Q. Money wasn’t a problem for us before. In fact, my kids have enjoyed luxuries in life. But now, things aren’t so good financially, since we closed down the cloth factory that we were managing. We’re not starving, but we can’t afford the things that we were used to before. How do I tell my kids? I don’t want them to feel sorry for themselves and to burden them with our problems, but they keep asking for things that we cannot afford now. Please advice.
 
Please help!
Catherine Baquiron

Your story is not new.  There are many families who are going through the same trials as you because of the reversal of the economy all over the world.  Your kids will definitely not be alone in their situation.  In fact, when you tell them, and if they share with their friends, they will probably realize that they have a peer group that will help them through because they are all in the same boat.  Of course, this is assuming that your kids do not belong to a group of super-rich kids whose parents do not even work for a living.  Such kids probably do not understand the value of work and money.

Yes, definitely, your kids should be involved in understanding what has happened to you.  But, you need to first talk to your husband and agree on:

• How much your kids are capable of understanding.  This depends on both their age and their emotional maturity. 

• How much you would like them to know at this point.  Choose the most urgent issues.  There is no use in getting them all insecure and stressed.  Just make sure they understand the sacrifices all of you have to make.

• The common style you will use in telling them.  One way is for both you and your husband to start, by showing them very clearly that you have changed your personal spending habits.  Every opportunity you get, express how you are cutting down on something that you really want for yourself.  After this lifestyle cut-back becomes the norm, so that the kids are obviously aware of the difference, it may be time to sit down with them and tell them the story about why they might have noticed how different you have become.

• Impress on your children that your main concern is what lifestyle can be sustained without incurring unnecessary debt; that what is important is not to trade the future with the present.

Express the positive in everything like how your family should count your blessings; like how many more kids and families do not have the same things that you are still enjoying.  You and your husband must be in complete agreement beforehand so your kids do not end up confused with conflicting statements from the two of you.  For example, understand exactly what you can no longer afford.  If you believe your family should not eat out and your husband feels differently, agree on what your common stand should be.  Perhaps, it could be that eating out should only be during birthdays and only in a low-cost food restaurant that you both agree on.

To reach a good agreement on what you can tell them, you should have a common understanding of your finances.  Make sure you agree on your Statement of Assets and Liabilities (SAL) and Personal Income and Expense Statement (PIES) and your budget. Since you had a business, this should not be difficult for you.