Unless you're of the Rockefeller-rich kind, your kids probably can't (and shouldn't) have everything they want. And yet, as any parent knows, that isn't going to stop them from asking, begging, pleading and whining every time a new iPod accessory, dancing robot or outrageous pair of skinny jeans becomes available. How can a parent say no and actually get their child to listen and understand?!
Here's how to tell your kids they can't have everything, and teach them a little bit about finance in the process.
1) Tell the truth
There's one big reason why some parents don't tell their kids why they really can't have all that they covet: they don't want the answer to get around to Little Emma's parents next door. After all, your financial situation —and that the bank account can fall pretty short at some times of the month - is hardly any of their business. Well, neither is your sex life, your late-night candy habit, or the way you 'cook' frozen pizza for dinner at least once a week - but when you have young kids, news about that gets around the neighbourhood too, and life goes on. The alternative — that your kids won't know anything about your carefully guarded financial situation — is worse, at least in the long run. Why? Because your children's financial literacy won't improve...or even get started.
There's a reason it's called "literacy." It's a lot like learning to read: essential, influential and best tackled at a young age. So, if you tell your kids they can't have something, tell them exactly why that is, and take the time to explain it in some degree of detail. This isn't easy, but it gives your kids a better sense of the finite nature of money, rather than letting them believe that everything can be solved with a credit card. And your neighbours...they might actually like you better.
2) Be compassionate
Some of the things kids ask for seem a bit, well, ridiculous, but keep in mind that for kids, the desire for these things feels perfectly rational. And frankly, your kids aren't the only ones in the family who covet things that are unaffordable, unattainable or impractical. Rather than brushing off their requests, acknowledge and respect them - even commiserate. Then work with them to determine what it is they want out of the item and brainstorm some alternatives. For example, if your little boy is begging for a new video game, perhaps he could set up a trade with some of his friends. Being able to make reasonable substitutions for things is a way to take control of your life, rather than feeling like a victim of what you can't afford. The sooner your kids learn this valuable trait, the less likely they are to struggle with overspending later in life.
3) Give a little
You wouldn't want to give your kids everything, but it's important that you acknowledge what's really important to them and try to meet them halfway. Sure, you might find this year's neon high-top sneaker fad unflattering and impractical, but for most kids, a sense of belonging is important and possessions are a part of that. Be honest about what you can and can't afford, and allow your kids to make choices about what matters to them. If the sneakers are the be-all and end-all this season, offer to buy them if they're willing to trade off on other things ("yes, you can have the shoes, but not the skinny jeans"). You don't have to meet all your kids' demands, but if you can accommodate something they really want, they will be more likely to back down on a number of other requests.
4) Get them involved
The best way for kids to understand how money works is to have some. For young children, this usually means an allowance. This gives them an opportunity to make decisions on their own, and gives you a few chances to prompt them to save for something their little spendthrift heart desires. If they spend all their money on bubble gum or video games, so be it. Just make sure they know that you won't fill in the gaps until the next "pay day."
Setting them up for their future
If you say yes to everything your children request, you'll end up broke — and they'll end up spoiled rotten. But rather than just saying "no," use their requests as an opportunity to discuss the things you can and can't afford. It's harder than saying no - and your kids probably won't like it one bit better - but maybe someday they'll appreciate it far more than whatever it is they happen to want (neeeeed!) right now.
GoldenGirlFinance.ca is a free personal finance and education site for women.