Sorry to break it to you, but if you have children who constantly throw tantrums every time they don’t get their way or treat you like their own personal ATMs, there’s a good chance your children are spoiled.
That’s the bad news. The good news: There are numerous ways you can turn your spoiled child into a financially responsible kid who appreciates the value of money. Click through for 30 tips on how to stop spoiling your kid.
1. Don’t buy your children things to appease bad behavior
Buying a screaming child a candy bar or trinket in a store can be tempting. The purchase is nominal, and the reward is quick — the child will calm down. However, these quick fixes can be detrimental in the long term because they teach children that misbehaving and making noise gives them what they want.
Instead, teach your children good behavior and patience. And sometimes, recognize these actions with a treat or reward.
2. Don’t give an allowance without requiring that it be earned
Tell your children how and why they will receive an allowance. Consider the difference between an allowance that is given no matter what versus an allowance that is earned once chores or duties are completed. The latter can help children avoid developing a sense of entitlement.
When they were about 7 or 8 years old, her children started doing chores to earn an allowance, said Janet M. Nast, of Murrieta, Calif. “This was the age they started asking for extra things in the store. As a single mom for 14 years, I had to say ‘no’ or work out another plan. So chores it was. They earned 25 cents per task completed,” she said.
3. Don’t overlook the value of a financial education course
Families should take financial education courses such as the Dave Ramsey Financial Peace University classes. Dave Ramsey also has programs for teens. Karen Robertson, of Wildomar, Calif., is the mother of two grown adults and has a teen grandson who has gone through the teen program twice.
Research financial courses, and enroll your children in one. Then, discuss what they learned and how they will apply the information.
4. Don’t fail to teach your children what life costs
When shopping for groceries, bring your child along and explain why you chose one item over another — for example, cost per ounce or quality — said Commie Stevens, of Laguna Niguel, Calif., a mother to two daughters.
“Or play the bill game,” she said. “See who can guess how much the family spends on electricity, food or gas. Don’t be surprised if your 12-year-old thinks electricity costs $900 a month.”
5. Don’t fail to teach your kids what money is and what it can do
Children must first understand money as a chain of transactions, said Patrick Mulvey, of Long Valley, N.J., a father to four adult children and grandparent to two.
“They learn that the money is used to get things,” he said. “Then they learn that doing things can get money. Along the way, they can understand that money involves decisions and responsibilities.”
Start with basic concepts about what money is and how it works.
6. Don’t be a softy when it comes to enforcing chores
Once you establish a plan for allowance tied to chores, enforce it. Don’t be a pushover when your child cries for something they wanted if they didn’t hold up their end of the bargain.
If your son or daughter didn’t finish the required chores, explain calmly and clearly why the rules exist so they they learn the consequences — good and bad — of your agreement. You will be laying a good foundation for teaching them a strong work ethic.
7. Don’t allow your kids to handle money without direction on where to put it
Teach children how to save, spend and give money. Mike Argiro, of Wallingford, Conn., said he taught his son at an early age to allocate any money he received into different categories:
- Car fund
“Ever since he was little, he was focused on getting a car,” said Argiro. “When my son was very young, we just had … jars marked in each category. As he got older, we opened a checkbook for bigger items and a mutual fund for his car fund.” By the time Argiro’s son was 14, he had almost $10,000 for his car fund.
8. Don’t let your child move through life without setting goals
Encourage your children to set realistic and age-appropriate goals. Goals can help a child determine what is important, how to work hard and how work earns rewards. Hard work also helps a child avoid centering self-worth on material goods.
9. Don’t forget to teach your children the power of negotiation
Explain to your children how negotiation works and its importance in money management.
“When my son was in the sixth grade, he wanted a Razor scooter for $60,” Nast recalled. “I knew that would take awhile to save for, so we talked about that, and then he asked if he worked for two weeks and saved part of it, would I pay the difference so it wouldn’t take a month to get it. We agreed on three weeks, and I would pay half.”
10. Don’t miss an opportunity to begin teaching at a young age
Start teaching your kids about the proper handling of money as soon as they reach the age where you think they’ll be able to comprehend a basic money lesson, said Carly Fauth of Milford, Mass., a mother to two boys. For example, consider toys that can double as money-teaching tools.
“A great beginner course to consider is to purchase an inexpensive toy cash register, then educate them on how many pennies equal a nickel, how many quarters equal one dollar and so on,” she said.
11. Don’t underestimate the power of real-life scenarios
Turn routine shopping trips into money-teaching lessons. “Once children have learned how money has worked with the cash register, then take them with you on your grocery shopping trips,” Fauth suggested. “If you used coupons and saved $15 on your trip, show them that on the receipt. You can also do some comparison shopping with them on the toys they want.”
12. Don’t forget the importance of saving money
“Take 15 percent off the top of any allowance/pay for savings to show them that paying themselves first is non-negotiable,” Stevens said. “Choose a family vacation together, and have your children work out what needs to be saved per month. And, have them contribute a bit toward that monthly goal.” This can help give your children a savings mentality that they’ll carry into adulthood.
13. Don’t fail to explain the power of cold, hard cash
When your children are at the age of wanting things they see, give the cash to your children. Then, have them hand it to the clerk, who hands the purchase to the children, Mulvey suggested. When your children practice spending actual cash, they will able to visually see the impact.
14. Don’t bad-talk being wealthy
No matter what your family’s background, never teach children that wealth is bad. Wealth can help others and make positive impacts on the community.
So instead, teach your kids what it means to be wealthy and how to use money to help others and give back.
15. Don’t misunderstand the difference between wants and needs
Teach your children the difference between a want and a need. For example, don’t shop for clothing as a sport, Stevens said. “Wait 24 hours to make any purchase that isn’t a pure need to make sure the want is something you really want,” she said.
16. Don’t always have your wallet full
“Intentionally arrange on occasion, perhaps once per week, for your wallet to not have enough cash, and so the purchase must be delayed,” Mulvey said. “Show the empty wallet.”
17. Don’t let your kids think money grows on trees
Explain to children how much items cost and how long it takes to work for them. “I have two little girls,” said Kimberly Evans, of Ocala, Fla. “When they were about 3 and 4, they hated when I left for work. I let them know going to work gets you that Dora toy you wanted and buys your favorite chips.”
18. Don’t take it personally if your child is angry over money lessons
Nobody said teaching financial responsibility to children was easy. Some lessons might be more trying than others, but don’t give up. Your child’s disappointment or anger will not last. Remind yourself that your child is learning and will not stay angry at you forever.
19. Don’t use complex money language with your children
When teaching your kids about personal finance, use terms that they can easily understand. “For example, don’t try to explain to them what the APR is on a credit card,” Fauth said. “Instead, tell them that is the penalty you have to pay if you carry a balance.”
20. Don’t neglect the power of money in teaching math
When possible, tie in allowance with a math lesson. “Once a child can count and do simple arithmetic, they are ready for an allowance,” Mulvey said.
Not only will your child learn how to manage their money through budgeting and saving, but they might get higher marks on their math exams.
21. Don’t stifle your children’s creativity
Encourage your children to devise ways to earn money and learn in the process. Esther Diaz of Los Angeles said that she encouraged her children to start businesses.
“They solicited work from our neighbors — either bringing in the trash cans for them or feeding their pets,” she said. “The outcome of their business resulted in my starting my own business.”
22. Don’t forget your children are watching you
One of the easiest ways to teach your children about money is being a good role model. Children look up to you and want to be you. Be the financially savvy person you want them to be.
23. Don’t begin offering allowance without thinking long term
As your child learns skills, from taking on more responsibility to negotiating, you’ll need to adjust your allowance and chore agreement. “Requests for raises in allowance are agreed in exchange for more important chores that they decide to add, such as loading the dishwasher on all Mondays and then Mondays and Tuesdays for even more money,” Mulvey said.
Make sure to challenge your child with chores that are suited to his age and ability as well as with responsibilities that will teach him new skills. As your child gets older, you can allow him to suggest new responsibilities, too, which can encourage his sense of contributing to the household.
24. Don’t pay for your teen’s vehicle in full
Vehicles can feel like something teens are entitled to, especially if their classmates are showing up to school driving new wheels they did not earn.
But resist the urge to give them a car as a gift. Meet your teen halfway: Your teen saves up for half the cost, and you match the other half.
25. Don’t let teens loaf
Discuss the importance of working part time once your children are old enough. Nast’s children learned that they had to work for what they wanted.
“They both ended up getting part-time jobs in high school so they could date and put gas in the car,” she said. “Eventually, they saved money for down payments on their own cars and took out loans.”
26. Don’t limit your child’s options with money
Evans gives her children options when they want something expensive. “I feel this way, I know the choices that they will make when it comes to handling money,” she said. “They can get the one expensive toy or 10 non-expensive ones. Either way, I would be spending the same amount of money, but I can get an idea of where my children’s heads are.”
27. Don’t forget your child’s age as you teach lessons
Money management lessons have the most impact when given to your child at the right age. Consider lessons for children, pre-teens, teens and young adults. Each stage of life warrants a different money lesson.
28. Don’t give your kid money without first helping organize it
“I thought it was important for them to have a system that allowed them to physically handle, organize and track their money,” Diaz said. “In this way, money becomes tangible and meaningful. It’s not an amorphous thing that exists in an increasing age of credit cards and mobile payments.”
Consider helping your child open a checking account or savings account so they store their money safely.
29. Don’t forget that teaching moments are all around
Think outside the box. From eating at restaurants to doing chores, opportunities for money lessons are everywhere. Consider all the ways money touches your life — and your child’s life as well.
30. Don’t try do it alone
Sometimes, it can be challenging to remember what you learned at a certain age or when you first understood money concepts. Take a cue from your child’s math classes and homework. Talk to their teachers about what your child is learning, and arm yourself with this information to form age-appropriate lessons.