How to talk to your children about the financial crisis

Today's children are more than just pint-sized little creatures we are legally obligated to clothe and feed.

They also make a lot of noise.

So it goes to say we should take time to inform them of the global state of crappy affairs in the world today.

As a father of at least two children, I have a vested interest. After all, our children are the ones who will have to clean this mess up someday. We should be gentle with them in the way we let them know we are a stupid society armed with credit cards. When breaking the hard financial news, you might consider the following techniques to approach your child or even the odd kid on the playground.

Sock Puppets

Children consider sock puppets non-threatening. Use them to create parodies of financial situations. Entertain your children by inserting your hand in a sock puppet and then pulling out a dollar. During which, make the sock puppet carry on and writhe in pain. That's pretty much the entire plot. My kids love that one. I call it "The man who did business with a sub prime lender".

Let them fail with their own plastic

Get your kid a debit card with $5 loaded on it. Then, tell them "This magic card can buy you anything you want...anything in the whole, wide world!". They will naturally go buy the latest Brat doll who is showing her belly button or a muscle car toy which easily exceeds the $5. After they cry for a while, tell them that credit cards only buy things $5 or less. When they turn 18 years old and get their own credit card, let them think no different.

Make kids partners in your cost-cutting

When you cut costs so you can retire, make sure you let kids in on your plan. While you are watching college football and the kids approach you and ask who you want to win, make sure you always tell them the team with the lowest tuition. Luckily, Ivy League teams don't even play football on TV. Tell them you root for every team that has low tuition with a high faculty to student ratio and a good success rate with public scholarships. Even if you have to root for a SEC team. It's for their own good.

In summary

Blame the financial crisis on the kids. They aren't old enough to know to defend themselves and you can justify a lot of things by blaming them. That way, when they inevitably fund the solution 20 years from now, they won't feel so disenfranchised.

Time to test some techniques by talking to my 5-year old daughter:

Me: "Hi sweetie! What do you think of the global credit crunch?"

Daughter: "I think it's crunchy! * giggle * "

Classic case of denial. This might take a while...