Billions of questions from kids

By Susan Greene
Denver Post Columnist
Article Launched: 09/25/2008 12:30:00 AM MDT

"Mom, what's a bailout?"
This from my 5-year-old first thing Tuesday morning.
As if Hurricane Ike weren't tough enough to explain, now come questions about a financial crisis that I find myself straining to answer.
So I turned to the experts.
"Off the cuff, I don't know how I'd respond," admits Tanya Breeling, vice president of Denver's Young Americans Center for Financial Education, the world's only bank for kids.
Her boss took his own stab:
"We're saying this is a monumental change in the economy that's about a credit crunch where banks are tightening standards so that average people and even banks can't get credit to meet demands. And if people can't get credit to spend, the whole thing shuts down," explained Young Americans president Rich Martinez in a riff I'm pretty sure my preschoolers wouldn't understand.
Jim Fay, a Golden-based parenting expert, offered easier advice:
"Keep it really, really simple," said Fay, author of the recent book, "Millionaire Babies or Bankrupt Brats? Love and Logic Solutions to Teaching Kids About Money." "I would talk about how banks and government made a bunch of mistakes that have made it hard for the rest of us. And then I would say we all need to do our part to fix the problem at home."
Too often, money talk is considered taboo with kids.
"We speak with them about sex and drugs. But we don't talk about mortgages or debt," said Martinez, who shares with his 9-year-old details about his income, the family's house payments and other expenses.
Experts urge openness about both family and national finances not just because kids perceive our stress about something bad and complicated going down in the world. We should talk about money so they understand why we leave them to go to work most mornings. And also to keep them from growing up financially illiterate, lured by or even suckered into loans they'll never be able to pay.
"These are lessons that, if we don't want them to repeat them, we need to share with our kids," Martinez said.
And there's another reason for openness.
Whether or not they grasp the weight of a $700 billion bailout, our kids, their kids and maybe even their kids' kids will have to pay for it. We owe them an honest explanation for why universal health care and meaningful educational reform suddenly have fallen from the top of the nation's priority list.
The Young Americans Center was founded in 1987 by cable magnate Bill Daniels, who believed the U.S. economy was "the eighth wonder of the world." The center's mission of celebrating free enterprise has become tougher recently as young clients have begun wondering if their savings are safe and parents are cutting allowances.
"If anything good comes out of this mess, it's that this is a great time to set limits for our kids about money," Fay says.
Fay's parenting approach emphasizes the value of "affordable mistakes" — allowing kids to fail while the stakes are still low, and teaching that there's no safety net for bad decisions. Bailout, the theory goes, is not an option.
But now that failure apparently isn't an option for the nation's financial giants, kids and their parents may be scratching their heads in dismay.
"The scale is so large that mistakes are no longer affordable," said Fay's co-author, Kristan Leatherman. "What happens when the people in charge of our money make poor choices?"
Our kids should have lots to say about that.

Susan Greene writes Sundays, Tuesdays and Thursdays. Reach her at 303-954-1989 or greene@denverpost.com.