Dad playing with kids

Parenting With Wealth – 5 Things To Never Tell Your Kids

I have been reading a few books lately about steps that wealthy families can take so that their kids do not end up as spoiled, entitled brats who lack ambition. Money can solve many of life’s problems and lead to a wonderful lifestyle. Sadly, parenting with wealth is not easy and, in some respects, makes parenting much more complicated.

Parenting with wealth brings added complexity:

Money in and of itself does not corrupt children, and many wealthy families raise exceptional kids. However, parenting with wealth brings some added complexity and requires teaching corresponding money values to your children. Many adults do not have a clear view of their own money values and therefore send conflicting or inappropriate money messages. A couple of the books that I recommend on the subject are: Raising Financially Fit Kids, Raising Financially Confident Kids, and The Opposite of Spoiled.

Below is a partial list of things you should never say to your kids or grandchildren:

  1. We will pay you $100 for every “A” you get on your report card. This could just as easily be $20 for every goal you score…or a million other examples. The bottom line is bribery is not a good parenting technique. It teaches kids that the reason to achieve things is to get paid and please your parents. The better motivation is self-satisfaction and a feeling of achievement.
  2. We can’t afford it. This is a common response to a child’s request. There are three problems with this response: a) It’s usually untrue, which the child will clearly see as you spend money on everything else under the sun, b) It’s a lazy way of avoiding the conversation that you should have about money values (e.g., trade-offs, you have enough toys, no room in your closet, I already bought you one souvenir and that’s enough, etc.) and c) It communicates that the only reason not to buy things is there is no money in your wallet. A better response would be to say, “We are not going to buy it because we are choosing to spend our money on other things.”
  3. Time is money. This phrase teaches kids to place a monetary value on everything. You should not try to impress your kids with your hourly wage. Also, a phrase like “I can’t coach your soccer team because someone has to pay the bills around here” sends negative messages about what is important in life. The number one thing kids want and need is for their parents to be present, not just physically but mentally.
  4. Aren’t you glad you don’t live there? Naturally, we all want our kids to be appreciative of their good fortune, but the implication is that people need to live in a neighborhood like yours in order to be happy. You have to be careful about associating happiness with money. When children get this message, they often think money will make them happy and are disillusioned as adults when money doesn’t buy happiness.
  5. That’s none of your business. A variation of this is “That’s an inappropriate question.” Kids ask a lot of tough questions such as: Are we rich? How much money do you make? Do we have more than our friends? These may be uncomfortable, but they are teachable moments. The most important thing is to develop an atmosphere of open communication with your kids. Curiosity is good and you want them to feel secure financially, which is at the root of many of these questions. Do not preface your answer with “This may not make sense to you now, but you’ll understand when you’re an adult.” This will only insult their intelligence and make them feel bad. So, answer the questions as honestly as you can. You do not want to make money a taboo subject. However, it is okay to tell your children “Some matters should be kept within our family, including our family’s finances.”

Recently, a client was lamenting how he had a falling out with one of his children after he had worked so hard in order to give his family everything. Giving your family everything is not easy, but the more difficult (and often more successful) course of action is not giving your kids everything, especially when you can.