Children and Money

Gratitude versus Entitlement

Gratitude Versus Entitlement: 5 Steps to Raising Grateful, Financially Confident Kids

As parents, we do everything possible to protect our children and shower them with our love. Sometimes, we go too far and create entitled children, rather than grateful children. Children who receive everything they want and don’t understand that money is finite. And even worse, they don’t know how to handle it properly.

Parents want to give their children the world. I want to give my daughters the very best too, but I know that doesn’t mean saying “yes” to everything they want. It means saying “yes” to preparing them to thrive in this great, big world we live in.

Too often I’ve met with clients who spent all their money making sure their children have everything they desire and neglected to prepare for their own retirement. Their children are entitled and keep making poor money decisions, expecting Mom and Dad to bail them out again.

Five Steps to Raise Grateful, Financially Confident Children

This has become a common problem and one we need to change. Here is how you can take your children from entitled to grateful and financially savvy.

1. Moratorium on Discretionary Spending

For one week (or more), spend money only on necessities or non-discretionary items, such as bills, gas and groceries. No shopping sprees or dining out. Use this time to figure out your budget and set goals.

2. Set Goals: Family and Individually

My father taught me the best way to make money decisions is to align them with my goals. Otherwise, it’s too easy to spend without regard. Now, you can ask yourself, “will this bring me closer or further away from my goal?” When you don’t have goals, it can be very hard to persuade yourself to put down an item, especially when your emotions are high.

You should ideally have a budget, so you know exactly how much discretionary income is available for goals. You can use my simple budget worksheet to help you figure this out. Once you know how money you have to play with, set save, spend and share goals for the family.

Once you’ve created family goals, it’s time to set individual goals with the children. In my Setting Save, Spend and Share Goals with Your Children post, I outline the process for you.

3. The Best Answer to I Want!

Your children are still going to find things they want you to buy them. You need to break the cycle of always giving them everything they want. This doesn’t make you a bad parent; it makes you a good parent. The best answer explains why you’re CHOOSING not to purchase the toy. “I like this toy too. But I’m really looking forward to going to Disneyland with you this summer. I can’t wait to see Mickey Mouse! Our trip is so important to me, which is why I’m choosing to go to Disneyland with you over buying this toy.”

4. Earn Money

Kids need a way to earn money, so they can start making money decisions on their own. I’m not a fan of traditional allowance, where parents give kids money for no reason. In our home, I have a weekly job list. Lauren and Taylor post for jobs and earn money by completing the task to my satisfaction. Figure out a way for your kids to earn money from you or encourage their entrepreneurial spirit and create a way to earn money from others.

5. Demonstrate a Grateful Attitude

Gratitude is so important. I want to be sure the girls appreciate our many blessings. I refer to ourselves as “lucky duckies” to emphasize our good fortune. It’s easy to get caught in the spend cycle, but when you appreciate and value what you do have, it becomes easier to stop needlessly spending. Be sure your children witness you being grateful every day and ask them what they are grateful for too.

These five steps will help your children go from acting entitled to being grateful and money smart.

Shannon

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February 1, 2013  •  19 Comments  •  Children and Money

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  1. Friday, February 1st, 2013
    Great post Shannon! Traditional allowance wasn't part of our childhood either, although we did pretty much look after everything in the house, since both of my parents worked full-time since I can remember. We did receive money at Birthdays and Christmas from parents and grandparents and my father usually convinced me to put a good chunk of it into my bank account. I don't remember ever feeling deprived yet we didn't shop a lot. We were a blue collar family that didn't spend much on anything. At age 13 I started my first job as a cashier and pretty much worked consistently all through highschool and college. I don't know. Maybe that is why once I made my own money, years later, I spent it and spent it.
    • Friday, February 1st, 2013
      It is so easy to slip into a spend mindset, harder to escape, but you're proof that it is absolutely possible! One thing I stress with the girls that handling money is about choices. We can't always get everything we want and sometimes have to make an either/or choice.
  2. Tuesday, February 5th, 2013
    Great post! Glad to have found your blog.
    • Tuesday, February 5th, 2013
      Thanks Michelle! I appreciate you stopping by.
  3. Tuesday, February 5th, 2013
    This is a great post! It's hard to teach kids about money, but i'm trying. My three year old gets excited when she gets her college 529 statement in the mail. First, she loves getting mail period. Second, she loves when I read her the balance!
    • Wednesday, February 6th, 2013
      That's fantastic, Holly! It's great you're already planning for her college education, and I love her enthusiasm for a healthy balance. :D It definitely takes persistence to teach kids about money, but they do absorb the lessons. Your hard work will definitely pay off.
  4. Tuesday, February 5th, 2013
    Great Post! Thinking back, my parents didn't have a whole lot, and whenever I asked for anything, one of the things my parents were really good at was teaching me to delay gratification. A couple of times a year, they would reward me with a little something, either for a good report card or something. And since I knew I wasn't going to be getting what I wanted for a while, by the time it came around, I had to be really sure that's what I wanted. Nowadays, I see with my 2-yr old, we have aunts and uncles and grandparents to contend with. Not that there weren't any before, they just seem to have to more gifts now. Not that I'm jealous or anything :)
    • Wednesday, February 6th, 2013
      I see this time and time again. Because parents made kids delay their gratification whether by necessity or choice - the kids were so much clearer on what they wanted. I think that is so important. We need to slow down and figure out what we really want than work toward earning it. It makes it so much sweeter when we earn it. And I don't feel deprived when I'm working towards and eventually earning what I truly want. Instead I feel a lot of joy and a great sense of accomplishment.
  5. Wednesday, February 6th, 2013
    These are great tips for kids. There are so many things I wish I had learned when I was growing up that might have saved me from making certain financial mistakes.
    • Wednesday, February 6th, 2013
      Thank you! It's my mission to help parents have these kinds of conversations with their kids as I want to help prevent a new generation from making common money mistakes.
  6. Wednesday, February 6th, 2013
    I don't have kids but certainly grew up very entitled. My parents made sure we knew we were privileged, and din't buy us brand clothing or the last gadget, but if we wanted to play tennis, have piano lessons and go to the US to learn English, it was fine.
    I am not sure how I would manage an allowance for kids, I think it would be something similar to what my parents did. I had a pretty small allowance (for doing nothing) and my friends had much more, so I started baby sitting and working to level with them. Then realized the value of money and that I didn't want to be like them. But I think a kid should still have a little money for treats once in a while, just for being a kid.
    • Wednesday, February 6th, 2013
      I am a huge proponent of giving kids little surprise gifts; it's part of the joy of being a parent! Allowance can be tricky. My girls enjoy the freedom of being able to earn a little or a lot - especially when they have some big goals they want to achieve. I like them wanting to earn money to buy what they want, rather than expecting me to buy it for them. This way it is also sweeter when I do buy them little things for no reason!
  7. Wednesday, February 6th, 2013
    That is so true about being grateful. I don't think we'll ever have an elaborate swing set or play house in our yard. Right now, it is a treat to go to the park, but would probably be boring if we had the stuff in the backyard. It is hard to make your child see how lucky they are in relation to those who are less fortunate, but we are trying our best to do that.
    • Wednesday, February 6th, 2013
      It is more fun to go to the park than play in your own backyard! It can be difficult for young children to grasp their good fortune, but I know the girls learn best from observing Mom and Dad. We always make a point to talk about how lucky we are.
  8. Saturday, February 9th, 2013
    Oh man, I definitely struggle with this and swing between the two on the spectrum. I know I am blessed in many ways but also am typical Gen Y wanting it all right now.
    • Monday, February 11th, 2013
      I completely understand! Refraining from buying things we want isn't easy. For me, knowing what would make me the happiest and working towards achieving it, helps me keep my perspective. Everything else becomes far less important. Eventually, it becomes very easy to walk away without feeling an ounce of deprivation when I focus on what I really want and hold on to that thought.
  9. Friday, February 15th, 2013
    Great point about introducing the concept of kids earning money. My daughter is 8 and loves to ride horses and take lessons, which can get expensive as you can imagine. Our neighbor has 3 horses and is gone a couple weeks every month and has asked my daughter if she can take care of the horses when he is not home for $5 a day which just so happens to pay for her weekly riding lesson. It has been a really good thing and has taught her the value of a dollar and how she can work hard for a goal and earn the money to do the one thing she loves. She no longer feels entitled to horse lessons but rather has a sense of accomplishment in earning the money herself.
    • Friday, February 15th, 2013
      I love it! What a great opportunity for your daughter. I think once kids realize how good it feels to earn money then choose how to spend it - they really begin to understand how money works, which is, of course, what we want as parents! If we hand them money whenever they want and make all the money decisions for them - we really can't be surprised when they make poor money choices when they leave home. Your daughter will definitely be ahead of her peers when it comes to earning and handling her money.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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