Dealing With Financial Turmoil
The tanking economy, credit crunch, housing crisis, and
rising unemployment rate of 2008 have put money (or, rather, the
lack of it) at the very top of parents' minds, especially as
we enter a new year, a new recession, and a new
In 2008 an already slow economy practically came to a screeching
halt. Seemingly reliable corporate giants and age-old banks
collapsed or asked for government rescues to the tune of hundreds
of billions of dollars. As the stock market struggled to stay
afloat, one major company after another begged for lifelines.
Automakers teetered as banks and credit card companies cut back on
credit lines, making it tough even for people with good credit to
get a car. Companies doled out pink slips in droves, and the worst
unemployment rate in decades showed no signs of letting up. House
prices plunged and more families faced foreclosure on their
No doubt, the economy will continue to take center stage
throughout 2009, as families tighten their purse strings further
and brace themselves for even more economic setbacks. Even the
basics - rent/mortgage, gas, groceries, heating oil, child care,
health care - may become a difficult burden for usually financially
What to Watch:
As countries continue to reel from a global recession, more and
more children here and abroad will go hungry or face homelessness.
Many families on the brink will resort to buying unhealthy, cheaper
foods and put once-routine checkups, medications, and immunizations
on the backburner. And less money for charitable giving could mean
scarcer resources for those newly in distress. There may be fewer
dollars for scientific research and the fight against threats such
as measles, tuberculosis, malaria, hunger, and AIDS worldwide.
The fragile economy may get worse before it gets better. Now,
it's essential for many (if not most) households to learn how
to live with less - and do it within their means, instead of
falling back on credit or loans.
Parents have an additional challenge: helping their children
through these difficult times. Even if they don't always say
so, kids are very aware of the tension felt by their parents. As
with many things, the best approach is for parents to talk to kids
about what's going on and how their family will cope. Kids may
not be interested in the global economy, but they are interested in
what is happening to them and their family.
It's OK to say "no," set limits, and tell them
that there's a limited amount of money in the family budget.
Honesty is key but too many details might be too upsetting,
especially for younger children. If nothing else, our collective
money crunch is a prime opportunity to teach kids of all ages
important lessons about separating "wants" from
"needs," delaying gratification, and earning the things
they truly want. After all, food, heat, and a roof over their heads
come before toys, "in" clothes, or a teen's new
Family Money Troubles
Financial Management During Crisis
Financial Woes? How to Talk to Kids When Money's Tight
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Note: All information is for educational purposes only. For specific medical advice,
diagnoses, and treatment, consult your doctor.
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