Affluent parents have to teach their children how to be responsible with money. When your parents said, “We can not take a family vacation this year because the car broke down and we are going to have to get a new car,” as the families become more affluent the conversation does not ever occur and things just are there.
Somebody gave my granddaughter a twenty-five dollar gift card. Of course the first thing she sees costs like forty-nine ninety-five. And I see Eva, she is looking at the card and I said, “Eva, is forty-nine larger or smaller than twenty-five?” She says, “Larger, Grandma.” And now she suddenly finds something, she gets really excited because it is twenty-five. She says, “Grandma I can get this, it is twenty-five.” And I said, “Eva, honey, you cannot because there is tax. So with your twenty-five card you are going to have to look at something that maybe is twenty-one dollars. Then you can pay the tax and you will get a little change left over.” She kind of looks at me, and I said, “Yeah that is how it goes.”
I like children to have an allowance young because an allowance is the first money management tool that a child is going to have. And I want that allowance in three parts, that part that they spend, a part that they save, and a part that they give to charity.
You have got to set some limits, it just does not come because it is asked for and demanded, because at a very early age kids can understand about limitations. If you are a wealthy family you cannot really say we cannot afford that, and I do not believe in lying. But you can say to a child that is not how we choose to spend our money. I want families to really separate between what a child needs and what they want. You know, a child’s need to be loved, to be encouraged, to be supported when they are doing activities, you know for you to be a cheerleader, you cannot do that enough. But all this “I want, I want, I want, I want,” that is what you put the limits on and you do not give in to “I wants.” You know, “I wants” go on a wish list and you visit that wish list, you know, at the holidays or a birthday, limited times, because kids nowadays have way too much stuff. And so we wonder why kids feel entitled, it is because they have no ability to kind of gauge limitations.