Raising Financially Literate Kids in the Age of Entitlement
During the 1980s when the well-meaning parents of Gen Y’ers were showering their precious children with unconditional love, constantly praising, never criticizing, and putting the importance of self-esteem above all else, they probably didn’t realize they were creating a very large group unable to deal with disappointment and governed by a deep sense of entitlement.
This so-called Entitlement Generation, born between 1979 and 1994, believes they are owed certain rights and benefits without further justification often expecting higher salaries, flexible work hours, and ample time off. They require constant praise, overreact to criticism, seek instant gratification, set unrealistic expectations and often have unrealistic demands especially of their parents. As one might imagine, these latter characteristics do not bode well when it comes to financial matters between these young people and their parents. Oftentimes, it results in the parents giving in despite the cost, and has led to a generation of young adults who are financially illiterate yet still feeling entitled.
However, there is hope for our future and it lies mostly in the hands of America’s parents, whether their children are 3, 13, or 30. Steps toward toughening up on Gen Y exist for children of all ages. If your kids are still young, you can teach them early on to appreciate the value of money and the benefits of hard work by following some simple tips. If they are older and perhaps already subscribe to the mindset “give me what I want because I’m special,” there are still ways to modify their behavior and way of thinking, and while it may be a bit more challenging, will be worthwhile in the end.
3 Tips for Rearing Cost Conscious Kids from Credit Unions Online
- Teach Financial Literacy 101 - kids should be learning from a very early age about the concept of money. Teach them how to save, how to budget, about needs vs wants, and the idea that all products and services, from necessities like food and shelter to luxuries like toys and vacations, cost hard-earned money. Your credit union can help! Many credit unions and associated organizations offer youth-oriented financial literacy programs including the National Youth Involvement Board (NYIB), CUNA’s Thrive by Five, and more.
- Stress Credit Card Basics – teach kids about credit including how to properly use a credit card as a credit-building tool and how not to accrue debt. As part of teaching about the responsible use of credit, don’t co-sign on a credit card or any other type of loan. Rather allow your teenager to become a user on your card under your watchful eye. This will help them establish credit and learn about watchful spending without affecting your debt-to-income ratio or your credit score. It is important to have an open dialogue about the risks and benefits of credit card usage since, chances are, your child will one day have one of his/her own.
- Work, work, work and save, save, save! – Encourage kids to work and save their earnings, even from an early age. Working and earning money for the things you want builds character and establishes good habits. As young children, they can do chores or take on extra small jobs around the house for which they’ll earn money, rather than simply being handed an allowance for existing. These jobs can increase in difficulty and payment amount as your child grows. As your youngster approaches the teen years he or she can begin babysitting or lawn mowing. And once they’re able to legally work, having a part-time job that doesn’t interfere with school, should be encouraged.
3 Tips for Setting Your “Boomerang Kid” Free
A "boomerang kid" is defined as an adult child who chooses to cohabitate with their parents after a brief period of living on their own, thus boomeranging back to their place of origin. This behavior has become popular among the “entitlement generation” due to financial instability. Below are some tips on helping your “boomerang kid” take the next step toward stability.
- Make “the nest” less comfortable -- rather than allowing them to sleep til noon, cooking their meals, and doing their laundry, make the accommodations of their childhood home a little less homey. When your kids realize things have changed since they were 17, it will be an incentive to find a place of their own as well as the means to pay for it.
- Charge rent -- in the real world, adults living on their own have to pay monthly rent or a mortgage, so your “boomerang kid,” especially if he or she is not in school, should be reminded of this even while living at home with mom and dad. Again, this will act as an incentive to find their own place -- being forced to pay and not having the freedom or privacy they desire is less than ideal.
- Don’t bail them out -- although this is the natural reaction of many Baby Boomer parents, it is the wrong decision. Not only will your kids fail to learn from their situation, but you may be putting your own financial well-being at risk. Bail outs are not the answer.
So, moral of the story, don’t endanger your child’s future by nurturing bad fiscal habits and enabling irresponsible behavior -- they’ll never be self-sufficient, productive members of society. Plus, you don’t want to put your own retirement in jeopardy by draining it to pay for your kids’ financial mistakes. This will not only lead to unfavorable financial situations for both you and your kids, but will inevitably also lead to dysfunctional family relationships. By following some simple steps and doing the right thing, you can raise happy, healthy, and financially stable children!By Cyndi Cohen
Published July 12, 2012