I came of age in the 1970s when America faced a long and deep recession sparked by the quadrupling of oil prices, exacerbated by government spending on the Vietnam War, which spurred inflation and higher interest rates. Stagflation ruled the day.  

Stocks prices (not that we owned any shares in my family) lost nearly 50%, interest rates hit close to 20% and jobs were scarce.  My dad was laid off more than once.   We spent years eating meals of rice and beans, nursed our Pontiac Tempest long past its prime and wondered if we might lose our home. My dad got yet another job.  My mom went back to work. That was a valuable lesson but even more valuable was the conversation that took place at the dinner table. We kids weren’t shielded or coddled.

The raw truth was right there in front of our faces in all its gloom. We knew the risks facing our family.   

Then one day my dad walked out and our reality became even grimmer. We were sunk.

My incredible mother modeled courageous behavior—she got a second job. Because we were wobbling across the high wire of life without a safety net, I learned the importance of work. I was a pre-teen at the time — too young to get a real job — so I babysat, pet sat, and cleaned houses.  And I saved every bit of my earnings. I learned that each penny unspent increased my sense of safety, increased my flexibility and provided me with the wherewithal to dream.  

In short, economic uncertainty provided me with valuable life skills. 

So during these grim times when many of us are treading in treacherous waters, how do we overcome our own fear to teach our children valuable financial principles?  

Model good behavior

Start by modeling satisfaction and gratitude for what you have. My mother’s parents fled Armenia during the genocide in the early 1900s and landed in Fresno, California. My mother’s father soon took off for San Francisco and left the family alone and destitute. My mom learned early how to be content with very little and passed that along to her children. Instead of blocks, we played with free lumber scraps. The complexity of trying to build structures with uneven triangle and rectangular pieces was a challenge, and it kept us busy for hours.  My brother went on to become an engineer.

Let them practice

Engage your children in the act of saving. With my own family, we set up a savings plan based on incentives. We placed jars in the kitchen. Behavior and chores were rewarded. Each child’s own savings were matched. We also established penalties for undesirable behaviors (think food fights, for example) which were deducted from the jar.  The act of watching the jar fill up, then sorting the money and taking deposits to the bank became an important ritual reinforcing the importance (and fun!) of earning money and watching your savings grow.  

Be open about struggles

Talk to your children about your own financial difficulties. If you have lost your job explain how that impacts the family finances.  Discuss the near-term sacrifices and changes you will need to make around spending until you find a new job.  Enlist your children’s help in the process like you would colleagues working on a project that has hit a roadblock.  What can they give up to help Mom and Dad?  Suggest ways they can make money to help pay for things they want.  This will make the family stronger.

Allowing your children to experience your financial ups and downs improves their ability to prosper.  They are resilient — more than we often understand as parents. Teach your children to set financial goals. If they work and save with the knowledge they are not only helping themselves but also contributing to the family will increase their confidence and sense of worth. 

These are undoubtedly difficult times but, with a little luck, they will produce some life-long lessons and skills for our children.


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