Economic Hardship Can Be Tough For Kids

Continuing the program's Cheapskate series, the Mocha Moms share their thoughts about how to keep family financial hardships from traumatizing children. Moms Jolene Ivey, Donna Maria Coles Johnson and Dannette Tucker swap tips on helping kids cope with tough economic times.

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MICHEL MARTIN, host:

I'm Michel Martin, and this is Tell Me More from NPR News. Later in the program, working with debt collectors - how to stop the craziness - and our monthly visit with our ethics panel. But first, they say it takes a village to raise a child, but maybe you just need a few Mocha Moms. We visit with members of this mothers support group each week for their common sense and savvy parenting advice. Today, we want to talk about preparing your children to face tough, economic times. Job loss, divorce, death of a spouse, a medical crisis, all these can disrupt a family's finances.

And with home foreclosures, and other bad economic news in the headlines, we thought it was a good time to talk about how to survive a financial crisis without traumatizing the kids. Here to talk about this, are the Mocha Moms, Jolene Ivey, Dannette Tucker, and Donna Maria Coles Johnson. Welcome, ladies, moms.

Ms. JOLENE IVEY (Mocha Mom): Hey, Michel.

Ms. DANNETTE TUCKER (Mocha Mom): Thank you.

Ms. DONNA MARIA COLES JOHNSON (Mocha Mom): Hi, Michel.

MARTIN: Now, Donna Maria, you visited us a while back to talk about how to make the most of coupons, and there's a reason you're such an expert. So, can you just refresh our memories about that?

Ms. COLES JOHNSON: Sure, Michel. Three years ago my husband lost a job to a layoff. The result was a 60 percent drop in our income in one day, and so, I quickly had to reign our finances in, which I'd never really done before. We had a two year old and one year old at the time. So, it was quite a devastating loss, but through it we have learned to be better money managers. So, the silver lining is that we have a lot more money savvy to show for our experience.

MARTIN: That's great, Dannette, what about you? Have you ever had a setback that you had to explain to the kids?

Ms. TUCKER: Oh yeah, big setback. My ex-husband, their father and I separated and subsequently divorced. We were in Maryland, and I lost my job because I had to have another surgery and had to go on the system, had to go on welfare. I had to move my kids out of Maryland into D.C. because D.C. had more programs than Maryland had to help single moms. You know, I went from two salaries to nothing, and went on a system, went down there and signed up for what is called TAFNF now, it's not called welfare. Temporary Assistance for Needy Families.

I used it for two years to get back on my feet, take advantage of all the programs that it had, took some classes. They helped with job searching, the kids were able to do a lot of free things, because of it, youth programs, sporting programs. And you know, I mean, I didn't feel bad about it, but I had to use the system to get back on my feet and I did.

MARTIN: OK, I want to come to you. Jolene, what about you? Have you ever had to re-trench?

Ms. IVEY: Well, we knew we were going to have to re-trench and that's what - my husband had been a partner at a law firm and he was making, you know, a lot of money for most people and certainly for us. And when he was running for public office, and it looked like he was going to win, I said, oh my god, if, this man wins this thing, our salary gets cut in half. And it was a serious hit. So, since we kind of planned for it, it wasn't as bad, we used to have two people cleaning our house, and over the course of the months leading up to him winning we have - well, now we have seven people cleaning our house.

(Soundbite of laughter)

Ms. IVEY: My five kids, me and my husband. You know that kind of thing, no cable, I mean - we had to cut to the bone because that's how it was.

MARTIN: But, do you think it made it easier because it was your choice, or was there a part of you that was mad?

Ms. IVEY: No, it was easier, because it was our choice, Definitely, it wasn't like devastating or anything like that, it was certainly nothing like Dannette's gone through. What it was though, is harder for the kids, I guess. They don't really care whether it's your choice or not, they just know they want cable.

(Soundbite of laughter)

Ms. IVEY: You know what I'm saying?

MARTIN: Yeah, how did you explain it the kids? I want to go around and ask each of you that question. Jolene, we're going to start with you because we were talking to you. You and Glen made a decision that he was going to make a change, that he was going to do something he believed in that was important to do, but it had a big impact on them. How did you explain it?

Ms. IVEY: Well, we tried to show them all the time that what's important is that you love your job, and you do something that you want to do, one that you feel makes a difference. And sometimes that means you don't make as much money as you possibly could, and we tried to make it so that things aren't the most important thing in our lives.

MARTIN: Dannette, what about you? It seems to me that you had a lot of changes, the kids obviously knew some of this was going on, but how did you talk to them about it? How did you keep them from being devastated?

Ms. TUCKER: I hate to coin a phrase, but I kept it real. I had to. It was not the time to make up anything, I mean, they're living in it I didn't want them to hear from anybody else. I sat them down, said this is what's happening, a, b, c, d, and this is what we're going to have to do. But I took an opportunity to teach them a life lesson. Life will do that sometimes. It may throw your curve ball out of nowhere and you've got to be able to just, revamp yourself. And the only thing - the biggest thing we did was, not stay bitter, would not let them get bitter. So, I felt telling them the truth about what was going on kept them from being bitter.

MARTIN: Were they ever angry at you? Because sometimes when there's a parent missing the parent whose still there is the one that comes in for the drama, because you're the safe one, right.

Ms. TUCKER: Oh yeah, very mad at me. Why won't you stick in there with daddy, they didn't understand that daddy is not a good influence here right now. So, I had to do what was best for them, and at the time it was my best to stay in there.

MARTIN: How did you master your own emotions, because you obviously had your own feelings of - you had to, of being vulnerable, of being frightened, of...

Ms. TUCKER: Faith, and my Verizon friends and family network.

(Soundbite of laughter)

Ms. TUCKER: I used my Verizon Family and Friends network beyond telephone calls. You know what I mean, I mean they would come over and go all right girl, come on let's do this, and I got the spaghetti tonight, and I'll go watch a movie with the kids.

It was that, you know, the village reached out and came to me, and when I saw them there with me, and we're all doing the same thing, it just lifts you to another place, and you just feel like you can go on, and that's what we did.

MARTIN: Donna Maria, what about you? Your kids were so little at the time, but I think having little kids makes you feel very vulnerable. You know what I mean? So how did you think about what to talk about with them, or how to deal with the situation vis a vis them. What did you do?

Ms. COLES JOHNSON: At the time they were too young. I mean they were - one was an infant practically, and the other one was just beginning to walk. So, I think what we went through was right after the lay-off, we had to regroup and ultimately two and a half, three years later, we sold our house and moved 600 miles away. That was when we had some explaining to do.

(Soundbite of laughter)

Ms. COLES JOHNSON: Because, by then they were old enough to have a couple of friends, they'd been to some birthday parties, and they wanted an explanation as to why they were leaving their grandma and their grandpa and all their friends and people they had gotten to know. So, we did have to sit down and talk with them and as, my fellow Mocha Mom said, keep it real, you know, this is what mommy and daddy have to do so that we can take care of ourselves and plan for our future and plan for your future as well.

MARTIN: When you have to re-trench abruptly as you did, you didn't have time to plan, I assume, you didn't see it coming. What's the first, second, and third thing you did?

Ms. COLES JOHNSON: Well, we prayed a lot. Secondly, we just cut off a lot of things that we wanted, but didn't need. We turned off the cable. We stopped using the utilities as much as we did. We used one vehicle. We bought gas at a cheaper place. And I really spent a lot of time encouraging my husband at that time in addition to regrouping our finances.

MARTIN: If, you're just joining us, you're listening to Tell Me More from NPR News. I'm speaking with the Mocha Moms, Jolene Ivey, Dannette Tucker, Donna Maria Coles Johnson about teaching your kids to deal with tough economic times.

Donna Maria, you're also really big on teaching your kids about money and not just the difference between cash and credit - my favorite is you sometimes pay their pre-school bill in cash.

Ms. COLES JOHNSON: Yeah.

MARTIN: Why you emphasize that so much?

Ms. COLES JOHNSON: Because I want them to see the money leaving our house and going into something that is important. My daughter once actually - just last year, she told my son - my six-year-old daughter told my son, you really have to do your best in school, because mommy pays a lot of money for this.

And that's because, every now and then I call the school in advance to make sure it's OK to bring cash, well, I would bring cash and tell them, we're going to go into the office today, and we're going to pay for your school. So, they can understand the connection between getting something of value and the fact that it costs money instead of swiping the credit card and writing a check.

So, I want them to know, it's money coming out of the, you know, pizza budget or the toy, the Spiderman budget, in my son's case.

MARTIN: Dannette, how do you talk to your kids about money? Because, on the one hand you want them to respect the hard work, on the other hand you don't want them to be obsessed with money, because, you know, you can see where it could go the other way. If kids see their parents struggling so hard they make it - it becomes so important that they can't learn the lesson - Jolene was talking about that money isn't everything, it becomes everything. How'd you balance that?

Ms. TUCKER: I put them to work.

(Soundbite of laughter)

Ms. TUCKER: The best way for them to know what I'm going through, you go through it.

(Soundbite of laughter)

Ms. TUCKER: Well, I mean, you're going to babysit, you're going to clean this, you're going to go over to so and so's house and do this, and my son's working his second summer job at the summer youth program. I don't want them to be naive to what this world is about if something like this happens. You got to work your way back from it, so come on and work.

MARTIN: Jolene, what about you?

Ms. IVEY: I actually worry about my kids worrying about money. I worry about my oldest kid who's in college now, and he worries about how much this is costing us and worries about does it make sense for him when he finishes college to go onto law school.

And I tell him, look, whatever you'd have to take out in loans in the long run it's going to be worth it to get whatever education you need, and it's not just for how much money you can make, but the choices, the freedom that you have because you have enough education to do whatever you want to do.

MARTIN: I wanted to ask each of you, because as we all know kids can be very mean, particularly as they get to a certain age, in what you wear, what you drive, where you hang out becomes a big deal. I remember when I was - I don't even, gosh I must have been in junior high school. I remember going to the bus stop every day, and having this one girl - I can't remember her name I must have blocked it out, basically itemized what everybody at the bus stop had on, particularly by a label. And if there was not a label, then she'd be going, huh.

Like, for some reason I remember Fred Braun shoes, well, she got some Fred Braun shoes, and some Guess jeans, and just, you know, you just want to die, you know. You can say, oh, you should be tougher than that, bigger than that, but you know at that age, right? So, how do you? Dannette, I want to ask you especially when you went into the - on the system as you said, and started getting relief, TAFNF? Was that hard?

Ms. TUCKER: I was at first but, one thing that I learned from family back then, is we never really focused on gas jeans and you know buying a lot of designer, just spend our money on that. So, I was thankful to my parents for instilling that in me, because that helped us do the kids that way period.

You know, so we can stay trendy without paying 200 dollars for some Michael Jordans, Jordan don't need no money, you know. So, my son now you know, I like that, the kids now coming in with their own styles, they're going into the styles like Stephan Mulberry whose shoes are very inexpensive, but OK, you know they are getting into that. So, I just kind of you know, promote that with them. Promote the alternative you know, you know it's cooler now to do this than to pay all this money, have these things and then act like a fool and not appreciate them you know?

MARTIN: Jolene what about you?

Ms. IVEY: Well, in our house we generally think people are crazy if they spend 200 dollars on a pair of tennis shoes. So, we don't really have that kind of thing to worry about. My poor kids, I really kind of feel sorry for them, because for years, I mean I so much don't care about clothes that the neighbors would just drop off bags of clothes, and we would just go through the bags and whatever you wanted we'd use and whatever you don't want, I'd give it to Goodwill.

And, I didn't think about it for a long time, that that's how we clothed you know, all the kids and even me sometimes. Because, I don't care, but when they figured out that their friends clothes were what they were wearing, then they started to become annoyed, and they said, no more. We will not wear any more clothes like this. So, you know they don't even care if I go to Goodwill and buy the item, they just want to have the chance to pick it out and it not be something that their friend around the corner dropped off.

MARTIN: Which is funny because now that's a cool thing among adults, is to have like a swap meet on the weekends. This is what - adults are doing that.

Ms. TUCKER: That's what I mean making it cool.

MARTIN: Yeah, in fact Danne you got a sweater that I'm looking at that I'm kind of wanting to.

(Soundbite of laughter)

Ms. TUCKER: It ain't mine, it ain't mine I got it in the swap bag.

MARTIN: Donna Maria what about you, you've - give us some of your tips for teaching kids about money and helping them to kind of work through these issues without being scarred by it.

Ms. COLES JOHNSON: Well, one of things I do is I coupon a lot. I have a special little section in my coupon notebook for snacks and treats for my children, and when we go to the grocery store, if they can find a coupon for it, then they can buy it. When we get up to the cash register I try to find one that's empty, and I give them the money.

They're only four and six, so they - you know they're not old enough to understand a lot of the things about designer clothing and things of that nature. But I give them the money, and I let them, you know, actually feel the money go onto their fingers, and you know pay for it and see what the receipt says. And see how much money they saved using that coupon at that box of whatever it is that they got, cost a $1.50 less because they used a coupon. And that's really an effective tool to show them, because you can see it on the receipt, you can trace it all the way through from the coupon to the receipt.

MARTIN: And you're big on letting the kids see you pay bills. You see a lot of times kids will see their parents go to the ATM, take money out, but they don't see their parents paying bills, because that's something that the parents want to do when it's quiet. So what do - how deal with that - especially because a lot of people pay bills online. You just have them sit with you and say watch me?

Ms. COLES JOHNSON: Yes, I let them sit with me and watch, and you know with automatic deposits and stuff from jobs and things like that, it is tough. But it has been worth it to take them to the bank and show them the money, even when they get a gift in cash or if we have some money that's come in from wherever we get it from. Just to make the point to show them, we're not just driving through the ATM machine pulling money out. We've got to go into the bank and put money in there first before you can get some out. So, the work, as the Mocha sisters say, comes before the reward.

MARTIN: OK Danne? Final thought from you, some other tips.

Ms. TUCKER: Use your Verizon friends and family network for other than phone calls, really. I mean you just take that idea around with it, we share cooking, we share homework help. You don't need a tutor I can do that, you know. The kids are doing it now, so and so got an iPod we going to swap this day. We use our network for a lot more than just sharing minutes.

MARTIN: Well, do you have - but I have to ask though, have your kids ever been teased and how do you...

Ms. TUCKER: Yeah, they have been.

MARTIN: Deal with that?

Ms. TUCKER: But that's when you go - when they come home I'm the motivator in the house, so we do old fashioned sticks and stones may break my bones, but words don't hurt me. You know, and like that's just words you all, you can't let it stop you. We going to keep going the way we're going and you make it look good, make your character, make it look good, and they do they get teased, they get frustrated, especially Davon (ph), because he's a...

MARTIN: Because he's a teenager.

Ms. TUCKER: Teenager, he wants to be cool, but it has made him work harder.

MARTIN: Jolene, a final thought from you?

Ms. IVEY: Well, if I can put on my legislator's hat just for a second, there's a couple of bills that we passed in Maryland this year, that might have some impact on the rest of the country, depending on how it's taken up. One, is credit card companies, they can't come on campus anymore and just ply their wares without anything else. They have to also provide education and materials about what happens to credit card debt. So that kids don't just get these credit cards, run them up like crazy while they're in college, probably making little to no money, and then they graduate not just with this huge student loans but huge credit card debts.

So, that's one thing and another is in Maryland we have a task force now to study how to improve financial literacy in the state. And they're going to start with high school kids on up, and look at how much do kids know, how much do people know, and where do we need to improve?

So after we have the information we'll be able to take better action because we did find out in like, in 2006 there were 65 percent of high school seniors with failing scores, with knowing how money works, and that's just like ridiculous, that's an increase over 44 percent of just a couple of years ago. So, things are really getting bad with young people understanding money, and Donna Maria, you need to come back up here and help us out.

Ms. COLES JOHNSON: I'd love to, I'd love to.

MARTIN: There's one other thing that Donna Maria - we don't have time to talk about, but I also want to mention that you also emphasize the importance of giving. That when you talk to kids about money, you talk about saving, spending and investing, but you do also make a point of talking about donating. So, I think that's - and as I mentioned we will have all of your tips on our website. So, our regular Mocha Moms, Jolene Ivey, Danne Tucker they joined us here in our Washington D.C. studios. We're also joined by Donna Maria Coles Johnson, a Mocha Mom expatriate I guess in Charlotte, North Carolina. She joined us from WFAE in Charlotte. Thank you all so much for joining us.

MOCHA MOMS: Thanks Michel.

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Ten Tips For Teaching Young Children About Money

By Donna Maria Coles

1. Start early. I started teaching my kids about money before they could talk. I talked to them about money. I showed them money. I let them touch money — in my presence of course, for safety reasons. I let them push buttons when I was dealing with money — the grocery story, ATM, etc. Anytime I was thinking about money, which was a lot, I said my thoughts out loud so my babies could hear them. This establishes your mindset early on as a parent to make sure you never miss an opportunity to teach your children about money.

2. Use mantras. Repetition works. From the time they can talk, teach them mantras. My favorite is, "There are 4 things you can do with money: spend it, save it, invest it, donate it." I say the first part, my kids say the second part. Another one: "Take care of your money and your money will: take care of you." Again, you say the first part and they say the second part. This confirms that your children are in control of their money and not the other way around.

3. Use coupons. Save coupons for snacks and treats. At the grocery store, if your children can find a coupon for something they want, they can buy it. This lets them know that you should rarely buy anything at the grocery store unless you also have a coupon for it so you can save money.

4. Teach them to use cash. At the grocery store, show them that you are using cash so you don't overspend. Show them a credit card and let them feel the difference between that and cash. Let them know that both can be used to take care of yourself, but that when you use cash, you have more money left over for other things. As a simple example, tell them that, if you use a credit card, you're paying $1.25 for a candy bar that really only costs $1.00.

5. Teach them not to pay full price. Let them know that everything eventually goes on sale. Use newspaper circulars to teach this principle. Show them their favorite cereal in the grocery store and let them see the price in the store. Then show them a sale circular for the same product for less money at another store. Then go to the other store and buy the product (using coupons of course). This lets them see that they never have to pay full price, and they can use coupons on sale items to multiply savings.

6. Teach them about commercials. From the time they started watching kids' television, tell them the difference between content and a commercial. Let them know that commercials are trying to get them to give up their money. So, here's another mantra. When a commercial comes on, train your children to recognize what it really is. Here's a suggestion for a mantra when a commercial comes on:

Parent: What's that?
Child: A commercial.
Parent: What are they trying to do?
Child: Get our money.

7. Let them see you deposit money in the bank and pay bills. Most children see their parents take money out of the ATM, but with automatic deposits and paper transactions, they don't often see you put money in. Take some cash to the bank and let your children see you deposit it. In this way, you show them that you can't get money out unless you first put money in. Also, let them see you pay bills. Now and then, I take cash to their pre-school and let them see me pay the bill in cash. Their eyes get really wide when they see the huge wad of money being forked over. In this country, 9 times out of 10, how much education you have is inextricably tied to how much money you are willing and/or able to pay for that education. Children benefit from being aware of this connection.

8. Save money in a big glass jar. Piggy banks are nice, but kids need to see money accumulate in order to understand how that happens. Instead of a piggy bank, help them put their money in a glass jar so they can see it add up. (The smaller the jar the better, at first, because it looks like a lot more money.)

9. When the plate is passed, let them donate. Help them donate a percentage of the money they get as gifts or whatever. We use the 10% rule, helping them calculate 10% of each dollar for the collection plate at church. This can be done for any charitable organization that you and your family support.

10. Pay them for working in a business. Most families these days have some kind of small business at home. When my kids were just 2 years old, they started emptying the trash in the home office for a quarter. This money goes into their money jar right away. Make the chores age appropriate, but remember that they don't really have to accomplish much to teach the lesson. If my son empties a trash can with 2 sheets of balled up paper in it, or my daughter does something as simple as wipe off the window sills or put all the pens in the pen holder, they still get paid. This teaches them that they have to work for money. If you connect the task to your business, it also teaches them a little about entrepreneurship. (You may also be able to deduct these payments on your taxes. Check with an accountant first.)

Unlike with work for the business, we do not pay our children an allowance or for chores around the house, because life doesn't work that way. Mommy doesn't get paid for sorting the laundry, and neither will you. When they ask for money, we send them into the home office to clean it up, AFTER they've done their chores. Then they get paid.

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