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"Mom, how did the collapse of the non-bank asset-backed commercial paper market cause a liquidity squeeze in inter-bank lending?"

"Dad, what are credit default swaps, collateralized debt obligations and mortgage-backed securities?"

Adults are having a tough enough time grasping how the sub-prime crisis snowballed into stock-market mayhem, massive job losses and a slumping economy. Try translating all that for kids around the dinner table. But those who know something about money - the business professors, the bankers, the financially literate - see this downturn as an opportunity to teach fundamental lessons about budgeting, savings, job security - and empathy.

"My neighbourhood seems to have a lot of auto workers and our kids have asked about job losses," says Casey Cosgrove, the director of the Canadian Centre for Financial Literacy and a father of three children ages 11, 9 and 4.

"It's difficult to translate the current economic woes into terms they might understand without depressing them. But there are a lot of teachable moments we're trying to expose them to, without burdening them," says Mr. Cosgrove, who lives in Burlington, Ont.

For Mr. Cosgrove, it begins with linking the sub-prime crisis to something many kids relate to: cellphones. It's often peoples' first taste of financial obligation - making monthly payments, getting caught in higher-than-expected rates and, in some cases, trying to cancel plans only to find out they're trapped into three-year agreements.

"I tried to explain that people sign up for things they don't fully understand, or know the consequences of. If we don't learn some of these things now, we might make financial decisions or enter into agreements we don't fully understand. And the sub-prime crisis is just like that, but on a grand scale."

He's teaching his kids about budgeting and financial planning by giving each of them three jars labelled Save, Spend and Give. Any extra money from, say, a paper route, is divided into the three categories - one as a long-term nest egg, another for treats and a third for donating to a food bank or a friend in need.

Time-pressed families and a cultural shift mean basic conversations with kids about money have fallen by the wayside, says Scott Ward, a financial adviser with brokerage Edward Jones and father of two kids, ages 3 and 13.

"I think it's something we've overlooked, or even been afraid to talk about. Money isn't always easy to talk about sometimes. But kids want to learn," says Mr. Ward, who has held workshops for parents and children on the topic. (One of his lessons: the economics of a lemonade stand.)

Like Mr. Cosgrove, Mr. Ward stresses the importance of savings to his children. When his 13-year-old was 9, Mr. Ward sat him down and asked him to draw his dream, what he would most want in five years' time ("a digital camera") and in 10 years' time ("my own house"). Here's what those things cost, he told his son. If you save your money, you could afford these things. Spending money goes into a piggy bank. One chunk goes to charities such as the local Salvation Army. Long-term savings, from birthdays or allowances, goes to the bank, where some is invested in the stock market.

The stock market?

"It's down right now. We go through the statements together," he says. He tells his son the same thing he tells clients: Mutual funds mean you share the gain as well as the pain of a company, and that "over time, if you pick good companies, they'll do well."

The value of savings - waiting to be able to afford that digital camera - is something some "very important people forgot," Mr. Ward says. So is cash flow - this summer, he plans to spend a week showing his son what money comes into the household, and keeping receipts to show what goes out. "It's important for teens to have a sense of that, so they don't start living paycheque to paycheque and going overboard with credit."

That, in a nutshell, is the teachable moment, says Rick Robertson, a father of two teens and director of the MBA program at the Richard Ivey School of Business in London, Ont.

"You just don't spend money unless you have it," he says.

His kids are well aware of the recession because it's so visible - they go to school in St. Thomas, Ont., where job losses are slamming the manufacturing town. "There's no doubt they walk the halls and see parents of people they know who have lost their jobs. ... Even just driving down the streets, it's evident the town is having challenges."

His family talks about the layoffs at home. On job losses, Mr. Robertson says, "it's really important to stress it's not an individual's fault. It doesn't make them a bad person, and their child is maybe feeling pain and suffering and perhaps anger at the parent. We've got to have some degree of understanding. The town's been impacted so much, I think they're developing empathy."

They discuss the broader economic slowdown around the dinner table. Mr. Robertson, an accountant by training, sends them articles out of the business section, and exposes them to news on television, to help explain the recession. "The economy is all around us, and it's a fact of life that we talk about it," he says.

They've learned that the value of assets - such as house prices - can go up or down. So too for the stock market. In his daughter's case, she knows that investments put aside for her university tuition next year have dwindled in the past year - "and that now money will have to come from somewhere else."

The trick, Mr. Robertson says, is imparting this kind of hard-earned financial wisdom without freaking the kids out. So he has a little spiel: "Because we're human, we have the ability to be hopeful," he tells them. "But we all have to do something ourselves to make it better."