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Question: I lost my job and we have had to make drastic cuts to our family’s standard of living, which have significantly affected my children. I worry I am not providing the things they need and are used to having. How much should I involve them in our financial situation?

Answer: The first thing you and your children need to know is that you are not alone. Today’s economic crisis has affected almost every family. While this situation is painful, there are ways to minimize the pain and still adequately provide for your children.

Children’s Basic Needs 
In our quest to provide our children with the things they need, or think they need, we often overlook that one of the most basic needs of every child is the need for security. Security for a child means feeling his/her parents are able to provide him/her with everything he/she needs. It also means knowing the parents have firm limits and are able to say “no.” Our challenge as parents is to say “no” in a way that will promote feelings of security, not deprivation.

Children of rich parents don’t necessarily feel more secure than children of poor parents; security is a byproduct of proper education and emotional health, not money. You do not have to spend more than you can afford in order to give them a feeling of security.
How do you foster feelings of security on a shoestring budget? 
By creating a happy, relaxed home environment and projecting the feeling that you are genuinely satisfied with what you have, even if it is less than you are accustomed to. By seeing to it that your children’s physical, emotional and spiritual needs are being met. By ensuring your children fit in with their peer group and are not noticeably disadvantaged.

Needs can be met creatively in ways that cost little or nothing. Love and attention are free and are a far better alternative to prizes, toys and treats. A family picnic or an outing to a local park can provide more fun and memories than an expensive vacation or hotel stay. Food, clothing and housing have a broad range of what is considered normal, and as long as your children meet the minimum standard that is acceptable in your society and their peer group, you are doing fine.
Should The Kids Pay?
If you can afford to pay for the things your children need, then you should be the one to pay. When children see that their parents are happy to buy them what they need, it contributes to their feeling of security. It also reinforces feelings of dependence on their parents, which bolsters parental control and authority.

If a child has his or her own money, he or she can save it or use it to pay for extras. Children feel much more deprived when they sense their parents don’t understand or respect their needs than when they realize their parents want to provide but are unable.
Involving Children In The Family Finances
Being open with your children about your finances does not mean they have to know every detail of what is happening. The fewer details, the better.

In general, the only time children should be made aware of what is happening with their parents’ finances is when there is a change in the family’s lifestyle that will affect them directly. For instance, if a child’s summer camp is going to be canceled for financial reasons, the child deserves a brief explanation of why this is happening — but only as much information as he can comfortably digest.

Children tend to become very anxious when they see their parents are suffering, and your job is to explain the situation to them in a way that is both truthful and reassuring.

When explaining the situation, show empathy for the difficulty the children may experience as a result, but do not pity them. If you empathize while focusing on the positive and projecting an
attitude of acceptance, you will impart to your children valuable coping strategies for this and other challenges they will face in life.

This new column is penned by Mesila financial planning and counseling experts, Email questions to

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