Raising children is a constant balancing act. You want to provide structure and stability, but you also don’t want to run an overly militant household. It’s important to you that you show you care about your child’s whereabouts and choices, but you don’t want to be a helicopter parent. You want your kids to do well in school, but you don’t want to put too much pressure on them.
And when it comes to money, you want your kids to know you can provide them with all of their physical needs, but you don’t want to raise spoiled children who feel entitled to their every whim.
How can you achieve that?
Giving your children a sound financial education should be an integral part of your parenting, and it all goes toward creating this balance. To make things easier, we’ve compiled a list of five steps you can take to achieve your goal. A parent can never have too many practical pointers!
1.) Use an allowance as a teaching tool
According to a study conducted by the American Institute of CPAs, 89% of parents who give their kids an allowance require them to earn that money through chores. But Ron Lieber, author of The Opposite of Spoiled, argues that this practice is counterintuitive. Lieber claims that allowances should not be given as a reward or as a salary, but as a teaching tool. By giving kids their own spending money with no strings attached, you can help them learn how to manage their money and control their spending habits.
You can also use this opportunity to help them implement the three-jar system, in which they allocate predetermined percentages of their money toward spending, saving, and giving.
2.) Boost their confidence
Peer pressure is a lifelong struggle that may be at its strongest during school-age years. After all, your kids are spending most of their waking hours in the presence of their peers. They may not be astute or mature enough to understand that people must make spending choices that reflect their personal financial situation – and not their neighbor’s.
Help your children make the right choices by fostering a sense of worth that is independent of material possessions. Boost their confidence and build them up so they feel good about themselves just for who they are, and not for what they own or wear.
3.) Say no
Regardless of your financial status, it is crucial that you to refuse your children’s requests from time to time. Everyone needs to learn how to accept a no, and every time you give in to a child’s demand, you are raising their standard of living a bit more.
Say your daughter asks for a $200 designer jacket when you know she has a perfectly wearable one from last spring. If you give in to her begging, you may be affecting her future choices in two ways:
- By giving in easily, you have just diminished the value of $200 in her eyes.
- You are raising her standards to a level you – or she – may not be able to sustain.
This doesn’t mean you can never give a child something “just because.” But experts recommend the sporadic “no” so your kids learn to accept that they can’t always have everything they want.
When turning down a request, it’s best to keep money out of the picture. You want your kids to know you can provide them with everything they need, and to understand that they don’t really need everything they want.
Instead of saying: “We can’t afford that right now.”
Try: “You don’t really need that right now.”
4.) Encourage work
Kids who hold down a job when they’re still young are getting a head start on life as an adult. Encourage your child to look for a summer job, shovel snow for your neighbors in the winter and rake their leaves in the fall and accept the occasional babysitting job. They’ll learn responsibility and develop a work ethic. And, best of all, they’ll start valuing their money more when they see how hard it can be to earn a single dollar.
5.) Model gratitude and giving
One of the most important lessons you can give your children is to appreciate what they have and to give back to others. These lessons won’t hit home by being shoved down your kids’ throats through lectures. Instead, use every opportunity you can find to model these behaviors for your children.
Someone did you an unexpected favor? Thank them loudly and profusely – in front of your kids. Thrilled with your new living room couches? Don’t just luxuriate in their loveliness and softness; verbalize how thankful you are to be able to afford such fine furniture.
You can easily make gratitude a family project by instituting a thankfulness routine at the dinner table in which every child shares a part of their day for which they’re thankful. Or, you can create a “Jar of Gratitude,” in which family members drop small slips of paper describing something they’re grateful for, to be read aloud on a weekly basis in front of the entire family.
Do the same with giving, bringing your children along with you when you donate old clothing or food, and allowing them to watch you give money to your favorite charitable causes.
By helping your children develop these habits and essential traits, you’ll ward off feelings of entitlement and raise kindhearted, giving adults.
Your Turn: How do keep your kids from getting spoiled? Share your best tips with us in the comments!