The current economy has put a great strain on many families. There are so many layoffs and foreclosures that it makes it hard for people to think about buying things that they might want for recreation and pleasure.

As parents, we feel the strain many times when we have to sit down and pay the bills. The money that used to stretch pretty far a year or so ago doesn't in the current economy. We find ourselves trying to make tough decisions about our bills and being able to put groceries in the house and try to have a little bit of money left over for unforeseen things that never fail to come up.

In the current economy, we have become leery of being able to take a vacation or buy things that we know our family wants. We start separating things into two categories, wants and needs.

The problem with wants and needs is that one category has become stronger than the other and tips the scale when we are trying to make decisions about our spending.

It is hard enough as an adult to make choices that you don't want to when it comes to spending money responsibly. Pay the mortgage or take the family to a theme park for a day ? Go to dinner at a nice resturant or spend that money making dinner stretch for three nights ? Buy that really nice jacket or break the money spent for that on a couple of nice long sleeve shirts ?

Probably the hardest part about all this is that a year or so ago, you wouldn't have had to make those types of choices. You had wiggle room in your finances and could just do things on the spur of the moment.

The Change in the Economy also affects the kids

So as we discussed earlier, the change as in the econmy finds you having to make tough choices. Imagine how your kids feel when things have changed. They don't understand that those new $200 pair of tennis shoes are no longer acceptable as something you as a parent can buy for them. They don't understand that though you took a family vacation every year that this year there won't be one. The designer jeans that they love to wear, the money can be used to buy a couple of jeans at another store.

Things have changed for them as much as it has changed for you. Kids that are very young don't see the changes however when you have preteens and up, it is important to let them know what is going on. Give them some understanding.

With the economy the way it is, it is a good time to introduce them to the wants and needs categories and let them understand what the differences between them are. It is also important to let them know that as a family they are part of making the choices that complete these categories. Families are stronger when they work together.

Let's take a look at wants and needs

Wants- Wants are anything that could be considered extra. They are not a necissity. They could be movies, games, vacations, anything that could be considered extra. They aren't going to affect you if you don't have them.

Needs- Needs are the things that you have a dedicated responsibility for. These are bills, healthcare, groceries, gas, and other things that are needed to make your family stable and complete. They are the have too's in life.

On a scale, needs usually outweigh the wants. They are important in keeping food in the house, a roof over your head, and car in the driveway.

After explaining wants and needs to your children, put them in a sentence and let them see the difference.

1. I want a x-box but I need to put groceries in the house.

2. I want a new leather jacket but I need to buy school clothes and supplies for school.

Make a point to let them know that wants are not as important in taking care of the things that are needed. This is especially important in this economy where you used to be able to spend $150.00 for groceries but now you are spending up to $250.00 thanks to the rising cost in groceries. Where electric and water bills are going up.

Kids don't need to know the in's and out's of what your whole financial situation but what they need to know is that the responsibility that you carry must be taken care of for the benefit of the family. Teaching them this now may also help them make choices when they get older and become adults.

Just because you can't afford it right now doesn't mean that you can't get it in the future.

Even though we are all struggling with keeping up with the things we need to take care of, it doesn't mean that in the future we can't get something we want. And explaining this to your kids means that they know that, that x-box in their future isn't forever closed behind a door.

One of the ways to do this is to get the whole family involved in working towards what they want. In our household, we want to have a Wii and Wii Fit. Right now that is something that I can't just go out and buy. We, as a family, are working towards getting that Wii together. We have an envelope set up and whenever there are a few extra dollars, we put it into the envelope. Yes, it is going to take a lot longer to get the Wii than any of us wants, but we are working together to do it. Once we have the money to get the Wii, it will be something even more valuable to us because we worked together to get it.

The same can be true if you have a preteen who has to have that Designer pair of jeans or something else they want but don't need. Give them chances to earn money by doing chores or something like that. If they want those jeans bad enough, they will work for it and save their money to get it themselves.

It is important to teach kids financial responsibility and this current economy is a great way to do that. You are setting stepping stones in front of them that they will be able to use for the rest of their lives.