Teens and the Economic Downturn
The financial news is terrifying and conjures up old stories we heard from grandparents about the crash of October, 1929. Now, 79 years later, the solid base of our economy seems in jeopardy and many are calling this downturn an “apocalypse.”
Teens, who tend to seem involved in their own small worlds, are not oblivious to what’s going on. Even if they seem disaffected, there’s a good chance your kids are every bit as worried as you are. But this situation opens the opportunity for great family pow-wows on the topic of money, capitalism, material possessions, and basic everyday safety and security.
Money analysts explain that everything goes in cycles, but it’s hard for teens not to focus on the immediate effects of a loss of income and tightened belts. Kids want to know, “are we okay?” And if we’re not, when and how will we get there? They may have noticed school or community cut-backs or heard about friends whose parents are unemployed or who have lost their homes. Parents can seize this opportunity to show their kids that they actually can live on less; that money isn’t everything; and that bad times will eventually give way to better times.
Carrie Schwab Pomeranz, chief strategist of consumer education at Charles Schwab & Co., Inc. urges parents not to be shy when they approach the taboo subject of money with their kids. From early ages, and certainly during adolescence, it’s vital to teach money skills such as learning to save and budget, to balance a checkbook, or use a credit card wisely. Take a look at Schwab’s recent survey on parents and money .
Here are a few good tips for hard times:
Be completely honest about your family’s financial situation. This is especially true if one or both parents are directly affected by the current Wall Street downturn. Reassure your teens that you will figure out ways to weather this storm.
Lay out new budgets for everyone in the family. This may include driving less to save on gas; eating out or going to movies less frequently; reducing clothing purchases and postponing or downsizing vacations. Prioritize what is needed most and explain your decisions.
A part-time job will make your teen feel like a contributing member of the family ecostructure. If he or she isn’t earning right now, you might want to brainstorm about starting a dog-walking or lawn-mowing service, or perhaps an online business. (See Online Entrepreneurs.) Allow your teenagers to contribute a percentage to the household budget and keep a portion for their own use.
Plan inexpensive family activities like picnics or special game nights at regular intervals to keep everyone motivated. The main goal is to keep teenagers knowledgeable as to the effects of the economic downturn without imposing guilt or blame.
See timely resources on teens and the economic downturn.