Suze Orman's Action Plan (27 page)

To be sure, if the spending spigot has been wide open for years, the New Rules for Kids and Money are going to take some getting used to—for you, and for the kids. Everyone will need time and encouragement, and maybe some patience, as you transition to your new money-wise habits. But you are in the lead here. Your children are sponges; their attitudes are your attitudes. Their actions are a reflection of your actions. Kids do what you do, not what you say. If you make this a journey born of guilt, remorse, and failure, that’s the lesson they will take from you and carry with them the rest of their lives. Or you can embrace your new money habits with a sense of clarity and purpose and hope that what you are committing to today will benefit all of you, every day, from here on out.

• Take responsibility for teaching your kids how to handle money.
  

• In an age-appropriate manner, talk to your kids about changes in your financial situation. Silence is damaging.
  

• Give your children tangible lessons in budgeting; have them help you pay the bills and, when appropriate, give them a budget to manage for themselves.
  

• Teach your children about credit card debt and the power of compound interest before they graduate from high school.
  

• Make
  your
  retirement saving a priority. It will be the greatest gift for your grown children.
  

ACTION:
Talk about your goals—what you are moving toward—rather than focusing on what you are leaving behind. Your attitude is key here. If you approach this with guilt or a sense that you are failing your children, you are literally telegraphing to them that they should be disappointed and angry.

I am not talking about spin for spin’s sake; your goal is not to manipulate your children into thinking this is all fabulous news. Acknowledge that you so wish there was plenty of money for everything you and they could ever want. But that’s not where your family is at right now, so you are going to focus your spending on true
needs
, not
wants
. That could well entail its own conversation about
what is a need (electricity, food) and what is a want (a $100 pair of sneakers rather than a perfectly functional $40 pair).

Respect your children and explain the “why” behind the fact that you can’t afford three after-school programs this year, or why you are scaling back the cable service, or why you will not be buying them a car when they get their driver’s license. Not because they are bad or undeserving, or because you are bad. But because life throws curveballs from time to time. And right now your family needs to work hard to spend less so you can focus on new goals. Maybe that goal is making sure your emergency savings can last through a layoff, maybe that goal is paying off credit card debt, maybe that goal is knowing how important it is to save some money for the future.

ACTION:
Talk to him. Really talk to him. Saying “Don’t worry” is not talking. It is dismissive and dangerous. Your kid has already announced his worry, so now it’s up to you to work through it with him.

The level of specificity depends on your child’s age. An eight-year-old doesn’t have the capacity to digest a discussion of Wall Street greed, lax regulation, and easy lending standards. But he can most definitely grasp a conversation about making smart choices and making bad choices, and that there were a lot of bad choices made that we now need to fix. Reassure him. Even if you are scared yourself, do not let that seep into your conversation and your actions. Your child needs to know that no matter what happens, you have a plan, and you have his back.

ACTION:
Ever tell your kids that honesty is the best policy? Great—now follow your own advice. If you have a partner, first sit down and give it a dress rehearsal; you want to run through this conversation first without the kids present.

Once you sit down with the kids, be calm and reassuring. Don’t downplay it by saying it is “no big deal.” It is indeed a very big deal. But it is something you will cope with. Make sure young children understand exactly what has happened; often language we think is clear—laid off, let go, fired—is confusing in itself. Explain that you had a job, but you no longer have that job. Make it clear that you have a plan; that you are working on getting a
new job; that it may take time, but you are in control of things.

Then you need to address how the layoff may affect your children. If you have money stashed in an emergency savings fund and you got a great package when you were let go, maybe the immediate impact to your kids will be minimal. But I know that for many of you the financial stress is immediate and harsh. Again, be honest here. If your children are teens, spell out that you will be looking for ways to trim the family spending for the duration.

Give teenagers space to be scared and confused, and maybe a little bit angry. Not a ton of space, but enough to allow them to adjust to the news that their life has changed too. Just as you needed time to get over the hurt and shock of being laid off, you need to let them work through the emotion of this curveball.

You might not want to get into specifics in the first conversation, but plan a follow-up soon after to talk about how you will be making adjustments as a family. A generic “We need to cut back” is not the way to go. Share specifics so they can have a tangible sense of what will help. Maybe this will resonate for your family:
You know, when we go out to the movies it’s great fun, but for the four of us it costs $45 in tickets, then another $15 for popcorn and sodas. That’s $60. Instead of going to the movies it would be good for us to rent a movie from Netflix or On Demand
for a few dollars and make popcorn in the microwave. We can save $50 right there. That’s a big help
.

If your layoff necessitates cutting back on household help such as a gardener, housekeeper, or dog walker, those are all tasks where any child can pitch in. You may get some groans, but if you position this as a family financial project I bet they will soon come around and appreciate their ability to contribute.

ACTION:
You are right to worry. This is a big test of parenting. How you handle this stress telegraphs lessons in navigating through hardship. That’s hugely important, but studies have also found that how parents handle financial stress can literally affect their children’s development. If you are strung out about money worries, that is going to have an impact on the way you relate to your family. If you are feeling depressed or your relationship becomes unstable under the money strain, it can create an unstable environment for your children, and that, in time, can expose them to even greater problems, such as floundering in school and substance abuse.

I realize these are trying times for many of you. But just do your best to stay strong and focused for your kids. Set your sights on getting them through
the tough time and ensuring that they stay on a path to becoming everything they deserve to be, and everything you so want for them.

ACTION:
Life happens. That said, give them time and space to panic. Honor and respect their emotions, but do not feel guilty.

Then look for ways to help them make the transition. While you may be eager to have everyone relocate with you as soon as possible, consider having your kids stay put with your spouse or partner so they can finish out the school year. That gives all of you time to ease into the move. Make finding a new home a family affair; do not buy or rent something and then present it to the kids as a done deal. Sure it’s ultimately your call, but asking them to help you find the right place makes them a part of the process. The move is happening with them, not just to them.

You might also consider booking a return trip to your old home after you leave for good. Or arrange for each child’s best friend to come visit you in your new city. You can help them by creating bridges between old and new.