Should you tell your child about your business's financial reverses? Late payments? Problems with the staff? A lawsuit?
"Kids are quick to pick up on household tension, and unless someone explains what's going on in terms appropriate to their age and maturity, they become terribly anxious and imagine the worst," says Irving Barocas, co-author of Kids, Money & Values (Betterway Books). "You don't have to go into detail. If you listen to their questions (`Are we going to be homeless?' `Will I be able to go to college?'), you'll understand they're really worried about their own security."
Explain the problem clearly and simply, remove as much of the fear as possible, couch the discussion in terms of hope, and talk about what's being done to resolve the problem, Barocas suggests. If, for example, sales are down and you can't take a planned vacation, you might tell elementary-school-age kids the vacation has been postponed because you need to stay home to set up a new marketing plan to stem the problem.
With teenagers, you might provide more insight about your plans. "But don't let children feel responsible for solving difficulties," says Barocas. "That's the parent's obligation."