A recent headline in USA Today, Aggressive ‘Helicopter’ Parents Force Easter Egg Hunt Cancellation spurred today’s topic. Some overbearing parents were so worried that their little kiddos couldn’t Easter egg hunt on their own and wouldn’t get their “fair share” of prizes that they violated the hunt rules and “helped” their children claim eggs…
….all while parents who had the fortitude to follow the rules watched as their kids came back with baskets empty.
My opinion:
We all want our kids to succeed and don’t want to see them cry. But sometimes, sending little Timmy out to play without his helmet can help him learn valuable life lessons.
We all learn from failure.
I’ve failed more often than the average person has tried. – Donald Trump
Back in my advising days, I’d ask parents how they were teaching their kids financial responsibility. I don’t think many advisors ask this question, because so many were surprised when I asked.
Often, they’d ask what I’d recommend.
One of my favorite recommendations was that they hand little Timmy or Tina an allowance. I’d make it a big one, too.
One of my favorite pastimes was to watch their faces when I told them just how big I’d make it. I’m not talking “break the bank” big, but I am suggesting you hand them enough to make them go “wow!”
Here’s the deal:
You can trust your kids with a little money today or send them off to college later without a clue how to manage cash in their hand.
Let Timmy screw up. Have the guts to let him fall on his face.
Then, once he’s stepped in it the first time, be a parent enough to discuss his mistake. Do it a few days after he’s broken the new iTouch he bought, or when G.I. Joe is missing an arm.
Teach him how he could have bought security by saving or investing that money. Ask him if the toy really made him happier.
Stop sheltering your kids from real life until they show up as adults with no training and you’re not there to do it for them.
I’ll bet giving them $10 a few times will teach them well over $1,000 in lessons over their lifetime. What a great investment!
Here’s what I did. I paid my kids a large allowance. Then I stopped buying popcorn at movies when we’d go. I wouldn’t by them books at the bookstore. There were no video games. They could buy that stuff, but it was their choice. Then we’d talk about the impact of those choices.
Today my kids both run websites at age 16 and own stocks on their own. They both have healthy savings accounts from jobs. I stopped paying an allowance years ago.
I’m not patting myself on the back. We’ve messed up our fair share and will in the future. I’m just showing you that it’s possible to teach your kids about life without doing everything for them.
(photo credits: C’mon Kid, finish up: I’ve got work to do: Ed Yourdon, Flickr; Kids and Money: GoodNCrazy, Flickr)
Great post AJ! We exchanged comments about this importance of this yesterday…it’s such a big deal for parents to show their kids how to properly manage money.
I actually have a guest post coming pretty soon at Money Saving Mom about a few tips that I to teach kids how to manage money. I suggested not just GIVING them money, but also teach them that things aren’t just handed to you and you have to work to earn a living by giving them chores/responsibilities and paying them for it.
Interesting approach. I’ve heard two different views on that front, Jason. Some say it should be tied to work, others are adamant that it shouldn’t. I have to say that although I’ve probably done 20 pieces on this topic alone in various news outlets, I haven’t formed an opinion on that front yet. Can’t wait to read your piece.
I had a nice size allowance paid in bi-weekly installments (like a job). My mother didn’t give me nothing above that but the essentials. I had to budget my money effectively to get big ticket items and deal with sacrifice of not hanging with friends / movies and stuff If I didn’t have money. It was as if she was preparing me for real life. And when I messed up! (Running up a 1k phone bill) I paid with my allowance. I love her for that. the trick when you give your kid an allowance is when they mess up, don’t save them! Let them think their way out of it and learn the lesson of overspending or spending all their money too soon.
nice post, joe. i didn’t know that you had kids..
we don’t currently do an allowance with our kids, but offer them regular opportunities to earn money. $3/week for keeping your room clean all week. $2/bag for raking leaves in the back yard. $5 one-time charge for scrubbing the bathroom.
I tell my kids that I will buy them food and clothing, but anything else they want they have to pay for on their own– through their own work (or wait for birthdays/Christmas).
$3 a week to keep their room clean? Jefferson, I’m going to talk to your children about starting a union. You know how hard it is to keep your room clean at that age? It’s IMPOSSIBLE! (I’m applying for the job as their union rep.)
Don’t you dare tell my kids they’re underpaid!! They have no idea. 😉
Seriously though, I will never give my kids an allowance just for breathing. They will do some sort of housework, yard work, etc. if they want any money at all. If they don’t do any work, they don’t get a dime. We’re mean, I know!!
HILARIOUS — I am glad you have children. Also, your ads are completely appropriate. When I looked, you wrote, “let Timmy screw up” and there was an ad for “Childcare 2012” — it’s like your ads were the punchline!
Thanks! My kids aren’t glad they have parents all the time, though, FP…..
I don’t have kids yet but my parents are kind of a financial mess and so they had no consistent teaching on money. Sometimes I would get an allowance just because, sometimes I had to work for an allowance, sometimes they gave me pocket money, and sometimes I got nothing. That money was also not tied to any real purchases as they always got me what I needed/wanted so I never had to save money for anything (and certainly not give it!).
Yet, I think I’ve turned out OK as I decided to become self-taught about personal finance starting right when I graduated from college. I never had trouble with credit cards or things that you might expect from someone with such a haphazard/nonexistent education about money. So I guess I’m just saying that even if you pick the wrong method or have no method at all, it’s not like you’ve irreparably screwed up your kids. Ultimately it’s going to be up to them and you can learn from sources other than your parents. That said, I definitely plan to try to pass on my values concerning money to my children through tangible lessons.
I read that same article, and was hoping someone would do a post about it! I’ve run into those kinds of parents before, at my previous job teaching preschool (you wouldn’t believe the stories I have) and as a mom myself. We’re old school and my kids,3 of them teens, think we are too tough sometimes. However, they’ll thank us one day and realize how wise we are, just like I did with my parents! Loved the article, great job.
I can’t imagine the stories. Sometime I’ll have to tell you the hilarious thing a two year old at day care told a friend of mine…shocking and very adult-oriented.
Isn’t it funny how mom loses her brains and then regains them when you reach your twenties? Weird….
My parents did not teach me the best money management skills. My parents lived cheap. But when they wanted something they went and bought it. When I was younger I did not understand that they saved for this. This stuck with me, and now I catch myself impulse buying all the time.
Wow, that’s pretty intense parenting for… an Easter egg hunt! I wonder what those parents will be like when it comes time for college applications.
Easter egg hunts have gone bananas on account of the parents!!!
I’m in agreement of letting your kids off the leash to see what they do on their own. There are many times I sit back and listen to how my son and daughter interact with each other. Who will win the fight? How will they resolve it? It’s never anything serious, but I can’t always be rushing in to protect them. How would they ever handle themselves at school if they always relied on Dad to protect them?
On the money, we’re definitely letting them practice buying things on their own. They’ve got their money and that’s that. Once its gone, they know its back to doing chores (work) for more.
This is a great idea. My mom paid us a small allowance, but we never had to buy popcorn at the theater or other such stuff. Toys, yes, but the little things, my mom usually covered until we were in our teens. I think I’ll go with your approach for my own children!
We’re one of them no-allowance child labor exploiters. At least that’s what our kids have told us.
Bravo! Supervised failure is such a great way to teach anybody a lesson. I can’t believe how much people coddle their children these days. I’m not saying be harsh, but let them lose every once in a while. Because the larger world certainly isn’t going to grab them by the hand and show them where all the Easter eggs are.
I think you make a good argument about teaching your kids about finances. Give them a larger than typical allowance and let them pick and choose what they want and what they don’t need. But do you honestly believe this will actually work?
Teach him how he could have bought security by saving or investing that money.I think money investing is probably the last thing on a child’s mind, and they will likely care less about your lesson.
Good comment, Mike. Here’s what I meant: the toy they chose (in our case the latest one was an Apple Touch that was wrecked within two weeks…expensive lesson, huh?). My son wants some bigger stuff now. Instead of wasting that money and not taking care of his stuff, he now has to save again for the same things. If he wants to buy new stuff in the future, he’s going to have to start over again. If he let dividends pay for his “stuff”, then he has the security of the investment.
What did he do with the next money he earned? He bought Ford stock.
I guess it all depends on the age of the kid as well. A teenager would likely be a bit more forward thinking then say a 7 or 8 year old who would rather have the instant gratification.
Absolutely, Mike. I should have clarified that it’s a conversation appropriate for teens. When my kids were young we just talked about about taking care of their things and respecting what they used good money to buy.
I like what you’ve done with your kids as far as the “allowance.” I’ve long stated that my kids will never get an allowance, they will work for their money… BUT, at a certain age (yet to be determined) I will teach them how to run a checking account by giving them a certain amount each month and making them pay for things that I would otherwise pay for… (clothing, toys, entertainment, etc). Sounds similar to what you’ve done.