In 2008 an already slow economy practically came to a screeching halt.
Seemingly reliable corporate giants and age-old banks collapsed or asked
for government rescues to the tune of hundreds of billions of dollars.
As the stock market struggled to stay afloat, one major company after
another begged for lifelines. Automakers teetered as banks and credit card
companies cut back on credit lines, making it tough even for people with
good credit to get a car. Companies doled out pink slips in droves, and
the worst unemployment rate in decades showed no signs of letting up.
House prices plunged and more families faced foreclosure on their mortgages.
No doubt, the economy will continue to take center stage throughout 2009,
as families tighten their purse strings further and brace themselves
for even more economic setbacks. Even the basics — rent/mortgage, gas,
groceries, heating oil, child care, health care — may become a difficult
burden for usually financially stable families.
What to Watch:
As countries continue to reel from a global recession, more and more children
here and abroad will go hungry or face homelessness. Many families
on the brink will resort to buying unhealthy, cheaper foods and
put once-routine checkups, medications, and immunizations
on the backburner. And lessmoney for charitable giving could mean
scarcer resources for those newly in distress. There may be fewer dollars
for scientific research and the fight against threats such as measles,
tuberculosis, malaria, hunger, and AIDS worldwide.
The fragile economy may get worse before it gets better. Now, it’s essential
for many (if not most) households to learn how to live with less — and do
it within their means, instead of falling back on credit or loans.
Parents
have an additional challenge: helping their children through these difficult
times. Even if they don’t always say so, kids are very aware of the tension
felt by their parents. As with many things, the best approach is for parents
to talk to kids about what’s going on and how their family will cope. Kids
may not be interested in the global economy, but they are interested in
what is happening to them and their family.
It’s OK to say “no,” set limits, and tell them that there’s a limited amount
of money in the family budget. Honesty is key but too many details might
be too upsetting, especially for younger children. If nothing else, our collective
money crunch is a prime opportunity to teach kids of all ages important
lessons about separating “wants” from “needs,” delaying gratification, and
earning the things they truly want. After all, food, heat, and a roof over
their heads come before toys, “in” clothes, or a teen’s new car.
