Do you ever wonder if you’ve missed some opportunities to teach your children about money? You are not alone. Here are three financial issues that most concern parents, depending on the age of their kids:
Issue #1 – Entitlement (Ages 5-12)
Our parents feared we wouldn’t have enough. Now we fear our kids may have too much. So how do you know if you’re raising an entitled child?
An entitled child thinks they have the right to get whatever they want—because they’re entitled to it. It’s not just that they want things, all kids do; it’s the belief they are owed certain things.
Does your child expect a reward for everything they do? Does your child always ask for more? Is your child able to delay gratification?
Parents should be on the look out for an entitlement attitude at any age, but we see it popping up in children ages 5-12.
The fact of the matter is we want our kids to be grateful, responsible, independent adults someday; entitled is not on that list.
Issue #2 – Materialism (Ages 13-17)
Have you heard, “It’s a first-world problem”? That seems to be the catch phrase folks offer when they realize they are complaining about something without real consequence—a problem only found in a first-world country, i.e. “My computer is too slow. I need a bigger closet. We are so tired from our vacation.”
Materialism is a first-world problem. It is “a way of thinking that places importance on material possessions with little interest in ethical or spiritual matters.” Simply put: A materialist never has enough stuff.
Does your daughter repeatedly ask for new clothes? Does your son buy so many games he’d never have time to play all of them more than once? Do they constantly compare what they have to what their friends have?
You don’t have to look far to find a materialist. We work with them, are related to them, are Facebook friends with them, and live next door to them. But watching for it in our teens gives us the opportunity to help them see how much more there is to life than possessions.
If they head off to college or start life on their own thinking their success is measured by what they acquire, they will most likely end of up disillusioned and sad and deep in debt.
Issue #3 – Financial Dependence (Ages 18+)
Statistics point to a growing trend of young adults moving back home to live with their parents. You can blame the poor economy, the rise in marrying age or massive student loan debt. But in the end, it’s up to you to set the expectations with your young adult about moving back home and remaining financially dependent.
We think children in their 20s belong on their own. It may be difficult to watch this season of new challenges for your child, but now is the time to help your young adult learn to take care of their own finances and make their own money decisions. You don’t need to cut your kid off when he turns eighteen, but you should use the next few years to slowly hand off the last of your involvement in your child’s finances.
Will they make mistakes? Sure. Is the world a little scary? Yes. But they need to know you believe in their abilities enough to let them solve their own problems.
Ask yourself: Does my child buy nice things because they don’t have to pay rent? Do they have the freedom to use my credit card? The last time they needed money, did I step in and bail them out?
Scott: I remember racking up a huge credit card bill my first year at college. It wasn’t one big thing, but I spent tons on fast food, movies, concerts, football games, and clothes. At the end of the year I packed up my cruddy little car and drove home to spend the summer with my folks. I remember showing my dad the bill and expecting his sympathy and help. Instead he handed me the want ads and told me to find a good job. I found two (and ate a lot of ramen noodles that next year).
I wasn’t thrilled with my dad and his “tough love” that summer, but he taught me a valuable lesson: You want it; you earn it. He also gave me the opportunity to prove to myself I could work hard and earn my own way in this world.
Parenting is difficult and each stage seems to contain more surprises than the last. But you can do this! And we’d like to help. After years of research, and some assistance from a super smart statistical scientist, we developed an assessment especially for children so you, and they, can determine how they approach money and where they might struggle the most.
Each child is different, but this assessment has helped many families. You receive five free assessments when you purchase our new book The 5 Money Conversations to Have with Your Kids at Every Age and Stage (and for a limited time, you'll receive three exclusive bonus items).
We can’t smooth out all the bumps of parenting, but we’d sure like to help families better understand how they relate to money and, ultimately, each other.
What issue do you think your kids struggle with the most? What are some ways you teach your kids about money?
