When Judith Edmond talks about personal finance at school, it's more than just another academic subject. The recession nearly left her homeless last year. The 18-year-old single mother says her family almost lost its house to foreclosure. To help save the property, she and her 10-month-old son moved in with her aunt so her mother could make extra money renting out Edmond's room.
"Everything costs so much now — clothes, food, Pampers and all that. The economy is bad," the high school senior said earlier this week. "I work at Universal, but I can't get more hours to make any extra money. It's really tough."
Edmond is experiencing the nation's financial crisis up close and personal, but the slumping economy affects young people at all socioeconomic levels and in all age groups, experts say.
"It's obviously on their minds, from what they're saying and the questions they're asking," said Rosanna Jacobsen, an Orlando banker and president of the Florida JumpStart Coalition, a nonprofit group that conducts personal-finance courses in local schools.
"What happens when you write a bad check? What does bankruptcy mean? Can you get in trouble and go to jail for that?" she said. "The questions often have a personal tone, like they're hearing these things or actually living them at home."
Even young children can sense when their parents are wrestling with financial problems. Just talk about money in a roomful of second-graders, Jacobsen said, and you'll discover how closely they observe and listen to their parents.
"One little girl, probably 7 or 8 years old, told me, 'When we don't have enough money, my momma will just charge it,'" Jacobsen said. "'But when the bill comes in, I don't understand how it gets paid or who's going to pay it.'"
The recession, which this month becomes the longest on record since 1921, has been an especially rude awakening for some teens used to affluent lifestyles. Cash-strapped parents suddenly can't afford to bankroll their children's expensive clothes, cars, high-tech toys and other big-ticket items.
"I've seen some pretty bad reactions," said Laura Grashow, a Miami psychologist who specializes in children and families. "There's a lot of resentment, with the child blaming the parents, not the economy, for their financial problems.
"Sometimes, it's just adolescent rebellion. But sometimes, it's a problem in the family dynamics. Put together, it can be a strong cocktail that leads to a lot of acting out."
Still, grown-ups must be honest and open with their children about finances, experts say. Otherwise, serious problems can develop.
Most parents have a natural aversion to such talk: A recent Marist Poll showed that nearly 60 percent think discussing money with their children increases the family's anxiety rather than alleviates it.
"Parents have to get past the discomfort they may feel about talking to kids about finances," said Alan Keck, a psychologist in Altamonte Springs, Fla. "And it has to be geared to the developmental level of their child."
What to discuss with kids?
For younger children, the talk should focus on practical issues of why the family can't spend money on certain things like it used to, he said.
With older offspring, parents can get into more detail about the economics of the situation and how the teens can help the family.
"It's just like talking to your child about sex or religion or anything else that is complicated," Keck said. "It's something that parents eventually have to do."
Often the results are better than parents could ever imagine, said Grashow, the Miami psychologist. "I've seen teens who really step up, recognizing their parents are suffering, realizing they have to chip in and help out."
Caroline Gregory frets about the skyrocketing costs of a college education. But the 17-year-old junior at Winter Springs High School says her parents taught her well about managing her money.
She has a savings account, and she socks away cash from every paycheck she gets as a veterinarian's assistant. She even has a mutual fund, established by her father to teach her about investing, though it has taken a beating during the stock market's slump.
"I'd put money in it from my allowance when I was little, and I used to put $25 in it every pay period after I got my job — but not anymore," she said.
"Now I just put it in the bank, where I can at least make some interest on it. Things were exciting when the stock was doing well and making money. But now, well, it kind of makes me mad what's happened."
Educators say young people increasingly need to develop money-management skills, which is why many high schools have made personal-finance programs part of the academic routine in recent years.
At Evans High School, students such as Judith Edmond — the 18-year-old single mom — just completed a five-week class sponsored by Junior Achievement and the National Endowment for Financial Education.
"These kids are so sharp, and they are so open," said Jackie Booth, the endowment group's chairwoman, who taught the Evans course. "And they really relate to these money issues. It's not theoretical to them — it's their lives."
(c) 2009, The Orlando Sentinel (Fla.). Source: McClatchy-Tribune Information Services.