Explaining Family Finances to Your Kids

When it comes to the economy, it seems to go from bad to worse. It's news that can really affect your family -- but how do you explain it to your kids honestly without worrying them?

Some parents wonder whether to involve kids in family financial discussions at all, but one expert says, if they ask, you should tell.

Whether they're toddlers or teenagers, the key is how you tell them.

With many parents tightening their money belts, more are having to say 'no' to what's in the store windows. So many experts say you should talk to your kids about the economy and what it means.

"You can take this opportunity to help them grow and develop," says Dr. Jean Bauer, a family economist at the University of Minnesota. "They're going to know something is going on if you're feeling bad about the economy or something with your job or the house."

Dr. Bauer says kids are more perceptive than you think. Parents should be honest, without scaring their kids.

Dr. Bauer advises parents not to share anything you wouldn't want repeated, like specific salaries or savings.

Finally, she says to try and involve kids. Ask them for ideas on how to save money, or where they'd be willing to make cuts.