In tough economic times, when parents may face pay cuts, even foreclosure or bankruptcy, instinct says hide it from the kids. Parents should always be open and honest with their kids, even when it comes to money, says Ms. Schwab-Pomerantz. However, they should keep a child’s age and maturity in mind when deciding how many details to reveal, and never scare them.
“Even if you have to tell them something really difficult – like that you’re going to have to give up your house – you want to let them know that you have a plan, and that the family will be okay,” she explains. “Be honest about the trade-offs or sacrifices you’ll need to make, but let them know that you will continue to take care of them.”
