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Lost Your Job? How to Help Your Kids Cope
Posted on July 19, 2012 by David Pelovitz

Unemployment can send family finances into a tailspin. But dealing with kids and money can be the hardest part. Here’s how to make it easier.

 

When a breadwinner loses a job, a family’s financial picture can get fuzzy, fast. Kids and money suddenly becomes tricky terrain. But a more cost-conscious reality doesn’t need to be all-bad. Shaking up how kids perceive money, budgets and family time can be a fortuitous life lesson—it might even offer some unexpected “silver linings.” Here’s how two families are making the best of a bad situation.

 

Before the economic downturn forced the Cook’s flower shop into bankruptcy, life was sweet. There were expensive cars in the driveway, vacations to Belize, Neiman Marcus shopping excursions and high-end electronics filled their newly renovated house in a tony suburb. After the bankruptcy, there was panic. The cars were sold, the house put on the market, the dinners and shopping stopped cold. “I spent many nights crying and worrying. I felt like we were being sucked into a financial black hole,” says Mary, the mom of two tween-age children. “My kids were used to getting everything—now I had to say ‘no’ when they asked for anything.”

 

David Pelovitz also knows what long-term unemployment can do to a family. After ten years teaching high school English, the private school where he worked reduced faculty by about 10 percent, and his position was eliminated. Losing a job he loved was hard; explaining it to his 9- and 11-year old daughters was even harder. But in the end, like the Cook family, some positive changes were made that David plans on keeping even after he lands a new teaching job. Read on to learn how they’re helping their children understand the realities of unemployment.

 

You can handle the truth

 

“From the beginning, I decided to be honest and reasonable,” says David. He didn’t sugarcoat the truth about his job loss, but he didn’t pull a ‘Scared Straight’ speech on them either. “I don’t like to say no to a reasonable request from my child,” says David, “but it is simpler for everyone if they understand why it won’t always be yes.”

 

As a parent out of work, you’re thinking food, shelter, healthcare. But your kids are thinking birthday parties, video games, Disney cruise. Life’s necessities are different when you don’t have the weight of a mortgage hanging over you, so it’s easy to snap when your kid is having a meltdown because the family vacation has been cancelled. “If you say ‘well it’s a cruise or food for the rest of the year’ your kid is going to opt for the cruise,” says David. “But if you tell her the vacation would mean having to skip all school field trips, after-school clubs and swimming lessons, it becomes more real to a child,” David explains.

 

A family that saves together, plays together

 

“Before all this happened, I bought my kids things without a second thought,” says Mary. “And I’d find $100 jeans rolled up in a ball in the corner of the basement.” Now, however, her children are earning extra money for the things they covet. “When your kid is babysitting for two months to get those $100 jeans, suddenly he values it.”

 

Now that her children better understand the value of things, Mary tries to build camaraderie by saving for something as a family. “We have a big change jar in the kitchen and we all contribute. When it’s full we spill it out, count it and hold a contest to see who gets to decide how we spend it. The only rule is that it has to be something the entire family benefits from, like a new video game we can all play together or dinner out at our favorite pizza place.”

 

Tomorrow does come

 

When a family is struggling to get through the next six months, it’s difficult to chase long-term goals. To children, who are not long-term thinkers, planning for anything beyond next week can seem ridiculous.  But long-term financial strategies are still critical. “The simple truth is that my family has only survived our long-term unemployment because we planned reasonably,” says David.  “We had a mortgage we could handle, had no credit card debt and were nearly paid off on our cars. Like most parents, we want to save for the future while surviving the present.”

 

But tell your daughter that you’re thinking about her college costs 10 years from now, not the birthday party that’s a month away and she’ll look at you like you’ve lost it. “The key is establishing a relationship they can understand,” says David. “Here’s an example: My daughters have learned how to save their allowance for something big they might want.  But they also know that buying something smaller immediately can set them back.” This can help them understand why this year’s party needs to be scaled down.

 

Finding the big scores

 

Even when Mary wasn’t worried about paying her credit card bill, she, like many consummate shoppers, delighted in a deal. “Getting a bargain gives you a certain high,” she laughs. Now she and the kids are learning to bargain hunt together. Discounted day trips, complimentary town programs, a free ice-cream cone coupon—these things feel like a real score instead of forced frugality.

 

“My family has found our community has a number of resources that allow discounted fees (and sometimes complete waiving of fees) for township programs,” David echoes. “Relying on these programs has allowed us to send our daughters to many day camps with activities they enjoy, and they are already looking through a packet of other possibilities.”

 

In the Cook house, the kids have learned all sorts of lessons—financial planning, the value of a dollar, living within one’s means. But the most surprising enlightenment may belong to Mary and her husband. He’s back to work in an unrelated industry but she’s not looking for the 100-plus hour workweeks they put in at the flower shop. Instead, she’s spending her newfound currency: Time. “I’m there for them much more now,” she says. “And if my kids had to pick “things” or “time with mom,” they’d choose me.”