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October 2, 2008 -- (An opinion from CAJump$tart Advisory Group member Lori Mackey, Founder Prosperity4Kids, Inc.) -- How you talk to your kids about the financial crisis depends on how it is personally affecting your family. Children do not have enough knowledge about money and the financial crisis to understand what is going on. This is a complicated issue for the majority of kids and they will have a hard time understanding. However, no matter what your child knows, take this time to assure your children that you are there to protect and take care of them. Children did not create the problem adults did. The lesson for parents is to take this time to start teaching your children differently when it comes to money!

For all ages, my suggestion is to not create fear and insecurity around this situation but look for solutions on how you can teach your children better habits so when and if this happens in their adult life they will be well prepared.

There is no doubt that things will change due to the economic conditions in our country, and change is good, families can get back to what is important. Which is teaching life-long financial habits that create security in the future and we can all become better role models for the next generation.

There are steps you can do to help your children become more financially aware of what is happening around them and best of all create responsible financial habits children can live by.

1. You can start to teach the concept of spending less and saving more. Living within your means is a security issue for you and your family. Your children will adapt to the situation and support whatever the family needs to do. You are not depriving your child of anything if you stop spending money; you will actually be teaching your children valuable lessons. Stop giving your child $20 to go to the movies and invite their friends over for a pizza, popcorn and a movie for $3 apiece. Be creative, have more family meals together, have the kids' brainstorm how they can save money and have fun, let their imaginations go wild, and create memories instead of more debt.

2. Create the habit of saving, and living more simple conservative lives. Set goals as a family to save money in different ways, what can you do differently around the house, is there anything you can cut in the monthly expenses that are not necessary right now. When you learn how to live with less, it teaches you the value of what you do have. We really do not need most of the things we think we need. Make it a habit too automatically save money on a weekly or monthly basis. Start out with a little, increase with time, and teach your kids to do the same. This is the most valuable financial habits you can teach your child and the people who practice this habit will have more options through times like this.

3. It is time to enjoy the simple things in life, go to museums, galleries and visit the zoo. Make plans with friends to have a picnic and play games outside. Plan a night to lay in the front yard, look for shooting stars, and eat 'so mores!' The time you spend with your children is more valuable than the amount of money you spend on your children. Your children will forget the materialistic items but never forget the memories. This will also take your mind off the current situation and build a stronger bond between you and your kids.

As we have heard before the most important things in life are free and in these times, we need to look for as many of these as possible. Most importantly do not spend time on the problems, spend your valuable time looking for solutions and keeping your family safe. Remember this is a cycle and we will get through it as we always do.