Talking to a Child About Home Foreclosure

I received a heart wrenching email from a reader that I’m going to call “Peggy.” Here’s a few excerpts from that email:

[…] In short, we are going to have to be out of our house by October 24. We’re going to move in with [my 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 eight year old son].

So here’s my problem: we haven’t told [our eight year old 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 were moving to a new place and we’re going to live with [my brother] 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?

This email (which, admittedly, I edited a fair amount to protect the privacy of Peggy, her son, and the rest of her family) caused a more painful reaction for me than anything I’ve read since I’ve started writing The Simple Dollar. I look at my almost three year old son and I can’t imagine having to explain to him in a few years why we have to move out of this house that he’s grown up in.

Needless to say, over the last few days since I received the email, I’ve spent a ton of time thinking about Peggy’s situation. It’s the first reader email I’ve brought up with my friends, and I also mentioned it on Twitter, just 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 their basic elements of security in the world.

Some further reflection brought me to a different conclusion, though. My thoughts actually began to turn around when I was taking my son to daycare. He’s just a bit short of three years old. 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 – 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 two year old son 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 eight year old should be able to understand it.

I asked a few people I know who are actually parents of children between the ages of seven and nine how they would handle it, and they almost all 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.

What I Would Do in Peggy’s Shoes

1. Spend a lot of quality time with my child

Even more than you do 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 during this time so that the transition is easier. It is at least somewhat likely that your child sees your current home as a touchstone, and it’ll be very hard for your child to separate, 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.

2. Cement the concept of a home as something you buy and sell

Point out where other houses are for sale and explain that someone is trying to sell that house. If you see a “SOLD” sign, point out that someone has bought that house from someone else that’s trying to sell it.

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

3. 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 they live in now is too expensive. They don’t have enough money to keep paying for that house. Do it in a caring way – a serious talk, but without overwhelming emotion and no aggression at all.

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 we got to make little payments on the house at first, but now the payments are bigger and we have to choose between things to spend our money on. My two year old could largely understand this and several other parents have assured me that their seven, eight, and nine year olds could get it, too.

4. Make the changing experience seem as fun as you can

Get your child involved in packing things up. Take pictures of box contents together for easier packaging. Be there for your child if your child has a hard time with this – the child 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 probably really need that emotional safety at this time.