Preventing affluenza
No, it's not the flu. Affluenza is a term first coined by Fred Whitman in the 1950s to describe a child who grows up with social and financial privilege. This is quite common these days, whether you are wealthy or not. Many parents have overindulged their children, making millennials one of the smartest and most educated generation of all time — but also the most entitled.
Let's face it: As a parent, you want nothing but the best for your children. Most parents have worked hard all their lives and generally want their children to have a better life. You want them to have the necessary skills to be successful adults, have a solid education and be whatever they want to be. But be careful.
There is a fine line between giving enough and giving too much. Many parents are not able to say “No,” but sometimes you should. It is necessary to teach the lesson that you don't always get what we want. Did you get everything you wanted out of your life?
Start young and teach your children about budgeting. Why not begin with the allowance you give them weekly — let's say $1 for each year of age, for example? So a child of 12 would receive
$12 per week. Sit down with your child and discuss the concept of paying himself/herself first.
Open a savings account for the child and get a debit card. Show your child how to use online banking to view the new account.
Of that $12, ask your child to put $4 every week into a savings account. Allow your child to spend $4 each week on whatever she/he would like, and share $4 with a charitable cause.
Spreading their new income this way will teach your children some very valuable lifelong lessons. They will recognize the value of saving over time as they see their $4 per week grow into more than $200 in one year. They will figure out how to make their $4 spending allowance stretch each week and build valuable budgeting skills. And they will also develop a social conscience by supporting local charities.
Why not sit down as a family and draw up a monthly budget that accommodates activities and purchases for every child in the family? By the way, parents should have this locked down for their own budgets and expenditures — so lead by example here. When someone invariably asks for something that deviates from the plan, you will have to say:
“No, that's not in the budget, but maybe we can make it part of the budget for next year.”
Learning how to keep your finances in order will ensure a good lifelong foundation for future achievements, while creating well-grounded expectations of what to strive for, including good habits to reduce debt, and the ability to create a successful lifestyle plan. Monetary setbacks are a fact of life for everyone. Skills learned when they are young will help your children as adults, too.