CINCINNATI--With Christmas approaching and money tight, Cincinnati father of three Robin Marshall has had frank conversations with his children about the family's finances and the U.S. recession.

"I don't believe in hiding stuff from them," said Marshall, 48, who fell three months behind on his mortgage and car payments when his home remodeling business faltered as consumer confidence slumped in the face of the global financial crisis.

With two kids at home, aged 18 and 11, Marshall said he couldn't hide his financial difficulties -- creditors phoned his house night and day -- and didn't even try. His second job as a hotel janitor is also about to be cut back.

"I told them I was having problems," said Marshall as he waited for an appointment with his mortgage lender to discuss ways to lower his monthly payments. "They live a normal life but we put a limit on what we buy so they don't get caught up in a lot of fantasy."

How much to tell the kids has become a big question for American families as the nation wallows in recession and the Internet and airwaves are filled with stories of lost jobs, home foreclosures, business failures and financial crises.

While families might shelter children from temporary money trouble, financial advisers say anecdotal evidence that Americans are sharing the grim economic news with the kids suggests families are so determined to cut back on spending that they want everyone to understand the budget woes.

Cincinnati fitness instructor Gerry Schulze said she and her husband have talked about money with their three small children so they will be prepared for a smaller Christmas.

"We said this is a tough year, these are tough times, we talk about the prices, the economy, our investments," said Schulze, 44, as she shopped for Christmas presents at discount retailer Target.

"We don't get into all the details -- the kids are 8, 6 and 5 -- but we do talk about it," said Schulze, whose husband's income from his commercial real estate job has taken a big hit as U.S. buyers sit on the sidelines and businesses shrink.

Schulze said she has told the children about what things cost so they understand why they will get only one big present at Christmas, along with a few smaller items, why the Christmas tree is smaller and why the adults are not getting each other fancy presents.

Kids know something's wrong
While there is no data to measure how many families are talking about money problems with their children, Myvesta Foundation president Steve Rhode said a barrage of media stories about the crises in the housing, banking and auto industries means most kids already know something is wrong.

"Children are already getting it peripherally," said Rhode, whose foundation addresses global financial questions.

While parents shouldn't frighten children, Rhode said sharing household budget constraints can make it easier to pare spending and gives kids a chance to feel they are helping.

"Be honest," said Rhode. "It's not a matter of them getting a job to help pay the mortgage, but rather not asking for things all the time, or when you say we can't afford it, they understand why you're saying no."

A poll released this week showed the number one concern for American families is savings, followed closely by worries about rising prices. The poll, released on Thursday by the Wall Street Journal/NBC News, showed nine in 10 Americans believe the economy has gotten worse over the past 12 months.

The psychological impact of grim economic news means families are affected even if their finances have not changed. A poll released on Thursday by the Pew Research Center showed that while 28 percent of respondents have cut back because their finances have deteriorated, 59 percent will cut spending simply because they are worried finances might get worse.

Rhode said the fact that so many people are being affected by the recession may change the way American families behave.

"It helps children put things in context knowing what other kids at school might be going through," he said, noting that parents can request "no gifts" at a child's birthday party to alleviate the strain on those who might not otherwise attend.

Still, both Marshall and Schulze admit their honest talk with their kids has only had so much success.

"My 18-year-old is like any other kid, he wants the latest cellphone, and he just got very expensive headphones," said Marshall. "But he's got a job, so it's his own money."

Schulze has seen similar progress. "They're still asking for everything," she said. "But they are saving up now for their own Lego. They do understand that."