“You have to do your own growing no matter how tall your grandfather was.”
― Abraham Lincoln

little girl with piggy bankA few weeks ago, the story of a 22-year-old college student who had blown through her college fund too early, blaming her parents for her own poor financial decisions, caused a commotion on the internet. The college senior detailed her financial woes on an Atlanta FM-radio show whose wisecracking hosts derided her.

As Fox news reported, “This college student deserves an “F” in accounting after she blew through a $90,000 college fund on expensive clothes and a trip to Europe and now has no way to pay for her senior year, a predicament  she blames on her parents.”

The young woman told “The Bert Show” that it was all her parents fault for not showing her how to manage her money. “Maybe they should have taught me how to budget a little better, a little more carefully,” she told the show.

Thousands of online shares and comments mocked her attitude that getting a part time job would be “embarrassing” and that getting a school loan would be a hassle, complaining she would actually have to actually “go inside a bank” to apply. She had expected her parents would simply pony up more money, but they wouldn’t, which left her in a quandary. Callers to the show called her a “spoiled brat.” Listeners belittled her on Twitter as the millennial who was giving millennials a bad name. Many listeners also blamed her parents… for raising such an entitled daughter.

The $90k college fund had been established years earlier by her grandparents, and her parents actually did give her specific instructions (as we explain in the Ultimate Guide to Financial Planning Myths), telling her the fund was “for classes only,” as the student told the show. However, that didn’t stop her from treating it like her own personal slush fund – and blaming her parents when the money ran out.

How to Prevent Children from Growing Up Entitled

It’s every parent’s nightmare to raise a child who grows into a spoiled, dependent adult. Perhaps we are willing and able to pay for our child’s first car and/or college degree, or assist them in starting a business or buying their first home. But how do we ensure that our support doesn’t stunt their own financial ability and confidence? And if we are “parents of means,” how can we take measures to inoculate our children from attitudes of entitlement? Let’s look at nine ways to AVOID this problem and nurture self-reliant, money-savvy kids.

  1. Encourage Earning

Recently, our marketing coach and writer, Kate Phillips, shared her experience of her daughter’s journey towards independence while attending college in “How I Lost My Daughter’s College Fund (and the Lessons Learned).”  One reason her daughter became readily self-supporting is that she has held part-time jobs during since she was 15, working in her father’s catering business as well as working for local farms or restaurants during summer breaks.

Some parents don’t want their children to have to work until after college, but that does not help children build the financial confidence that comes from earning.

  1. Exposure to Money Management

Kate’s daughter also managed her spending since grade school, when her allowance was expanded to cover school clothes as well as lunches. The money came from Mom, but she had to learn to prioritize lunches and other priorities before shopping.

As I mentioned in a Prosperity Podcast Episode, “Talking With Your Kids About Money,”  opportunities arise early to teach children about money, such as when they see something they want in a store. When our children ask us to buy them something, it can be an opportunity for us to educate them about:

  • Math. Give them a set amount to purchase, letting them add the cost of items and tax together to ensure they have money to pay for what they want.
  • Let children make their own choices with limited amounts of spending money.
  • Budgets/ Spending plans. Educate children that adults don’t spend “whatever they want.” Rather, they have guidelines to ensure that they live within their means.
  • From sales racks to online discounts to discount stores, children should be exposed to savvy shopping strategies.
  • Values and Priorities. Perhaps you don’t personally choose to spend money on certain items, such as health-sabotaging junk food, violence-based games, or luxury apparel brands that cost five times more than comparable items without the label. Our spending is an important expression of our values.
  • Concepts of “No” or “Not Now.” Just because a child wants something does not mean we should buy it! We can teach them to work towards what they want.
  1. More Than The Numbers

We need to focus beyond financial education alone. Financial responsibility isn’t just about money, it’s about character and personal responsibility.

The college senior who had drained her college fund accused her father of being a “little bit of a jerk about it” after she told him she was broke and they refused to bail her out of her self-created predicament. “They’re not being honest with me, saying they don’t have (the money) because my father has worked for like a million years and they have a retirement account,” she said.

Her parents suggested she take out a loan with the credit union. Her response? As she told the radio show hosts,  “And I’m like, ‘How am I supposed to do that?’”

Dr. Keith Ablow says the parents are also responsible for the situation, not because they didn’t teach her accounting (after all, she learned how to add and subtract years ago), but for not teaching her character! “When your child is behaving like this, you’ve got to look in the mirror and wonder why you could not pass your values along.”

With some sympathy, Dr. Ablow acknowledges that it’s tougher in this social media world for parents to impart the values they hold dear. It is likely that her friends – who may have had more money for vacations and clothes – were a much greater influence than her parents. (Though clearly, she had an expectation that her parents would bail her out, confessing that she noticed the tuition account dwindling.)

How do we combat the influence of the culture on our children’s character and sense of responsibility? We need to continue to look for chances to impart important life lessons as well as financial lessons.

  1. Give Them Responsibility

Happy boy at the table with moneyMake sure that you are not “doing” too much for your kids, but encouraging them to do for themselves. My sister has had her kids doing their own laundry since they were in grade school! Taking responsibility for their own laundry actually solved the problem of ruined and lost clothes.)

My kids are anything but spoiled, and have helped on the farm and been responsible for chores for a long time. Earlier this year, my kids helped us at home with a big landscaping project. Recently, my daughter spent several days working hard and cheerfully, helping her grandfather on home projects. We’re covering their college expenses, but they truly do earn our support!

Perhaps instead of giving our kids what we think they “deserve,” we should give them what they’ve EARNED.

  1. Start Them Saving!

When children want something that won’t be covered by their allowance, such as a vehicle or a trip, teach them to save for it. Depending on their age and the saving project, this could include: giving them extra allowance for extra work, matching funds, encouraging/ helping them to find work, assisting them start a mini-business (from lemonade stand to lawn mowing) or start a fundraising campaign (from candy bars to kickstarter).

  1. Educate Outside the Classroom

As valuable as reading, writing and arithmetic are, no education is complete without exposure to those less fortunate and participation in service work. Whether volunteering in a soup kitchen or shelter, viewing documentaries about the third world, or taking a “vacation with a purpose,” there are many opportunities to learn service, gratitude, and the bigger picture of the world.

My kids have learned both the importance of helping others and the inherent value of work… even when it is not connected to an hourly wage, such as through chores and volunteering. My daughter Kaylea publish her first book about her experience in an impoverished part of South Africa with a non-profit organization: Every Day Is  Miracle: Lessons from Susan Rammekwa. The book is available on Amazon and is a fundraiser for The Simuyne Project, the organization that coordinated her trip.

  1. Teachable Moments (Is Anything Really “Free”?)

When my daughter said that she would get a “free Gym membership” at college, I corrected her thinking so she understood it was not “free,” rather, it was “included” as part of her rather pricey tuition package! Teaching children to think critically about costs and also advertising is an important part of parenting. And when they get offers for “0% credit cards” in the mail, they need to understand there is no such thing as free money.

  1. Practicing Generosity

Whether through tithing to a church or donating to charity organizations, having children donate a portion of their allowance or participate in family donation decisions is a powerful way to teach them discipline and values. And according to author Thomas Stanley, the habit of giving will also make them more likely to acquire wealth!

  1. Consequences

The Millionaire MindWhen adult kids make poor financial choices, they need to take responsibility. Adult children that are repeatedly rescued lose the ability and confidence to help themselves, and will keep coming to the “Bank of Mom” (or Dad) when they do not plan well.

Thomas Stanley, author of The Millionaire Next Door, The Millionaire Mind, and other books, calls financial gifts “economic outpatient care,” and is adamant that such financial gifts usually backfire. The research gathered from many interviews with millionaires shows that the more a child is given, the less they tend to save, and the less financially responsible they end up being.

The fundamental lesson that Stanley repeats again and again in his books is this:

If we want our children to be self-supporting, we have to stop supporting them.

You may wish to go ahead and loan money to your kids or even have a Family Bank that does so, but be clear on the terms – in writing – and differentiate between gifts and loans that must be paid back. Lay out the “what if’s” if a loan is defaulted on, and stick to the agreement and consequences (barring extraordinary circumstances).

What NOT to Do…

Don’t try to start educating your children on values and responsibility when they are 22 and already entitled!

After her initial interview with the radio station, the now infamous college student called back to tell the show she went down to the credit union after all to apply for a loan. The credit union required her parents to co-sign because she didn’t work and didn’t have collateral. Her parents wouldn’t co-sign unless she got a part-time job.

By her fourth call to the station, it seemed her situation had improved. Her loan had been approved and she was looking for a job, as much as that pained her. She was also still blaming her parents.

“I know they’re trying to teach me a lesson blah, blah, blah and character building, but like I hope they realize that this (working) can have such a negative effect on my grades and as a person,” she said on the air. (Sigh…)

For More on How to Avoid Raising an “Entitled Generation”

Read Thomas J. Stanley’s The Millionaire Mind,  which details the negative impact of continued financial support, or “economic outpatient care.” Also listen to The Prosperity Podcast, episode with P4P’s own Kim Butler, “Talking With Your Kids About Money.”

And we welcome your own tips or comments below! What do you do to keep your children from becoming spoiled?