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change in the lifestyle to which they were once quite accustomed. If there is anything positive the recession


left in its wake, it’s that we all have experi- enced a teachable moment. The stories of Americans struggling with job loss, fore- closures, high health care costs and credit misuse have reaffi rmed the fundamentals of why it’s important to budget, have emergency savings, protect assets with insurance and limit our dependency on credit. But what are the lessons for our children?


More than from any classroom learning or having their own income to manage, kids learn the most about money from their parents. And adults who aren’t exercising good fi nancial behaviors are unknowingly infl uencing their kids — because children are watching. Beyond telling your kids that they cannot have the toy in the store or the latest smartphone, or that the family will not be able to take the long- awaited vacation they were planning, you need to have thoughtful, regular conversations with your kids about money — and the earlier you do this, the better. Here are fi ve ways to speak with your chil-


dren about family fi nances in these economi- cally diffi cult times.


1 Discuss cutting spending creatively A 2011 survey by the National Endowment for Financial Education (NEFE) found that 39 per- cent of people feel the quality of their fi nancial life is worse than they expect it to be. If you are struggling fi nancially, it’s time to


make some concessions. Cutting areas such as dining out, grabbing fast food on the way home and going to the movies can go a long way toward saving money. Because these are fam- ily activities, this is a great time to set spending


Ready, Set, Grow


Speak privately to your spouse about money troubles. Don’t assume your kids are tuned out


It’s important to have regular, thoughtful conversations with your kids about money


ground rules for all. Explain to your kids that ev- eryone will be expected to cut back while times are tough. Ask for their input, or have a contest on the most creative ways to cut spending. If your children offer to defer expensive


purchases or to take a small cut in their allow- ances, let them. While the net impact of their sacrifi ce may be relatively small, it will help them feel like they’re contributing to the family in a meaningful way.


2 Be honest and transparent, but be appropriate As parents, we indulge our kids. We want them to have the latest tech gadgets, wear the cool fashions, participate in sports and


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