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Lori and Marek Fuchs have never fought in their 16 years of marriage—except over money. In this column, Mr. and Mrs. Fuchs, a real-life married couple with three kids (ages 11, 7 and 5), articulate their very different approaches to personal finance. Last round, they clashed on whether couples should have secret (from each other) bank accounts.

This round: He says, “Our family budget is getting tighter, but we don't need to explain this to the children.” She says, “Not explaining the situation makes it worse.”

Mr. Fuchs says:  Things have obviously been a little lean around here, fiscally speaking, but we’d be crazy to let the kids in on it.

For one, just as good times pass, so do bad.  You tell me if Warren Buffet’s Berkshire Hathaway (Stock Quote: BRK.A) is going to be stumbling around forever. No? Well, we won’t, either.  Since the slowdown will be over before we know it, it’s hardly worth the drama of telling the kids we have to stretch a buck. Kids can’t keep anything in perspective. Telling them that times are tough and we have less to spend, including at Toys R Us, will set off ten million alarms in their combustible little heads. We’re going old school and keeping a stiff upper lip on this one, honey.

Mrs. Fuchs says:  I find it hard to believe that they are not going to notice something is going on in the world, let alone our own family.  Everywhere you go now people are talking about this recession.

It is a hard balance to strike. We don’t want to overwhelm our kids with difficult information, but at the same time the kids often know more than we realize.  They just try to make sense of it with their young uninformed minds and often come to the wrong conclusion.

That’s why we have to talk to our kids about what is going on, but in a way that won’t overly scare them or make them think that they have to take care of us because we’re falling apart.

The Child and Youth Well-Being Index Project at Duke University recently posited (pdf) that nearly all family economic progress in the past 35 years could be wiped clean over the next 24 months.  Excuse me while I hyperventilate!

Mr. Fuchs says:  What is that alarmist report from a bunch of professors, honey, the new bedtime reading?  Puh-lease. Talk about good intentions giving kids nightmares.

Back in the day, parents barely told their kids when there was a World War going on.  Now we are going to give them nightmares because the gross domestic product is ticking down for a few quarters?  Spare me.

Mrs. Fuchs says:  Ticking down? That’s the understatement of the year.  Part of the reason the nation got into this financial mess is that everyone was spending like a kid, with so little savings.

Look, there are ways to tell kids things so that they don’t have nightmares and we can make it a teaching moment.  Tony Taddeo, the director of financial planning at Financial Planning Associates in Tarrytown, N.Y., says that in many cases, the more kids know the better.

“It will shape their financial future,” he says, if they learn through their parent’s financial struggles, for example, “what the difference is between a `want’ and a `need.’…[or] …why you can’t have a Porsche at 16.”  With our three younger ones, of course, it would be an iPhone, but you get the point.

So let’s decide together what they can understand and only what they need to know about our own finances.  We’ll stay calm and optimistic ( no panic attacks or moaning about financial disaster in front of them!)  and we’ll put it in a larger perspective so that they learn something about managing money for their own futures.   

Mr. Fuchs says: I guess I can see tha-

Mrs. Fuchs says: I’m not finished.  One of the best lessons you can teach children is that you can surmount a challenging time.  If they don’t know you are in one (except what they sense through your grumpy demeanor) they won’t know that, in the end, you can always get yourself out of one.     

Editor's note: Interested in talking to your children about money, money worries and responsible spending? Check out MainStreet's family section before you start the conversation.

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