On Saving Children from Financial Mistakes

To me, financial expectations of young adults seemed to have changed significantly from the time I was in my twenties. From my freshmen year in college onward, I didn't expect my parents to take care of any non-education financial issues that I had incurred. Nor would my parents have taken care of them without my asking. In fact, I looked forward to showing financial independence as soon as I could, to the point of paying for almost all of my college costs in my senior year.

Nowadays, many parents take pride in saving their children from their financial mistakes. For example, I recently listened to a mother proudly tell how she reduced the several hundred dollars of overdraft fees that her son had incurred. In the next breath, she complained about how her son was planning to spend a significant amount to take his girlfriend to dinner. "Doesn't he realize he has no money in his account? He can't afford to take his girlfriend out. He better start looking at the free activities that are available."

While I think it was great to negotiate a reduction in fees, I couldn't help joking, " You know, he isn't too big to fail :-) Perhaps he would have learned something if he had paid the overdraft fees." Her answer was a brief, "Maybe I should have," and then returned to sharing other ways she has been a financial savior for her son.

In our case, I must plead guilty for saving our five year old daughter from her financial mistakes. Recently, she bought a card and then left it at the store. After telling her she may have lost her card and the money paid, I called the store and they located her card for us to pick up next time. For now, I think its OK to provide our daughter some help with her financial mistakes. She is still too young to grasp some of the basic financial concepts.

However, I have already started on some basics, such as opening a savings account and letting her pay for items with gift cards she has received. My next step is to let her spend some of the money she has saved. I'm not sure how well this step will go, since she is very concerned about how to replace the money she spends :-) Hopefully, our stepwise approach will allow our daughter to handle her own financial mistakes by the time she is in high school.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

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