't know how to cope with significant stress. One of our tasks as parents is to gradually, bit by bit, enhance our kids' capacity to deal with these kinds of stressors.

Should parents lie about tough times they're experiencing?
It's very important that we not tell our kids things that we don't believe are true. We do that all the time with excellent intentions, but long run, that approach tends to damage the relationship and my credibility as a parent. So I only want to say things that are true but be selective. I refer to the term "selective truth-telling."

For instance, say a parent has lost his or her job and is going to lose the mortgage if he or she can't make a significant change in three months. That's the kind of detail that I probably wouldn't tell an 8-year-old—that the mortgage is in jeopardy. I would tell them about the job, because they're going to see Dad not coming and going, or someone else might let the kid in on that, or they might overhear something. It's like sex education. In the ideal, you want all the information coming from the parents. But a child is a bridge that's still being formed and cementing. How much weight he or she can handle and support changes from year to year. We don't want to take a big old caravan of heavy trucks across a bridge that's not fully formed if we can avoid it. If there are serious issues that would really stress or frighten a young child, I'm probably going to hold back until the point that they really have to know.

What about a teenager?
I might say to the teen, "This is the deal: I got laid off. I'm not quite sure what's going to happen. I'm a little worried about it, but I'm confident in my abilities and our abilities as a family. I want to be honest with you that I do feel a little worried and sad." It promotes closeness with the teen and says, "You're mature enough to handle this." And it's modeling how to cope with stressful times. I can't tell you the number of times when a kid has had some romantic attachment dump them, and they're really surprised to hear that it's happened to their parents. We're just not used to telling our kids about some of our vulnerabilities and failings. They really benefit from it.

What might signal that a child is worried about the family finances?
Sleep disturbances, appetite disturbances, concentration disturbances, nightmares, avoidance of situations or people are like the psychological equivalents of having a fever. So if the kid is given very stressful information and then starts to develop these symptoms, there's probably a connection.