Financial Distress? Focus on Family

"I don't want my kids to be stressed about our financial situation.  They're too young."  One mom said this to me at a recent event and because it has become such a common refrain, I felt that I needed to highlight a post I made about Sue Schellenbarger's WSJ article last September.  It's even more relevant today.  Many families are in serious financial distress and a common reaction to this is to shield the kids.  This is virtually impossible to do.  Your kids are going to feel your stress and if you don't explain to them what's going on, they'll make their own leaps.  

Talk to your kids about difficulties you might be having and assure them that you are working to make things alright.  Enlist them to help - they typically want to be involved.  Give them simple things to do (e.g. don't run the water while brushing teeth, turn lights off when you leave a room).  Use Ms. Schellenbarger's article as a guide for your conversations and, if you still don't believe that involving your kids is important, look at they study she cites about the importance of focusing on the family in times of distress.  Your problems are your family's problems.  Face them together as a family.

Money Mammals in Wall Street Journal!

My DVD, "The Money Mammals: Saving Money Is Fun," appeared in the Personal Journal section of The Wall Street Journal on Thursday.  Click here to check out the piece on "Toys to Teach Saving Savvy."  

Willa Plank writes about the DVD, "Teaching simple concepts such as money transactions, saving allowance money, and sharing in the form of gifts through catchy songs and funny dialogue, it isn't hard to see why our 5-year-old tester enjoyed it."  The article reviews other financial literacy products for kids, including The Money Savvy Pig, The Millionaire Kid$ Club books and Big Pay Day.  

It's great news for all of us involved in getting the word out that it's imperative to teach kids about money as early as possible.  

-John

The Thrift Shift?

I heard a very interesting story this Thursday on NPR's Morning Edition.  Linda Wertheimer chatted with the Wall Street Journal's David Wessell about the recent rebound in the savings rate from near zero to 5%.  

Click here for a link to audio and print

Click here for NPR's Savings Rate Tracker

I'm hopeful but skeptical that America's relatively sudden interest in saving will keep but I'm mostly curious to know what you think.  Once conditions improve economically, do you think Americans will go back to their spendthrift ways or do you think that the current crisis has or will radically alter American consumption and that we're entering an "Age of Frugality"?  In short, are we seeing a "Thrift Shift?"  Please comment.

-John

When Tough Times Affect the Kids

Read Sue Schellenbarger's article in the Wall Street Journal today. She has some terrific points about how we can talk to our kids about how the current financial crisis is affecting our families.

Here's a snippet:

"A 20-year study of 450 families with school-age children who were hit by a deep Farm Belt recession in the 1980s shows the psychological impact on kids can be signifcant and enduring. Rand Conger...at the University of California, Davis, and others, found financial woes often fueled anxiety, depression, behavior problems and poorer peer relationships in kids...The most successful families in Dr. Conger's study were those who 'managed to keep their priorities on the family itself,' remaining close and working together to solve problems, he says. To his surprise, kids didn't seem to mind that they lacked spending money."

-John