economic crisis

Dealing with the fallout from the financial crisis and the concern about your job and finances is tough for everyone right now. However taking to teens about what’s going on is very important. In an article from cnn explains the importance of taking to your children about the economy because “it's a conversation worth having, especially now that they're old enough to share the stress”. Mary Gresham a psychologist who specializes in financial issues says that taking to yours teens about the economy will “Not only can you ease their concerns… and you can turn these into teaching moments". Image is from flickr.com/photos/jpellgen/3345383578/

The last recession was in the beginning of the century and teens now were too young to remember what was going on. Now they are old enough to know what’s going on and the harshness of the situation even if they don't fully understand it. To get the conversation going parents should explain what's happening in our economy and around the world. You should include how “consumers are spending less, stocks are falling, companies are cutting jobs and put it in perspective” (cnn). According to David Barnett a financial adviser in California to engage discussion “Use headlines about rising bankruptcy filings or news of a friend's parent being laid off to underscore the importance of saving money”. Also explain to them that recessions occur on a regular basis and that while this current one may be particularly harsh, the economy will bounce back in time. At this point you can tell them how it is affecting the family and your finances. Explain also how it will ultimately affect them. "You don't want to convey anxiety, just the facts… Start with what's not at risk: their allowance, say, or your ability to pay the mortgage” (cnn).

The next topic you may discuss with your teen could be the vulnerability of your job and that you may not be able to cover all college costs. It is important for teens to know this and to have a plan to pay for college “Tell them exactly how you plan to cope” (cnn). According to psychologist Marlin Potash, who focuses on money and relationships says that you must not tell your children Were going to be ok without explaining why were going to be ok. Let your teens know about choices that affect them like credit cards and loans and give them a chance to share their feelings and suggestions. According to Kathy Stepp, a financial adviser in Overland Park, Kansas says "I want them to understand the concept of living within their means…and the potential consequences if they don't." David Barnett explains how important it is to save money "Times like these really help explain why you need that emergency fund." These teens are the next generation and will soon be trying to get jobs and start earning a salary and it is important for them to know early how to save and mange their money in a smart way so they don’t end up in trouble with their finances.

In a recent poll by Junior Achievement, with the support of The Allstate Foundation, conducted its tenth annual “Teens and Personal Finance” poll in late February of 2009. The survey assesses how the current economic climate has impacted the spending and saving habits of American teens. The poll also looks at how the economic crisis is having an impact on families. It includes recreational activities, such as going out to eat and going to the movies. Also families and teens are taking less expensive vacations or staying home. Teens also report they’re getting reduced allowance and cutting back on extracurricular activities.

The economic crisis appears to be influencing the behavior and spending habits of teens, which have conventionally been the “demographic with the highest percentage of disposable income” (Junior Achievement). Teens today admit to being “anxious about the economy and their current spending habits underscore just how concerned they are” (Junior Achievement). Teens in the workforce are facing similar challenges to those faced by adults including wage reductions, their schedules are being cut, or are getting laid off. Also many teens fewer jobs and there is more competition for the jobs for which they’re applying.
Our economy is so bad that parents are asking teens to contribute to the household. Image is from flickr.com/photos/bearmancartoons/3101840139/