Talk to your kids about money or they’ll develop their own, false theories.

When family finances change for better or for worse – with bank balances seeming to cause sickness and those reflecting sudden health – it would seem responsible parenting to protect our kids from the details. Why should they worry or – even worse – begin boasting about their family’s good economic fortune?

Because they probably know, anyway.

Kids pay close attention to money issues at home, according to research from North Carolina State University, and when we leave them in the dark, they develop their own – usually false – theories.

“Even as young as 7 years-old,” says Professor Lynsey K. Romo, who lead the study, “kids can be stressed out about money because they don’t know they’re going to be okay. Parents don’t know what to say and it’s a taboo topic, but we have to give them some sense about what’s going on. Some parents talked about intentionally concealing information because they don’t want to scare kids, and it backfired.”

Kids who are protected from their parents’ job losses or even from the news or a raise at work or a promotion will come to their own, erroneous conclusions, says Romo, who spoke to 136 kids between the ages of 8 years-old and 17 years-old.

“One child was worried they’d have to sell the family dog because he saw dad wasn’t going to work anymore,” says Romo. “If we don’t speak to them, they come to conclusions that are scary.”

And families heading in the other direction aren’t exactly safe from their kids assessing the situations. 

“You don’t want kids to brag,” says Romo. “Parents get worried about telling kids that things are good because they talk amongst other kids.”    

So what do you do? If you’re facing hard times, says Romo, and you need to downsize, explain in a positive way that things will be okay but you’re just adjusting your lifestyle. Even if the situation is one you brought upon yourselves, use it as a teachable moment by explaining you bought a house or car or home entertainment system you couldn’t afford, and teach by example.

If you’re enjoying your new economic bounty, you’ll want to explain now is a time to be grateful because others don’t have it so good, says Romo. Perhaps make sure your kids know even your good luck could run out, which is why you’re saving for the future and planning ahead.

“Be deliberate so kids aren’t scared,” she says.