Growing Up in a RecessionBy
Parents, kids—we're all being stress tested these days. If talking to children about finances and our working lives was complicated before, now it is fraught with anxiety. Some parents are including the kids as they rethink their careers; others are trying to keep up the appearance of stability. Here are the stories of three families grappling with the disruptions and constraints of the Great Recession.
Reinvention JittersAdria Pearl-Belport carefully chose the moment for the talk. She and her 13-year-old daughter, Justine, were in her Lexus SUV on the way to a shop in Westport, Conn., one weekend in January when she told Justine about the unexpected and seemingly irreversible decline of her marketing firm, Van Pearl Associates. Bear Stearns, her biggest client, had collapsed months earlier; since then, other financial service firms had become wary of spending money on the promotional MP3 players and tote bags and polo shirts Adria had been creating for them over the years. She didn't know it at the time, but soon much of that branded merchandise would become downright gauche. AIG (AIG) umbrella, anyone? "It wasn't possible to recover quickly," Adria, 54, says. "This is not a good time to make cold calls. It's not even a good time to make warm calls. There's a very fine line between being present for clients and being annoying. I had decided to move on."
Adria told Justine she would reinvent herself as an agent of sorts, helping authors, consultants, and others brand themselves. Her daughter was skeptical. "I told her she couldn't change, that she didn't have enough connections to be an agent," says Justine. "I was kind of rude. I was nervous that she wouldn't do well." Adria, who has been raising Justine alone since her husband died eight years ago, was taken aback. "I wanted her to know that stressful financial situations need to be handled in a thoughtful way," Adria says. "She was very invested in my success. And she used to rummage through the merchandise I had in my office. She hated the idea that her life might change."
It has, though perhaps not as dramatically as Justine imagined. She's still going to summer camp in Maine. That's big. But she has to be more careful about what she buys, and her favorite cafÉ in Westport went out of business. The most distressing part of this new reality is that her mother had to cut back the number of hours her assistant, Sarah, works. Justine is very close to Sarah. "I come to the office a lot," says Justine. "I was really upset at first. Then Mom said I can call her and keep up on Facebook."
Now that Adria does have a few clients for her new business, Justine is feeling better. Adria is pitching herself as an experienced marketer who can use social media to help people promote themselves. Justine helped her figure out Facebook and Twitter. Afterward, Adria suggested Justine could make some money by offering other parents an introduction to Facebook. Justine thought that was a little weird. She might babysit on weekends instead.
An Upside to DownsizingNicole Tamson, a 40-year-old real estate broker in the privileged enclave of La Jolla, Calif., felt anxiety set in almost 18 months ago. As 2008 began, potential buyers of the multimillion-dollar homes she listed were hesitating, and then deals started to fall apart. By March there was no business at all. She didn't sell another house until almost a year later: it was in foreclosure, and her commission was $2,000.
The recession has been one long reckoning with expectations for Nicole and her two kids, Maguire, 8, and Payton Grace, 5. Nicole had been earning more than $250,000 a year for nearly a decade. She rented a posh three-bedroom condo with a yard. The beach was nearby. They traveled. It was a good life.
As Nicole's savings dwindled, she worked for friends off and on and even rented her apartment out on the weekends her kids stayed with their father. By June she had to let the nanny go. Then she turned in her leased BMW and got a used Volkswagen (VLKAY) Beetle. In August the family moved to a nearby one-bedroom apartment. "My kids have taken it all really well," she says. "We're not going to Toys 'R' Us, we're not flying to New York, but we're spending more time together. And they like that." After almost a year in close quarters, though, the kids are asking when they can get a bigger place. "They want to move to a farm," Nicole says. "I tell them: 'Let Mommy sell some houses first.' "
Identity IssuesEugene Schwartz worries about his financial predicament every day. But he doesn't want his kids to worry at all—they should be frugal but not fearful. Eugene has been a commercial real estate lawyer in Manhattan for more than 20 years, but commercial real estate in Manhattan gave out in September. He and his wife never lived extravagantly, but they lived well: a nice house in suburban Connecticut, two cars, two vacations a year, dinners out, son and daughter at private colleges. "Of all the roles I live, the one I cherish most is being a good father," he says. "Part of being a good father is that your children can look to you to take care of them—financially, spiritually, lovingly, emotionally. But it's been more and more difficult to play the role of provider."
Eugene had hoped to retire when his kids finish school. Now he's considering withdrawing cash from his retirement account when he turns 591/2 (and can do so without penalty) to pay for the rest of their college tuition. He won't consider having Brooke and Justin take out student loans. "My father, a man of very modest means, put me through college. That's what I owe my children. That's the deal I made with myself," he says.
Eugene has other concerns. Earlier this year, he mentioned to his daughter that work had slowed. Brooke had started school in Washington, D.C., and the two became accustomed to a daily check-in by phone. The next day, and every day after that, Brooke asked how things were going in the office. "I'd say: 'Ehhh, you know.' Then she'd say: 'It's going to get better.' And we'd leave it at that." Brooke hasn't expressed concerns, but "it's an odd thing for a kid to ask a parent," says Eugene. "Now it's on her mind that I'm not having a great day. I think that's an unfair burden."
Eugene's Depression-era father warned him that economies and markets can come crashing down. "None of us listened," he says. "Times have always been good." Difficult times may not make people stronger, Eugene figures, but "it gives perspective, and that's always good."
To see an interview with Morris Dickstein, author of a forthcoming cultural history of the Great Depression, go to businessweek.com/go/09/kids