Raising Financially Savvy AND Grateful Kids

What is the word you hear Baby Boomers and Gen X’ers use most often to describe Millennials and their children?

Entitled.

Sadly they aren’t wrong. Since the birth if the baby boomers, each subsequent generation has had substantially increasing advantages and opportunities. Unfortunately those increasing opportunities don’t seem to equate to an increase in thankfulness or an increased understanding of value. Conversely the sense of entitlement has only strengthened.

Everyone expects their participation ribbon, even if they haven’t don’t a thing to earn it.

Sadly, we parents tend to hinder rather than help in this department. In the era of “helicopter” and “child-led” parenting, our kids rarely fight their own battles, or learn from natural consequences. We’re far too quick to step in and “protect” them.

While I’m all for some of the concepts in today’s parenting world, swinging the pendulum too far in any direction is likely to produce negative results. Like anything, balance often seems to be the best rule of thumb.

Amd as much as we all want to give our children the world, doing that is the surest way to ruin their chances for a successful and contented life.

So how do we instill a balanced sense of appreciation and gratitude in our kids that will not only help them find contentment in their adulthood, but develop an early understanding of value on which to build strong financial literacy?

We certainly know that telling our kids stories of us walking in the snow to school, in our pajama’s, uphill both ways is not going to teach them appreciation. I remember my grandparents telling their “woe is me” stories in an effort to open my eyes to the wonderful childhood I was experiencing. Sadly the only attention I paid to this approach was to muster the small effort to exchange an eye roll with my sister and brother.

Telling kids how lucky they are compared to how “hard” we had it does zip in terms of their appreciation.

But here’s are few ways that will work, and have the added benefit of building their financial literacy.

The Family Vacation:

Going on a vacation is a privilege, not a right, and there are a lot of people in this world who simply don’t have that luxury. But getting our kids to understand that is a whole other ball of wax.

Here’s two very different approaches to helping them do exactly that.

1 – Have Them Contribute

Talk about the cost of family vacations with your child. Not as a lecture about how expensive it is, or that they better be thankful, but as a discussion to collect their input.

Present the topic at a family meeting to plan out where/what your family budget will allow for the next vacation.

Setting an annual budget for vacation(s) and then talking about the budget with your kids can help them get creative and feel they have input in how you are spending your time as a family. (Even though Mom and Dad will be the ultimate decision makers.)

If your kids understand that a week in Hawaii costs a lot more than a weekend trip within driving distance of home, they might choose 2 or 3 small more frequent trips over one annual trip, or they may even decide to skip a vacation altogether one year to help facilitate a larger trip the next.

Whatever the decision, they’ll feel more excited about your plans if they feel they have a say, and they’ll develop a greater understanding for the planning and costs that accompany these opportunities.

To take this one step further, have each child contribute financially to the annual vacation budget. It could be as small as a dollar each year, into the hundred’s of dollars. Make your selections age appropriate and reasonable given the money they will receive or earn in a given year.

The first year we tried this with our oldest son, we had him contribute $5.00 for our family trip to Hawaii. He was very proud to hand over that $5.00, and because he felt that he had contributed, he both enjoyed and appreciate the trip that much more.

The concept stuck with him, because a couple years later when he proposed a plan for our family to go to Disneyland, he outlined exactly what he was willing to contribute to the trip along with a plan for how he was going to earn that money. He was only 6 at the time, but decided that he was prepared to contribute $267.00 to the trip. A seemingly lofty goal for a 6 year old, but lo and behold a year later he had diligently saved money from birthdays/Christmas, collecting bottles etc, and was very proud to hand over the cash to his father and I. (We were also pretty proud!).

Every kid, no matter how young or old loves to feel like they are contributing, so give them the opportunity to do exactly that.

What you do with the money they contribute is up to you. You could use it for the trip, spend it on something memorable to do during the vacation, or save it for them later in life. You could even put it directly into a investment account that will allow their hard earned savings to build over time, hopefully providing a decent amount for some future endeavour they may have as young adults.

2 – Donate the Family Vacation

Another excellent way to help your kids understand the privilege of a family vacation is to discuss donating all or some of your family vacation budget to a family in need, or a local charity.

This not only helps foster discussion with your kids about what the vacation budget is, it also get them thinking about others who are much less fortunate than they are.

Including them in discussion about what charity to choose, or even allowing them to research and select a charity for their “portion” of the family budget, will assist in developing awareness of other peoples circumstances and challenges. Plus it gives them an opportunity to put others before themselves.

Birthday’s & Christmas

Kids expectations of what they will receive at birthday’s and Christmas is at an all time high. I’ve heard my oldest son ask more than once if there will be “more this year than last year!”. It makes me cringe every time.

Sadly it’s a great representation of how things can quickly get out of control, even when you’re trying to keep it low-key! But here’s two ways to curb that appetite for more, AND cultivate their sense of appreciation.

1- Give An Experience

This is not a new concept, but I think people can start with kids at a much younger age than most consider.

Omitting the typical birthday gifts, birthday party, or Christmas present, and instead replacing it with an experience you can share with your child is incredibly helpful in generating gratitude. Kids desire for stuff is fueled by their environment, but what they naturally hunger for is attention from the people they love the most. So why not give that to them instead of more stuff?

It can be as incredibly cost effective as having a special lunch at a favourite restaurant, or a gift card to all go play at the arcade together, to buying tickets to their favourite sports team or maybe even a trip somewhere as a family.

Parents naturally want to do as much of these types of things with their kids as they can. But if you do too much of it without reason, it can quickly turn into an expectation that they won’t even recognize to be thankful for. By giving it as a gift, you are still able to do these fun things, but it will be received and recognized as a gift rather than the norm.

You may very well choose to spend more than you would have on a traditional gift, but you’re creating memories your child will treasure, as opposed to buying more stuff that is more likely than not to find a home somewhere at the bottom of a toy box.

We try to find a happy balance of occasionally giving a traditional gift of something that has been asked for and wanted for an extended period of time, but prefer to focus on the experience gifts. We started doing those with our oldest when he was 5, and he very quickly started asking for them instead of things. We plan to start even earlier with our youngest.

2 – Pay It Forward

For kids who do receive a lot of gifts from family members and friends, a great approach is to have your kids select a set number of older toys/items to give away to someone less fortunate. (This also helps with cutting down on the clutter and offsetting the overwhelming amount of STUFF that can sometimes accompany holidays and birthdays).

We started this with our oldest when he was 4 and it helps turn some of the focus away from simply receiving to also giving, and realizing how good it can feel to give to others.

We started by having him pick one item for each year of his age to give away. It gave us a platform to talk about how other kids may not be receiving gifts for their birthday’s or Christmas, and how that must make them feel. Rather than just being a lecture about how there are others less fortunate, it allowed him to become an active participant in the conversation and selection of gifts, creating buy-in and generating a lot more thought than words alone.

It led to him giving a lot of consideration to the toys he picked, not just picking his least favorite (which I originally thought he might do), but also picking toys he really liked with the idea that if he had gotten a lot of enjoyment from them then so would another child.

It also has the added bonus od training our kids not to be little hoarders. Teaching them to part with their stuff at an early age (particularly stuff they are no longer using or getting value from) is an excellent habit to build.

Every kid is different, and so not all of these ideas may work for your kids personality. The important thing is to try different approaches until you find the method(s) that work for your family. If teaching your kids gratitude and value is a priority for you, they already have a jump start.

If you have any of your own idea’s or suggestions about how to instill these types of ideals in our kids, while building on their financial literacy, please leave a comment or send me an e-mail. I’d love to hear from you.