Dan's Papers - April 17, 2009

Last week, this column began to tread on the delicate area of money and families. In the best of times, establishing guidelines and principles for money within a family can be tricky. In the worst of times - e.g., now - money talks become even more loaded, as the grown ups in the family are forced to navigate rough waters themselves. Should parents talk about money issues in front of children so they understand? Or keep it to themselves?

Last week, I talked to Dr. Frank Maurio about money issues and children. A psychologist for 23 years, Maurio recently published his first book, The Strength Within. He has been doing a lot of interviews lately, and said that family money issues are an incredibly popular topic.

Not surprising for a shrink, Maurio had two quick recommendations when it comes to money issues, in good times and bad: Communicate and share feelings.

"How do you start the money talk?" he said. "Many parents aren't very good at communication with their kids, so the first step is to take the time and make the effort to learn communication skills."

Eesh. Just what we need in times of stress. To take more time for parenting 101. But Maurio believes that if you're going to discuss touchy issues with your kids, you'd better have some guidelines. So he recommends seeking out information not only on communicating with children, but communicating in general.

For parents who do have the skills, Maurio recommends the straight up approach. "Kids are very sensitive - more so than parents think they are," he said, "and they're concrete thinkers so parents should be very clear with information."

In families where money had not been an issue, and children are used to getting plenty on a material level, there may be a conception that cash is unlimited. "Your kids may think there's an infinite amount of money coming in," said Maurio. "You have to be clear with them that that's not the case."

Of course, with little ones who don't know the difference between $100 and $1.00, the information has to be told in a way they understand. "With little kids, it's important to talk about basic concepts of money - maybe setting up an allowance to teach budgeting," he said. "You might explain the different ways we budget money, by dividing up allowance into savings, charity and fun stuff."

With teenagers, Maurio recommends being very detailed in terms of what's coming into the household, and what's going out. Especially now, if there is a change in that flow, he says, "Parents need to curb feelings of entitlement, and define limits. For example, tell the kid they can pay for PART of the bike or sneakers, but allow him or her to figure out how to get the rest. It makes kids have responsibility and teaches ownership."

Maurio recommends engaging children on two fronts: talking to them about how they feel about any changes in family finances, and enlisting them to discuss strategies to deal with it.

"It's important for parents to brainstorm with their kids on ways to save - taking lunch and snacks to school, going to the library rather than to Barnes and Noble [for books and DVDs]."

True to his profession, Maurio goes back to communication as the key. "It starts with talking," he said. "People have to be open with themselves."