NEW YORK — Greg Cramer was hoping the salary boost from his new job would make life a little easier for his family. But just a few months after starting work as a manufacturing plant manager last year, a major customer’s financing fell through, and he was laid off for the first time in his career.
The plant shut down for three months. Cramer then went back to work for about eight months, only to be laid off again. The Toledo, Ohio, dad might still be unemployed if he hadn’t decided to buy his own business, which links manufacturers and companies looking to get products made.
Do you tell the family?
At home, the employment roller coaster meant living on unemployment checks that provided about 80 percent less income than his paycheck. And there was no severance package. So the Cramer family had to pare back their already modest lifestyle.
At first, his daughters, Renae, now 16, and Emily, 13, were worried. Would they lose their house or have to move and give up their friends? Could they still plan to go to college?
"My wife and I explained to them we are frugal people, we have a savings account, we will survive this,” Cramer said. "We had some adjustments here and there about attitudes but continued to teach them that tough times fall on everyone.”
The experience brought to life a debate that parents throughout the country are having as the recession grinds on and unemployment becomes ever more common: Should you tell the kids that you lost your job? And should they be involved in making decisions about how the family spends money while they’re out of work?
Kids are ‘adaptable’
A lot of parents don’t want to burden their children with concerns they can’t do anything about, said Jerry Shapiro, a psychologist and professor of counseling psychology at Santa Clara University in California. But if the income loss means lifestyle changes, he said, it makes sense to include the kids.
That doesn’t mean involving them in trying to figure out how to pay the bills. But it does involve making sure they understand the reason for things like cutbacks to family vacation plans or the loss of their favorite cable channels.
"If the parents can’t afford certain things (for the kids), they need to tell them,” Shapiro said. "Children are remarkably adaptable,” he added. "Even though they can be unbelievably difficult in some circumstances, at times when the family needs to pull together, they can be right there, as long as they’re a part of it. Teens especially so.”
Stay age-appropriate
Financial experiences can be useful for parents who strive to teach their kids how to handle money, said Paul Golden of the National Endowment for Financial Education.
"As soon as the parent starts talking about money with kids, the sooner they’ll understand when challenges arise,” he said.
Make sure the information given to the kids is age-appropriate.
"Talking about a world economic crisis is meaningless to children,” Shapiro said.
"Everything has to be geared to the child’s age.”
Very young children have little concept of what money is, he said, but older kids will sense that something is going on if a parent is suddenly home more often or other lifestyle changes take place. They should be told the circumstances in ways they understand.
Kids can also be involved in making decisions where appropriate, for instance in deciding whether to give up Friday night dinners out or the family visit to an amusement park.
However, one thing to be aware of, Shapiro added, is that children will often imagine responsibility for situations they have no control over.
by the associated press
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