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Talking to a child about foreclosure

Candor the best option, blogger says.

By Karen Datko Oct 19, 2009 2:44AM

This post comes from Trent Hamm at partner blog The Simple Dollar.

I received a heart-wrenching e-mail from a reader I'm going to call "Peggy." 

This e-mail (which I edited to protect the family's privacy) was the most painful I've read since I started writing The Simple Dollar. I look at my almost 3-year-old son and I can't imagine having to explain to him in a few years why we have to move out of the house he's grown up in.

Here are a few excerpts from that e-mail:

In short, we are going to have to be out of our house by Oct. 24. We're going to move in with (her brother) and his family for a while and then later try to find a place to rent.

We made bad money mistakes and we know what we did wrong. We should have never bought our house. We should have never got that mortgage. We just tried to make the best life possible for (their 8-year-old son).

So here's my problem: We haven't told (the son) about this yet. We don't know what to tell him or where to even start. This is the only home he remembers living in.

My mother thinks we shouldn't tell him anything. We should just say we're moving to a new place and we're going to live with (his uncle) for a while.

But (he's) smarter than that. He knows there is something going on and he won't fall for it.

What should I tell him?

Needless to say, over the last few days I've spent a ton of time thinking about Peggy's situation. It's the first reader e-mail I've brought up with my friends, and I also mentioned it on Twitter to try to get more angles and perspectives on it.

My first reaction was to agree with Peggy's mother and encourage Peggy to simply not talk about it. It's a very frightening time when you're losing your home. I can't imagine explaining it to a child. You're in some ways ripping away one of his or her basic elements of security in the world.

Some further reflection brought me to a different conclusion. My thoughts actually began to turn around when I was taking my son to day care. We stopped at a gas station on the way because gas was clear down to $2.89 and I wanted to fill up my tank.

I told him we were going to stop at the gas station, and he asked if we needed gas. I told him that we didn't, but that I wanted to get gas now because it was really cheap, and that way we could have more money left over to buy other things. He immediately shouted, "So we can buy more pizza with wheels!" (His favorite food is a plain cheese pizza with black olives on it -- pizza with wheels.)

My son, who is almost 3, understood the basic idea of budgeting: Sometimes you need to spend less on some things so that you can afford other things. In the end, that's the basic reason why one would lose a house to foreclosure. Conceptually, an 8-year-old should be able to understand it.

I asked a few people I know who are parents of children between the ages of 7 and 9 how they would handle it, and almost all of them provided passionate arguments on behalf of candor with the child, confirming my idea that candor is really the best approach here. To a certain point, of course.

If I were in Peggy's shoes, here's what I would do:

I'd spend a lot of quality time with my child right now. You'll need a strong bond with your child to make this go smoothly. Why? Your child needs emotional touchstones, and you need to make yourself the strongest touchstone you can be so that the transition is easier. It's likely that your child sees your current home as a touchstone, and it'll be very hard for your child to leave it, so you need to provide another rock for your child to lean on.

Spend some evenings at the park or out and about in the community doing things together, just you and your family. You can spend some evenings at home, of course, but don't spend all of them there. Try to cement that bond with your child independent of location.

I'd cement the concept of a home as something you buy and sell. Point out other houses for sale and explain that people are trying to sell them. If you see a "sold" sign, point out that someone has bought that house from someone else who was trying to sell it.

This firms up the idea that it's normal for people to buy and sell their houses. Be candid about it and answer the questions your child might have. Given Peggy's timeframe, I'd try to do this several times in the next few days.

I'd use some candor to explain the situation to the child. Simply tell the child that the family needs to live in a smaller house because the house it lives in now is too expensive. The family doesn't have enough money to keep paying for the house. Do it in a caring way -- a serious talk, but without anger or other strong emotion.

Your child is going to have questions. Answer them as simply as you can. You don't have to get into the nuances of ARMs. Just say that the family was able to make little payments on the house at first, but now the payments are bigger and it has to choose between things to spend money on. My 2-year-old could largely understand this, and several other parents have assured me that their 7-, 8- and 9-year-olds could get it, too.

Finally, make the experience seem as fun as you can. Get your child involved in packing things up. Take pictures of box contents together for easier unpacking. Be there for your child if your child has a hard time. He or she might or might not get upset during the process.

The most important thing is to be there for your child. You are that child's constant through this difficult time of change. Take that very seriously, because your child will need that emotional safety.

Other articles of interest at The Simple Dollar:

Published Oct. 17, 2008


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