I don't have children. My husband and I have two dogs, who pretty much think that we are OK as long as we show up periodically and drop food into their bowls. My husband has children from a former marriage, but he was blissfully, gainfully employed when they were young, so he is no help here. So we won't presume to think that we know how to talk about a job loss with your children.
Fortunately, there are wiser souls than we are thinking about these matters. Check out this article: Job Loss Should Be a Family Matter, which is full of advice for parents. Some of the tips that I really like are to let kids offer advice so that they feel like part of the team; to let older family members talk about living through tough times; and to have continuing conversations about money to keep the dialogue going. I would be very interested to hear from those of you who are parents. What you have told your kids? How did they react? What would you do differently?