Is your six-year-old begging for $100 sneakers? Does your teenager think a trip to Europe is her birthright? If so, your kids may be suffering from “affluenza,” which is a sense of entitlement affecting affluent young people. But how do you address it?
At times, most kids demand things and show little understanding that those things cost money. For most kids, this attitude fades over time. For some kids, however, it becomes a way of life.
Do you wish you could cure your child of affluenza? You can start battling the bug when your kids are as young as four by talking to them about finite resources and the importance of making choices. When shopping, discuss the difference between needs and luxuries. Shoes are needs; video games are luxuries.
From ages eight to 12, you can explain that there will always be kids less and more fortunate than yours. Teach them that they must make financial decisions within the context of what they have by offering them an allowance and refusing to provide more money when it runs out. Involving them in charity work may also help them appreciate how relatively fortunate they are.
When your kids become teenagers, you can involve them in family budgeting, bill paying, and investing discussions but also offer them an allowance to spend on nonessential items. For example, if your teenage son wants $100 sneakers, you might give him $50 to cover your portion and make him come up with the rest.
A mutual fund may help show your kids the importance of saving and investing, and there are ways to set up accounts in their names while they are minors.
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