How to Avoid Creating Entitled Kids and iPad Mini Giveaway

How to Avoid Creating Entitled Kids and iPad Mini GiveawayA common desire among parents is to give their kids a better life.

We pride ourselves on being able to give our kids whatever they want as proof of our love and ability to provide for our family. This seems innocent and what every parent should strive for – right?

The intent is certainly understandable, but the outcome can be a mixed bag. I’ve been a Certified Financial Planner for more than 20 years and many times I have sat down with distressed parents who inadvertently created entitled kids. Their kids left home ill-prepared to manage their finances because they were simply used to being handed everything and expect Mom and Dad to continue to do so indefinitely.

It’s very easy to look from the outside and say they should let their adult kids fend for themselves, and eventually they will need to cut the financial cord. At the same, it also much harder to watch your kids struggle and do nothing.

This is why I advocate so strongly for parents to talk to their kids about money when they are small, so when they leave home, they have the firsthand experience and confidence to make good decisions with their money.

 

3 Money Lessons to Avoid Creating Entitled Kids

Teaching kids about money does not rob them of their childhood. It helps prepare them to succeed as adults. Here are three important money lessons every child should learn.

 

Set Save, Spend and Share Goals

Goals act as our best defense against mindless spending and playing “keep up”. My girls have set individual save, spend and share goals every year since they were six years old. Every time they earn or receive money, they immediately allocate it to their goals. They have learned to slow down when they discover a new toy and decide whether it is more important than their goals. More often than not, they decide it’s not worth delaying goal achievement and walk away without feeling deprived.

Success Tip: Make sure the first share goal is something tangible, so they can experience how good it feels to share. My daughters LOVE to share because it makes them feel so good to help others. Often times, the first goal they exceed is their share goal, and they choose to share more than 10% of the money they receive.

 

Money is Earned, Not Given

Allowance is always a hot topic among parents, and I am not a fan of a traditional allowance where money is just given for no reason. My girls earn money through a weekly job chart I post. They can choose which jobs to take, so they can earn as little or as much as they want. If they do a poor job, they may get paid a reduced amount or not at all. On the flip side, they can earn the occasional bonus for doing an exceptional job.

My girls really love this system because they control how much they earn. Mom loves it because now they ask me for more ways to earn money when they find something they want, instead of begging me to buy it for them.

 

Let Them Make Money Mistakes Now

One of the hardest things to do as a parent is watch your child struggle and make a mistake, but I would rather they make a small mistake now than an expensive one as an adult. It’s important for kids to experience the consequences of their money mistakes and learn how to recover from them too. Now they will have the skills and confidence to be nimble on their feet when mistakes happen as adults.

These money lessons help minimize the chances of creating entitled kids who depend on you instead of themselves as adults. Now you have truly given your kids the tools to create a better lives for themselves. And that is real parental love.

 

Making Money Conversations Fun and Easy

Financial literacy is my passion, and it is easy for me to talk to my girls about money, but I know it’s a struggle for some parents. One easy and fun way to help you start these important conversations and shape how your kids think about money is through my children’s picture books. I’m pleased to offer Making Sense of Cents readers an exclusive coupon code TOUR3114 for $3.00 off my new book, The Lemonade Stand. Join Lauren and Taylor in their continuing money adventures as they teach their friends, Ryan and Christopher, how easy it is to save, spend and share.

About the Author: Shannon Ryan is a Certified Financial Planner and a Mom on a mission to help busy parents teach their children simple, value-based principles that guide their money decisions and support their long-term financial well-being.

 

The Lemonade Stand – iPad Mini Giveaway

July 14-31, 2014

Brought to you by The Heavy Purse

Co-hosted by Are Ya Gonna Eat That, Broke Millennial, Budget and The Beach, Budget Blonde, Budgeting for More, Busy Mom Budgets, Cash Cow Couple, Cents and Sensibility, Club Thrifty, Color Me Frugal, Debt Debs, Debt Roundup, Disease Called Debt, Eat Laugh Purr, Enemy of Debt, Eyes on the Dollar, Femme Frugality, Financially Blonde, Frugal Rules, Living Richly Cheaply, Luke 1428, Making Sense of Cents, Money Saving Dude, Monster Piggy Bank, Not Now Mom’s Busy, Reach Financial Independence, Shoeaholic No More, Stacking Benjamins, Tackling Our Debt, The Broke and Beautiful Life, The Finance Girl, The Frugal Farmer, The Random Path, Thrifty Dad, VeegMama and Young Adult Money.

 

We’re Giving Away an iPad Mini to One Lucky Reader!

Help us celebrate the release of The Lemonade Stand and join Shannon in her mission to increase financial literacy in both children and adults.

“Everyone handles money. Unfortunately, not everyone does it with confidence. Money has long been a taboo topic in many homes, which makes it even harder for parents to know where to start or what to teach. So I created a series of children books to help parents ease into these important conversations. Financial literacy is one of the most loving gifts you can give your children, and I encourage you to make money conversations a priority in your home.”

The giveaway runs from July 14-31, 2014 and is open worldwide.*

* A winner located outside of the United States will receive a cash equivalent prize via PayPal.

a Rafflecopter giveaway

Reason to Have an Emergency Fund: Medical Emergencies

Reason to Have an Emergency Fund- Medical EmergenciesEnjoy this post from my blog friend Natalie. Emergency funds are extremely important, especially in the case of a medical emergency where you have to pay a large amount out of pocket. 

A few weeks ago, I had one of the scariest things happen to me.

My long-time partner and boyfriend began to start getting really sick. This wasn’t just a case of a fever and the sniffles.

The symptoms were a little bit more serious than that. He began to get severe stomach pains along with a completely loss of interest of eating or drinking.

I will spare you the more gruesome details but it got really bad. It finally ended with his fever spiking to almost 103 degrees and me rushing him to the emergency room of the hospital.

My boyfriend is one of these people who you would never consider being sick. He is one of these people who barely gets a cold. In his work, he works with carpentry materials to help repair homes in the area. This line of work also requires him to lift heavy materials and do lots of physical work. His physical health was so good that it knocked us all by surprise.

Suddenly he was extremely lethargic and could not even get out of bed. The once fun-loving person that I knew was being taken over by some invisible and frightening ailment.

The night I finally took him to the emergency room, my boyfriend was in a state of panic.

 

He was worried about the financial aspect of him having a medical issue.

His fever was out of control and he could barely stand up. He was also in a state of panic because of the costs that would be incurred from all the emergency room bills. I told him to basically shut his mouth up over those types of thoughts as his first priority should be his health.

I didn’t fault him for having thoughts like these.

We just happen to be a couple that care a lot about money and we both work hard to be financially stable. When something like this happens, many would feel unsure about how they will pay such medical costs. This is certainly true in the United States.

My boyfriend was lucky enough to be immediately seen by the medical staff. They ran a series of tests and discovered that his colon was very inflamed. Under the doctor’s orders, his health had been deteriorating to the point where it was decided that being hospitalized was the only option.

My boyfriend’s reaction went into further panic as he realized what this meant especially for the finances.

I tried to convince him of otherwise as I knew stressing out could only make his condition worse. He was placed in a hospital room where he could be monitored by the professional staff.

For the next couple of days, my boyfriend was given several procedures and medications that at first did nothing. I went to the hospital every day and tried to console my boyfriend through this difficult time.

He once again expressed his fears of the cost of being in the hospital. I let him know that there is not enough money out there to replace someone’s health.  I also reminded him that we had an emergency fund that was precisely for occasion like this as this was a bona fide emergency.

 

There is no bigger reason to have an emergency fund than in situations like this.

You just never know when the proverbial crap will hit the fan and require you to have liquid assets available.

We had absolutely zero notice that something like this would happen. Medical situations are one of those things that usually pop out of nowhere and can be very destructive if you are living on the financial edge.

The truth is there are too many people out there that are living paycheck to paycheck. Too many people do not think of having a form of savings as a priority and nothing could be further from the truth.

I once had a friend that had some major complications due to her high-risk pregnancy. She never took the time to save as she felt it more important to buy nicer handbags and other pricey things.

As a result of no savings or health insurance, she winded up with over $15,000 in medical bills.

The resulting stress on her psyche and family caused her even more health problems and later more health bills. She applied for government assistance and was given some help after a big battle with paperwork and authorizations. She could have avoided a lot of stress if she had saved something in advance.

As I write this, my boyfriend is still recovering from the hospital and will hopefully be home soon. He finally accepts the fact that it will not destroy us financially since we have a savings fund and health insurance that has a set limit on what we are liable to pay.

Being able to concentrate on what is important is such a relief in times like these. It has literally helped me sleep at night. I can’t imagine what we would be doing without it.

Having an emergency savings account (Do you know how much you should have? – I have a related post on this on Diversified Finances) is of utmost importance especially in a world that guarantees nothing.

Taking the initiative to do something for your financial future is crucial. Learn from my own story because you just never know when you will need money now. My boyfriend and I are able to focus on plans to get him back to normal health and that is what is important. Please take the time to prepare for life’s unexpected pitfalls so that you don’t end up in the financial hole.

This is a post by Natalie over at Everything Finance.  Everything Finance is a site about just that, everything related to finance.  You can get information about investing, saving money, insurance, shopping, blogging, CD rates, and making money online.

 

Do you have an emergency fund? What does it cover?

 

Reader Question: How to Split Bills Without Resentment

Reader Question: How to Split Bills Without ResentmentThe other day I received an awesome reader question, and I really wanted to share it all with you since I’m not sure what the best way to approach this situation would/should be.

W and I have joint finances. We have a mortgage together, cars in both of our names, and all of our money goes into one pot. We’ve been doing this for years now and haven’t had a problem with it ever.

However, different couples do different things. Some split everything their whole lives. Some split expenses according to income. Some just throw everything into one pot. There’s no one right way that fits all couples.

This couple does things a little differently from us in that they split their bills. Not evenly though, and that’s where this reader question comes in.  I’ll let her question take it away now.

 

Hello! I enjoy reading your blog and have a question I hope you can
help me out with!

My boyfriend and I are moving in together and likely our first move is
going to be him into my small condo. We decided this is a good
temporary option for us (for as long as we can make it work) because
our ultimate goal is to buy a new house, hopefully while keeping my
condo as a rental and we are starting to think about saving for our
wedding as well.

I bought my condo almost two years ago to be comfortable financially.
I never saw myself getting into mortgage payments I couldn’t afford on
my own, so it’s totally manageable. I think the stubborn part of me
still doesn’t want someone to pay my mortgage for me, so in initial
talks with my boyfriend, I said if he just paid all the bills, I’d be
fine with it. I’m not a fan of nickel and diming to split everything
down the middle and the idea of him writing me a check for rent and
his share of the bills weirds me out!

Obviously I’m still saving money if we go with the original plan and I
get an awesome new roommate, but I don’t want to end up resenting the
arrangement.  The difference is about $450 a month and he makes 25%
more than me.

What are other options without ending up leaving passive aggressive
notes around asking for payment? Thanks!

 

So what would you do if you were her?

Let us know in the comments below. All help is appreciated! Also, please be kind. Keep in mind that this is a reader question.