Preparing for retirement in a day and age when gold watches and generous pensions are...
How to break the generational debt cycle
Got debt? It is strangely ironic that the freedoms and affluence we enjoy in our society are the very things that stand to ruin our lives if not addressed early and effectively.
The consumer-credit industry is doing all it can to get all of us, especially millennials and our kids, to fall for the buy-now, pay-later lifestyle. If nothing is done to intervene, statistics indicate that lives will be severely impacted not by credit—credit is not the problem here—but by the debt it can create.
How we are “conned” into debt
When the following three characteristics occur at the same time, they create a kind of “perfect storm” that has all the likelihood of creating a disastrous situation:
1. Attitudes of Entitlement
2. Financial Ignorance
3. Glamour of Easy Spending
For our debt-proofing purposes, “entitlement” is that demanding attitude that says, “I deserve it now even if I haven’t earned it or cannot pay for it.” Some call it the gimmes, others the I-wants. No matter what you call it, this attitude is running rampant, and not only among kids. Entitlement affects kids and adults alike.
Entitlement is subtle. It creeps into our lives when we compare our lifestyles and possessions to those of the people we respect and want to be like. It shows up in new parents who throw all caution to the wind when it comes to nursery furnishings and “mandatory” equipment. It shows up in two-income families who, because they work so hard, feel they deserve to have nice things. It shows up in adults who feel compelled to conform to society’s relentless ratcheting up of standards.
The 18th-century French philosopher Denis Diderot wrote an essay entitled “Regrets on Parting with My Old Dressing Gown.” It seems someone gave Diderot an exquisite gift—a scarlet dressing gown (not something your typical guy today would get too excited about, but remember this was in the 1700s). Diderot was so happy to get a new dressing gown that he promptly threw his old one away. Curiously, he hadn’t noticed how tattered the old gown was because it was comfortable and blended into his surroundings.
The contrast between the new scarlet gown and everything else in his study was startling. While Diderot was wearing the gown, he couldn’t stop noticing the threadbare tapestries, the worn chair, and the beat-up bookcases. Piece by piece he replaced everything with something more closely suited to the elegance of his robe. Diderot closes his essay regretting ever receiving the scarlet robe that forced everything else into conformity. Today, marketing professionals and consumer researchers call this constant reach for conformity the “Diderot effect.”
Entitlement is the standard message of marketing and advertising. Look carefully at everything that shows up in your mailbox this week. All the marketing or advertising pieces carry some underlying message that you deserve this, you need that, and you’ll never be completely satisfied until you do this or go there. Clothing catalogs point out changes in fashion; linen stores introduce the latest seasonal colors. The message to keep up is relentless. The push for conformity creates attitudes of dissatisfaction and entitlement.
With the explosion in the availability of consumer credit, which has encouraged conspicuous consumption, attitudes of entitlement have become all too standard. At every turn it seems something or someone is fanning the flames of entitlement in our lives—and our children’s lives too. Attitudes of entitlement, both yours and your children’s, are an enemy that, if not dealt with, will surely sabotage your efforts to develop financial confidence in yourself and your kids. We are effectively conning ourselves by knowingly walking into the traps marketers have set for us.
How to crush generational debt habits
Our kids watch everything we do, they mimic us. If you are struggling with debt in your life why do you think your kids will avoid it? They won’t, in fact they will most likely end up in worse shape than you. Do you want that for them? By keeping your kids (or your future offspring) top-of-mind and purposefully being an example to them will, in-turn, change the way you engage debt. Practicing the following steps will not only help you overcome debt, but it will most definitely set the right example to your kids for their future financial benefit.
Use the right words
Rather than always telling your kids, “We can’t afford that,” a better response is, “We don’t choose to spend our money in that way.” This sends the message that even though you may be able to afford to buy what your kids want, too much consumption is not good. Telling your kids you cannot afford this or that or to go here or there tells them only one thing: We are poor. If we weren’t so poor, we could have this or that and go here or there. That sends the message that money is the key to happiness—if we just had enough money, we could be perfectly happy. Kids worry about being poor, and if you just leave it at “We can’t afford it,” you run the risk of sending them the wrong message or causing them to worry about things children ought not to worry about.
By telling your children, “We don’t choose to spend our money on that,” you send a positive message that you have money but make intelligent choices about how to spend it. Don’t aspire to look like the most affluent family in the street by living as if you have a big bank balance. If yours is a one-income family, don’t live the lifestyle of your two-income friends. Rather than constantly striving to keep up, look for ways to downshift. Don’t live to consume and don’t base your self-worth on your net worth.
Discover the real need
Attitudes of entitlement are often a symptom. There are times parents get so caught up in the frantic pace of the daily grind that they don’t realise that most of what children need cannot be bought. Children need time and attention, conversation with their parents, and guidance. They need to know they are significant and valuable and that someone is interested in their moral development. Maybe it’s not the new outfit or the electronic device that’s the real issue after all.
Become a giving family
The best antidote for attitudes of entitlement is to give away the very thing you crave. Giving takes our eyes off ourselves and our insatiable desires. It works in children as well. Get your kids involved in supporting your church’s outreach ministries and community food pantries. Give to a missionary family that has children of similar ages to yours. “Adopt” an orphan in a third-world country. There are so many ways your family can become intentional givers. Giving takes effort and requires commitment, but the benefits both in personal and spiritual growth and in tearing down attitudes of entitlement will be invaluable.
Stay away from shopping centres and throw junk mail and mail-order catalogues in the recycle bin the minute they show up. As much as possible, do your necessary shopping solo—without kids. Overexposing children to the grocery store, the shopping centre, or the $2 shop inevitably creates desire.
Let the shopping trips that include the children be for a specific purpose, not simply to wander around to see what kind of desire you can create. When the kids are with you in a store, make sure you follow the debt-proof rules:
• Shop with a list.
• Shop with cash.
• Find what you’ve come to buy.
The TV game
Monitor children’s television and internet surfing time, remember these mediums are not baby-sitters. Find a way for the kids help limit their own media time.
Here’s an idea. Let the kids decorate ice-cream sticks. Use them to keep track of earned media viewing time. One stick equals thirty minutes of media time. Devise a plan for the kids to earn sticks by reading books, picking up toys, etc. Make a rule: no sticks, no media. Talk with your kids about commercial advertisements and the real message. Teach them to see through messages that suggest if you drink a certain soft drink or buy a certain brand of makeup you’ll be like the celebrity in the ad.
Teach your kids to play the game “What’s the Value?” (could also be called “What’s the Lie?”). After each commercial, ask them what value the ad was trying to sell. Was it pleasure, possessions, or prestige (prestige could also be power or popularity)? The first person to answer correctly wins. They get bonus points if they can explain the reasoning behind the response.
Commercial advertisements create false needs in all of us, but particularly in children. Children are literal in their thinking. Begin looking at this commercialised world through your children’s very literal eyes and ways of thinking. You’ll find yourself “believing” all kinds of lies.
Consider media-free periods. Start with a day; go to a full week. It’s an enlightening experience.
Your goal in tearing down attitudes of entitlement is to direct your children’s attention and desires away from the commercialisation of their lives. Spending less time at the shopping centre and more time in wholesome venues will support that goal.
Create a desire in your children to go to the library. Capitalise on the fact that most libraries allow us to borrow books, videos, games, etc., rather than having to buy them. Push the community aspect of sharing and supporting literature.
Trade shopping centre time for park time. Make it a point to visit all the parks in your city. Find the hiking trails and bike paths.
Call the local Chamber of Commerce to find the factories or manufacturing plants in your area that conduct tours. Make a list of all the places you can be tourists in your own town, many are free!
Maintain financial privacy
Parents should never tell their children how much money they earn. Whether you are at the poverty level or well-heeled, your children should not be privy to your annual income. Kids don’t need that information. When they have it, they don’t know how to interpret it. One woman shared with me how as a child her entire attitude about life and material things changed the day she learned her father made a six-figure income. Everything shifted when she decided they were the richest people in the world and she deserved whatever she wanted.
If your child asks how much you earn, answer back with the question “Why do you want to know?” If the child worries you’ll be homeless tomorrow, assure them that is not the case. If your child asks so they can brag to their friends about how rich they are, the answer should be something like, “That is Mummy and Daddy’s private information.” It is okay for parents to have financial privacy.
A child’s birthday should be the best day of the whole year. Set a spending limit ahead of time and keep to the cash-only rule. Think of ways to make the child feel special that don’t involve gifts and lots of money. Decorate their room with balloons. Make it a no-jobs day. Treat the girls like a princess for a full 24 hours… its doesn’t have to break the bank!
If you have a traditional party, keep a lid on the quantity of gifts as much as possible. I know of families who designate certain birthdays the big milestones (five, ten, sixteen, eighteen), having parties those years and opting for family celebrations in the years in between. But of all the times that you want to convey to your children how wonderful they are and how thankful you are for them, it’s on their birthdays. You can do that without spending a great deal of money.
Use the debt-proof plan
By far the best antidote for attitudes of entitlement is to put your children on a debt-proof plan. Going “on salary” at about age ten will put the brakes on attitudes of entitlement as your child begins to control his or her own desires and perspectives, from the inside out. It’s their money and it’s all they have to spend.
Clearly, attitudes of entitlement are a serious problem. But they are not terminal. Diligent parents who are willing to be consistent examples and limit setters will find success in tearing down attitudes that have the potential to do great harm. They will set the right boundaries, the right attitude to consumerism and debt as well as freeing themselves from a life of financial captivity.
This is a lesson for everyone, who would you like to share this article with? Click the share link on the right-hand-side of the screen.
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We hope you enjoyed this article
This article was authored by Mary Hunt.
The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.
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