Unspoiled Children, No Rod Needed

Parents Can Be Generous Without Turning Children Into Entitled Little Terrors

You want to give your children everything. But sometimes you can go too far and create a spoiled, entitled brat.

The consequences can be severe: In addition to acting like whiny complainers now, spoiled children are more likely to grow into financially dependent, irresponsible adults plagued by overspending and debt.

“Some parents want their children to have everything for free,” says Katherine Dean, managing director of wealth planning at Wells Fargo Private Bank in San Francisco. “But the real world doesn’t work that way.”

Financial advisers and therapists suggest various ways to avoid spoiling your children.

1. Understand Yourself

Ask yourself, “Why am I inclined to indulge my children?” says Susan Newman, a social psychologist in Metuchen, N.J. It might be to gain their approval, to relieve your sense of guilt for the limited time you spend with them, to make up for things you didn’t have growing up, or your need to keep up with friends and neighbors, Dr. Newman says. Understanding your own motives can help you break the habit and take a different approach, she says.

2. Talk About Money

A big mistake parents make is not talking about money with their children, fearful they’ll become overly focused on money, says Ann Freel, a family-education expert at Northern Trust Wealth Management in Chicago. It’s important to speak about your own family’s money values. If you believe “things don’t equal love,” share that with your children and reinforce it by talking about what you value more than money, Ms. Freel says.

3. Educate Your Children

If you’re concerned that your child isn’t getting a realistic sense of how to set financial priorities, speak to them about real-life money decisions where trade-offs are required, Ms. Freel says. You can involve them in household finances from middle school onward without opening your financial books to them, she says.

4. Set an Example

“Kids develop attitudes about money by observing their parents’ day-to-day actions more than anything else,” says Ms. Freel.

Shopping to relieve tension, your tipping practices, charitable giving and the way you treat your belongings will demonstrate your money values to your children. Instead of impulsively buying a new car, speak to your children about how you’re saving each month for it and maybe even taking on extra work to afford it. Involve them in comparison shopping, either in stores or online.

5. Learn to Say ‘No’

The simple way to avoid spoiling your kids is to make sure it’s OK to say “no.

“Do not allow the children to pit one parent, or grandparents, against each other when it comes to money,” says Neale Godfrey, president of the Children’s Financial Network in Chester, N.J. “Decide the rules together and stick to them.”

6. Make Them Work

“Start by teaching them the only way to get money is to earn it,” says Ms. Godfrey. You might pay them for doing age-appropriate chores. For older children, you might set expectations such as “if you go to college, you will work during the summer to earn some of the money for your expenses,” she says.

7. Teach Them to Give Back

Volunteer as a family, and when your children are old enough, encourage them to volunteer for causes they care about, Dr. Newman says.

Families should have a mandatory “giveaway rule,” she says. Twice a year, before birthdays or big holidays, ask your children (help the younger ones) to look through their clothing and toys and determine what they can give to a charity. When a tragedy such as a hurricane or a tornado strikes elsewhere, have a discussion about ways your family might help those in need, she says.

July 13, 2014

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