Talking to Your Teen about the Economy

Talking to Your Teen about the Economy

Teenagers will be feeling the stress of the economy soon – and when teens feel stressed, the whole family is likely to suffer. Studies show that a stressed teen is more likely to experiment with drugs and alcohol, struggle in school, fall in with the wrong crowd, and rebel against his parents.

The single biggest predictor of teens’ economic worries is how worried their parents are. Teens also worry more when economic concerns have impacted their daily lives; for example, when parents cut back on allowances or purchases because of the economy.

In order to keep teen worries to a minimum – and take advantage of the teachable moments presented by the recession – experts recommend that parents talk openly with their children about the economy and its impact on their family. Here are a few tips to get the conversation started:

Describe the Recession

Adolescents are old enough to understand the basics of economics and personal finance. Calmly and directly explain that recessions occur with some regularity and that, as it has in the past, the economy will rebound. Note that a major part of the problem involved people living beyond their means and misusing credit so that your teen can learn important lessons about budgeting and responsible use of credit early in life. Also explain the effects of the recession, namely that consumers are spending less money, banks are making less credit available, stocks are falling, families are struggling to afford their homes, and companies are laying off workers.

Explain the Impact on Your Family

After you’ve explained the situation in general terms, explain how the recession is affecting your family in particular. Even though you may feel a great deal of anxiety and fear about the economy, convey just the plain facts to your teen. Make sure she knows that she will be safe and taken care of no matter what, and that she can rely on you to find solutions to the family’s struggles.

First describe the aspects of life that will not change (for example, your teen’s allowance, your ability to pay the mortgage, and so on). Then explain the things that might need to change (such as your teen’s college savings account or how often you go out to dinner), always conveying that your family will be okay and supporting the statement with reasons why.

Be sure to follow through when you set limits – your children will be more confused if you explain the need to cut back and then continue to spend lavishly. The underlying message should always be that you still have what matters most – the people in your lives – and the rest you can live without for a while.

If your family needs to make cuts, involve your teen in those decisions and give her a chance to express her feelings. Older teens are often able to understand and appreciate the specifics of a family budget. For example, even though your family may not be able to afford a trip to Europe this summer, your teen may be able to come up with cheaper alternatives such as camping or taking day trips to nearby areas of interest. If there are specific items your teen really wants and you can’t afford, discuss the prospect of getting a part-time job or saving up money from babysitting or mowing lawns.

Most importantly, make sure these conversations are happening on an as-needed basis (perhaps in the form of family meetings) since your teen is likely to have questions and concerns that surface more than once.

Share Other People’s Stories

When you’re watching the news or sitting around the dinner table, discuss ways the recession is affecting other families. There are many lessons that can be learned from the current economic crisis, even if your family has made it through relatively unscathed.

For example, talk about the hordes of home foreclosures and the risks of certain types of loans and investments. Explain the impact of a plummeting stock market on retirement funds and college savings accounts, and the difference between short- and long-term investments. Other people’s stories can help teach your teens the importance of saving up an emergency fund, living within their means, and using credit only when the bills can be paid immediately.

Limit Media Time in Your Home

Constant bad news, especially when it is exaggerated or blown out of proportion, can be damaging to both parents and teens. While it is healthy to be aware of what is happening in the world, too much focus on the negative can make young people worry excessively. Set limits on how much time the family will spend watching television, surfing the Internet or listening to the radio. Instead, dedicate more time to taking walks, playing games, or hanging out as a family.

Maintain Household Routines

Parents can maintain a sense of normalcy during difficult times by preserving daily routines as much as possible. Teens need to know they are expected to help around the house with chores, babysitting, and other tasks and feel that they are contributing to the welfare of the family. Of course, teens shouldn’t feel as though they’re responsible for keeping the family afloat, but if there are areas in which they can contribute more, let them know.

Get Help

Your children pick up on your cues and act accordingly, which means the more worried you are, the more worried they are. That’s why it’s more important than ever for you to take care of yourself. Make time for relaxing activities, make sure you’re eating well and getting enough sleep, and try to stay positive. If you’re exceedingly worried, stressed, or depressed, get help.

Likewise, if you notice changes in your teen’s mood, behavior, friendships, or school performance, or if you’re concerned about the level of stress and anxiety in your teen’s life, talk to a health care professional before stress leads to more worrisome behaviors. In more serious situations, such as if your teen is depressed or acting out in school or at home, or if other hardships like a divorce or death in the family are happening simultaneously, it may be best for your teen to get away for a while at a wilderness program or residential treatment center, where he will participate in intensive therapy and learn new skills to cope with the stressors in his life.

The worst lesson you can teach your teen is when times get tough, pretend nothing is wrong. Whether you’ve talked about the economy or not, your children know when something is wrong, and they’ll only imagine the worst if they don’t have somewhere to turn with their concerns.

Everyone, adults and teens alike, can learn something from the current economic climate, so take this opportunity to be a model for your teen and show him how to solve problems, deal with difficult situations, and make decisions during the best and worst of times.

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