Q. Cash is short right now, and when our kids, 6 and 4, ask to do things we used to do, we have to say no. How much should we explain?

A. Kids can generally handle the truth, even when it's bad news. What they can't and shouldn't have to deal with are the adult worries they can do nothing about. You can go over the basic facts of your family's finances -- that you have less money right now than you did last year -- but spare the details.

If your hours at work have been cut, you might, for instance, tell them that your job is paying you less money so you have less money to spend on extras. But assure them that you have enough for food and a home, and omit the discussion about whether you'll be able to afford both new tires for the car and the family's yearly vacation at the lake.

At the same time, find substitutes for some of the high-cost amusements you've cut back on. If the $40 you used to spend on four movie tickets plus popcorn, drinks, and $3 boxes of Raisinets is now out of the question, a family popcorn-making fest before a video may prove just as diverting. Or if you've put an end to your weekly Friday-night dinner out, plan a family picnic on the living room floor instead.

The key is your attitude, because your kids will take their cue from you. If you approach these changes in an upbeat manner, your kids will too, and they won't feel deprived. They may even learn some lessons about both thrift and your family's values that will still be of use when the family's back in the black.

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