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.
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.
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.
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.
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.”
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.
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.
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SHANNON RYAN, CFP®
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.