Children and Money

3 Steps to Raising Financial Confident Children

3 Steps to Raising Financial Confident Kids | www.TheHeavyPurse.comLast I week I shared the unintended consequences of creating an entitled life for your kids, one where they expect things to be given to them. I believe most parents want their kids to enjoy a great life and still become independent, successful adults. Unfortunately, entitled kids struggle to transition from childhood to adulthood without their parents continuing to take care of them.

The Dangers of Snow Plow and Helicopter Parenting

As my friend, Anna, from Are Ya Gonna Eat That pointed out to me, “helicopter” and “snow plow” parents are the huge trend right now.

Wikipedia defines Helicopter Parents as Moms and Dads who pay extremely close attention to their children’s experiences and problems, particularly their education. They call their kids at college every morning to wake them up and their professors to dispute a bad grade. They hover when they need to step back.

Snow Plow Parents push obstacles out of their kids way so they don’t have to struggle to get things they want. Kids succeed but not through their own talents or hard work, but thanks to Mom and Dad. And they are often ill-prepared to face the real world without their parents still pulling strings for them.

I suspect we all probably know a Helicopter or Snow Plow Parent. We may even be one ourselves. I imagine these parents are acting in what they believe is in the best interests of their children. They want their children to succeed and are backing them 110%. It seems innocent enough. Unfortunately, they also rob their children of their ability to stand on their own two feet. They can’t problem-solve for themselves and some are even unable to make their own decisions. It’s one thing for your child to ask for your opinion, and it’s completely another thing when they need you to tell them what to do … on everything.

How to Raise Financially Confident Children

I want to my give my daughters a great childhood where they feel deeply loved and supported, and it’s equally important to me that I give them the tools to succeed as adults.

1. Be a Good Financial Role Model

Did you know that kids form their money habits and beliefs by age seven? Behavior experts David Whitebread and Sue Bingham of the University of Cambridge concluded that money habits are formed in early childhood, generally by age seven. If you haven’t started talking to your kids about money, don’t despair. I have some great tips on how to talk to kids, ages 0-7, 7-12 and 12-18 about money and can help you start these important conversations with your kids.

The very best thing you can do for your kids is to be a good financial role model yourself:

2. Say No to Allowance. Money Needs to Earned, Not Given

I’m not a fan of traditional allowance. I don’t believe money should be given weekly “just because” or for doing basic chores, like making your bed. Children should have the luxury to be children, but we do them a disservice when we give them money for no reason. In the real world, money is earned.

In our home, the girls earn money through our weekly Job List. I post various jobs that they can sign-up to complete. They must be capable of doing the task well and complete it without reminders from Mom and Dad. On pay day, the girls immediately allocate their earnings towards their Save, Spend and Share goals.

What I love about this system is that the girls can take a lot of ownership and pride in their work. They can choose whether they want to earn a little or a lot in any given week. They also understand what can happen if they take on too much and are unable to complete their tasks. When we go shopping now, they rarely ever ask me to buy them something. Instead they ask me for more ways to earn money, so they can buy it themselves. I love it!

3. Empower Their Decisions through Goal-Setting

The most dangerous consequence of Helicopter or Snow Plow parenting is the lack of experience and confidence kids have in making their own decisions. They are simply used to having them made for them. Now imagine being a hiring manager interviewing a job applicant who cannot demonstrate any independent thinking because they don’t know how to find solutions for themselves. Is that a person you want to hire? Probably not.

We need to give our kids ample opportunities to make decisions, to make mistakes and to learn from those mistakes in a safe environment. Every year, Lauren and Taylor set Save, Spend and Share goals so they can give their money purpose. Those goals help guide their decisions on how they earn and spend their money. Because I taught them to ask themselves, “Does this make my heart happy?” when setting goals and “Will this bring me closer or further away from my goals?” when they find things they want at the store, they know how to make smart decisions they won’t regret later.

This, of course, does not mean they are perfect and never make mistakes. They do. And it’s hard to watch them decide that something shiny and new was more important than a goal, only to discover later that it wasn’t. I could have prevented the mistake, but I wanted them to learn now when the mistakes were small. It’s my belief that $50 mistake today is a hard but valuable lesson that will hopefully prevent a $5,000 mistake later.

Entitlement Does Not Equal a Good Life

Parents want to give their kids a great life and sometimes that great life turns into an entitled one. It’s a fine line that separates the two. By following my three steps, you can give your kids a good life and raise financial confident kids.


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January 20, 2014  •  56 Comments  •  Children and Money

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  1. Monday, January 20th, 2014
    I'm curious, what's the difference in your household between a basic chore and something that comes up on the job list? We're still a little ways away from figuring out exactly how we want to implement this ourselves, so I love hearing the specifics from other parents in the trenches.
    • Shannon
      Monday, January 20th, 2014
      No problem. I consider basic chores, such as, making your bed, cleaning your room, taking your dishes to the sink, etc to be things we all (Mom and Dad too) do as members of this household. Some of things I put on the Job List include cleaning the litter box every day, folding laundry, helping Mom make dinner, sweeping the outdoors patio, etc. The girls are 8 and 10 right now, so as they get older, the responsibilities will increase as I imagine the pay will too. :)
  2. Monday, January 20th, 2014
    My MIL is a helicopter parent (grandparent) and it freaks me out. If my kids run into the wall or trip, she totally freaks out as if it is the worst injury she's ever seen. Then she acts like we aren't "doing enough" or something. It makes me crazy! =/
    • Shannon
      Monday, January 20th, 2014
      Great point, Grandparents can definitely be helicopter or snow plow grandparents too. :) There is such a fine line between making sure kids feel supported and spoiling them. Makes it hard sometimes!
  3. Monday, January 20th, 2014
    Great post Shannon! Being a teacher, I see helicopters and snow plows all the time. Both types of parenting are causing damage to children. Our goal as parents should be to lovingly guide, let them learn from their mistakes, and become independent thinkers. I think the earning commissions at home for work thing is a big deal. That's what we do with our kids and it has been effective. They don't always like the work but I know it's teaching them valuable lessons.
    • Shannon
      Monday, January 20th, 2014
      I can imagine the number of helicopter and snow plow parents you see. The sad thing is so many have good intentions and believe they are acting in the best interests of their children. Unfortunately, in most instances they are doing more harm than good. I completely agree our role is to be a loving guide - I love that! I'm glad you're doing something similar with your kids and having them earned money. My girls appreciate money so much more now that they can compare the amount of work it took them to earn a new toy and decide whether it was worth it or not.
  4. Monday, January 20th, 2014
    I think I would have to fight hard not to be a snow plowing helicopter if I had kids! Because my parents were the total opposite and sometimes it was hard figuring life out on your own. But there are many shades in between where you can be both supportive and let the kid experience by himself.
    • Shannon
      Monday, January 20th, 2014
      You bring up an excellent point, Pauline. I suspect many of the helicopter or snow plow parents may have asked their parents for support or help as children and had their request denied. And vowed not to do the same to their kids. So now they overprotect. It can be a vicious cycle sometimes. Yes, we do have to find that balance where we are supporting our kids but still allowing them to experience life on their own two feet.
  5. Monday, January 20th, 2014
    It's sad because helicopter and snow plow parents "think" they are being helpful, but it is sad, because it is truly the opposite. I have so many 20-ish clients who feel "let down" by their parents for not teaching them proper financial health sooner. Just like it is better to enforce rules and win battles with kids when they are younger, it is much better to enforce financial rules sooner than later.
    • Shannon
      Monday, January 20th, 2014
      I agree, Shannon! It doesn't feel harmful in their minds until their kids grow older and cannot fend for themselves. Then they start to realize they may have made a mistake, but a lot of damage has already been done. It is always easier to instill good habits - financial and otherwise - when kids are young.
  6. Monday, January 20th, 2014
    I had never heard of snow plow parenting before! You learn something new every day. I wish my parents had involved me in more decision making things when I was younger, or at least have a better understanding of what money really means. You seem to be doing such an amazing job Shannon!
    • Shannon
      Monday, January 20th, 2014
      Me neither, until Anna told me. :) Thank you for your kind words, Tonya. I am doing my best to raise the girls so they can succeed on their two feet! Parents sometimes want to protect their kids or think they will be uninterested but money is something everyone uses and understanding it a young age can only be helpful.
  7. Monday, January 20th, 2014
    I had never heard of these terms before either but the snow plow parenting describes my sister-in-law. She is a good financial role model but because of her career and all of her connections she began pulling strings for her boys while they were still in high school and she continued to try to do that whenever they needed assistance with their careers in their twenties. I know she thought she was doing them a favour, but she really wasn't. They all turned out very well but I know that each time they tried something new, career wise, they felt as if their parents were unsupportive if it wasn't something that they had pre-arranged for them.
    • Shannon
      Monday, January 20th, 2014
      Yes, it can set a dangerous precedent when set everything up for you kids and they don't have to earn it. They begin to take you for granted. And in the end, you cannot set up their whole lives. She's fortunate that they turned out as responsible as they have. Some kids struggle to even do well at the positions their parents obtain for them.
  8. Monday, January 20th, 2014
    I was listening to a podcast they other day about General Stanley McChrystal. He said something interesting [....] a good leader will allow you to fail, but will not allow you to become a failure.

    I think this applies to raising financially savvy children. A little trial by fire for some real world lessons, but ensuring they learn something from the experience. I could write a book on how to raise kids since, you know, my oldest is 2. :)
    • Shannon
      Monday, January 20th, 2014
      Great quote! We've been taught that to fail is the worst thing that can happen, but it's a stepping stone to success. Yes, a little trial by fire is something kids need to experience. I'm always there to help pick up the pieces but I want my girls to connect the dots and be independent thinkers. To want my opinion and advice but be able to take action on their own.
  9. Monday, January 20th, 2014
    I couldn't agree more with your wonderful post, Shannon, and love the concept of #2. I don't have kids myself so who knows how I would be when I actually have them, but I would hope that I would give them advice on situations if they ask for it, rather than actually fixing the situation for them. Here's an article about snowplow parenting effects on the college level:
    • Monday, January 20th, 2014
      Though with the article - I just hope it's not as prevalent as it seems (since I do take media/articles with a grain of salt, as well).
    • Shannon
      Monday, January 20th, 2014
      LOL! Me too. Hopefully it's not that widespread! :)
    • Shannon
      Monday, January 20th, 2014
      Thanks for sharing the article, Anna. Kids need to understand and believe that their parents support them, but this is going way toooooooo far! I have no doubt when you and B become parents that you will raise them to be financially savvy, independent adults! There is nothing wrong with giving advice, brainstorming solutions but let kids at least attempt to solve problems themselves, especially by the time they are in college. :)
  10. Monday, January 20th, 2014
    Hi Shannon,

    I'm definitely a Helicopter parent but Is it possible to be a little bit of both?

    With my oldest daughter who is struggling financially, I help her out when she's in a real bind, like helping her out with her rent but I don't volunteer like I used to.

    These are great tips Shannon...thanks for sharing them with us. Hope you had a great Monday!
    • Shannon
      Wednesday, January 22nd, 2014
      It's tough, Corina. We want to protect our kids and it's not always easy to know when to draw the line. When your kids are going through a rough patch, there is nothing wrong with lending some support. It's good that your daughter knows you will help but it's also good that you don't volunteer too. It's one thing to know help is just a phone call away and another to become overly reliant on it.
    • Sunday, January 26th, 2014
      It sure is hard and it was harder for me to stop volunteering. I remember how hard it was for me and I didn't want her to go through that. But a dear friend told me how will she learn if I always pull her out. What will she do when I'm gone. That made me think and so I started to back off.

      And when it comes to my grandson...forget it, I'm a sucker ;). Thanks for sharing these tips with us! I hope you had a great weekend!

      Ready for Monday?
    • Shannon
      Monday, January 27th, 2014
      It is hard, Corina. No doubt about it. They are babies, even when they are adults and we always want to protect them. But your friend is right - she needs to learn how to stand on her own two fight. You can still have her back without "fixing" everything for her. While I don't have grandchildren yet, they are a whole different story! LOL!
  11. Tuesday, January 21st, 2014
    I like how your family does allowances. I never thought about posting a job list, but it sounds like a good way to not "force" them to do things but probably actually motivates them to do even more, and they feel like they have a say in it. I'll have to pass this idea along to some of my friends who have kids who will be old enough to do chores/housework pretty soon.
    • Shannon
      Wednesday, January 22nd, 2014
      Thanks, DC! It works really for us. The girls really like having some control over how much money they earn. They also don't mind achieving their goals faster too. :) I like it because the girls know the things they are expected to do as members of our family and don't expect me to just give me money. They know they have to earn it!
  12. Tuesday, January 21st, 2014
    Yesterday our 9-year-old asked me if she could do anything for me to earn money. I had to say "no" - it's super tight here this month. You know what she did? She offered to do her brother's chore of cleaning his bedroom for 30 cents. Then her sister, who was lamenting about giving her a shirt that she now wanted back, was looking for a way to make it happen when Abbie wouldn't just give it to her. $2.15 later Em had her shirt back, and Abbie was $2.15 richer. She figured out a plan, and made $2.45 in a matter of a half hour. Ya gotta love her entrepreneurial spirit. :-) Your tips here really, truly do work!
    • Shannon
      Wednesday, January 22nd, 2014
      LOVE it! Abbie has quite the entrepreneurial spirit and I love that she first went to you for earning opportunities. But since that wasn't in the cards this month, she found other ways to earn some extra money. That is phenomenal, Laurie! Parents don't need to be sole "employer" either. Kids can definitely find ways to earn money from others too.
  13. Tuesday, January 21st, 2014
    I'd never heard of snow plow parents, but reflecting back, that's certainly a trend. I love that you say no allowance! I remember hearing you talk about it on the Stacking Benjamins podcast. It certainly sends the wrong message to just hand over money for doing nothing except breathing.
    • Shannon
      Wednesday, January 22nd, 2014
      Thanks, Erin! Yes, when we give money for no reason, especially on demand, it can send a dangerous message. My girls don't mind earning money. They understand money is earned as adults and enjoy having the ability to earn as little or as much as they want. They also enjoy spending it… on the things that make them happy!
  14. Tuesday, January 21st, 2014
    I have never heard of snow plow parenting before :) Ya learn something new every day!
    • Shannon
      Wednesday, January 22nd, 2014
      It was a new term too me too, Mackenzie. :) Have a great day!
  15. Tuesday, January 21st, 2014
    I think this is great advice Shannon. My daughter is too young right now to take on 'jobs' around the house although we are working on tidying up (no mention of money here though). But I want to empower her to make decisions about money and teach her how it can be earned as she gets older. :)
    • Shannon
      Wednesday, January 22nd, 2014
      Thanks, Hayley. One thing I didn't go into great detail is that we first set expectation with the girls on the chores they do without pay. The things they do to contribute to well-being of our family and home, such as clean their room, bring their dishes to the sink, etc.
  16. Wednesday, January 22nd, 2014
    Great points! I've been reading up a lot on the allowance thing, lately. It's funny how parents are either strongly for or against it. I'm not sure where I stand yet. I think my parents did try me with a small allowance when I was about 7, like 25 cents a week, then a dollar, then phased it out after a year or two. I think I was getting too attached and not wanting to do other chores unless I was getting paid for it. Ya, I was one of those! Ha! I think point #3 is incredibly important! Children need to learn how to make their own decisions.
    • Shannon
      Wednesday, January 22nd, 2014
      Thanks, Anthony! Yes, allowance is a hot topic with lots of strong opinions. :) I'm pretty sure every kid wants to get paid for all the chores they do. We make it clear with Lauren and Taylor what chores they are expected to do without pay. I'm sure they would love to get paid for them too, but we have stood firm.
  17. Wednesday, January 22nd, 2014
    I love your system of allowing your girls to earn money. I would be interested to know more specifics on that. What are the tasks/ what are they worth.
    • Shannon
      Wednesday, January 22nd, 2014
      Thanks, Stefanie! We have certain chores that we expect the girls to do as members of our family without pay, such as cleaning their room, making their bed, completing their homework before dinner, bringing dirty dishes to the sink. The things we have on our Job List include sweeping our backyard patio, cleaning the litter box, folding laundry, helping me make dinner, etc. As they grow older, the chores will increase in responsibility, such as make dinner or do laundry. I imagine the pay will also increase. :)
  18. Thursday, January 23rd, 2014
    Never heard of the snow plow parent! I know a co-worker who is both a helicopter and snow plow parent...poor kid! But based on what I know, the kid constant gets into trouble (financial trouble included...this is college age kid). The mom is constantly calling to get him to do things, though he never listens. And when he runs into trouble, she's constantly getting him out of trouble.
    • Shannon
      Friday, January 24th, 2014
      I was unfamiliar with the term snow plow parents too. Such a vicious cycle. Our intentions in helping our kids are good, honorable and understandable. Unfortunately, they also sometimes make it worse. It's not easy removing ourselves from the situation and letting our kids solve the problem or face the consequences themselves but sometimes we must do it, for both of our sakes.
  19. Thursday, January 23rd, 2014
    Our 4 kids grew up in a similar system. No allowance; you get money from chores. They are all pretty money savvy as adults, but I had my doubts sometimes when they were kids.

    I put the list of chores on the refrigerator with how much they'd earn for each. Actually I made a separate list for each child, tailoring the chores to their ages. I required each to do the same number of chores--sometimes just a few during the school year and more during the summer.

    They would usually choose the easier/quicker chores. They seemed to prefer their free time to getting money. They also were fine with living simply and not buying stuff. As adults they are still pretty careful with their money and actually have responsible jobs.

    Now if I was determined to make them do more chores we might have had some problems!
    • Shannon
      Friday, January 24th, 2014
      What I love is that your kids realized that if they preferred free time over getting money, they would have to simply. They didn't buy lots of stuff or beg you to do buy it for them. They made a choice. And that's what life is - choices. It's great to hear that handling money and making responsible choices as a child continued into adulthood. Some weeks the girls do less but when they have a goal they are close to achieving or find something they really want, then they increase their efforts. I love it!
  20. Saturday, February 8th, 2014
    I am also teaching my kids that they should not be relying to us all the time with financial allowances, they must earn it on their own. Now, it's nice to hear that they are learning to earn money on their own and pay their personal stuffs without our help.
    • Shannon
      Sunday, February 9th, 2014
      Great job, Marissa! Helping your kids understand the value of earning money and using it to buy things that make their hearts happy is a great lesson for kids to learn. I love it when my girls ask me for more ways to earn money, so they can buy something they want, rather than asking me to buy it for them.
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    "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