Dad’s laid off, Mom has to go back to work, and the kids can’t afford the newest video games or sports equipment. Everything in the pantry is generic, and the yearly family trip to the beach has been cancelled. To a kid, this can feel like the scariest time in their life.

As a parent, the need to protect your children from harm is constant. You want to do everything and anything to shield them from the scary parts of life, especially this turbulent economy. But kids read papers, they talk to their peers, and not having Mom and Dad be honest with them about what is occurring in their home economics, is scary.

While your children do not need to know the balance of your checkbook, they do need to know where their family stands economically. Often times, the fear in your child’s head is much bigger than the actual situation. The best part of children are their imaginations, but because of those, your children could be imagining a much bigger and scarier situation than what is actually happening.

Being up front and honest with your children about what is happening will not allow empower your children to understand how they can help, but it allows your family to bond on a deeper level. Your children need to understand exactly why they cannot do as many of the monetary things as they did in the past. They also need to know ways in which they can be helpful to your new family situation.

Giving your children the power to help, and the power to understand, is not passing the burden to them. Often times, it relieves their fears. Most children tend to imagine the worst possible scenario, and think that applies to them. In reality, the worst possible scenario hardly ever happens, and comforting your children with the reality can help them more than hurt.

Sit down with your children and have a family discussion about the things that need to change in your household because of the economic climate. Ask for their input and suggestions on ways to make the situation better. Give them options so they feel empowered and an active member of the family.

While you can attempt to guide what they do or do not know, honesty is often the best option for alleviating the fears of your child. Many children will be relieved to know the truth, to know that you trust them, and to encourage them to help however they can.

Being honest with your children about this tough economic time can only better prepare them for their financial future. It allows them to understand that money is not always so readily available, and gives them a great sense of inclusion and contribution.