Categorized | Economics, Personal Finance

Children Must Learn Resource Constraints

Do children today seem a bit out of control? A bit spoiled? From my experience the absolute best thing you can teach your young ones is that we live in a world of finite resources. Once they learn that basic premise they will be forced to learn how to value things in their lives, rank order them, and apply resources accordingly.

One of the supreme disservices parents commit is failing to imbue this premise of reality in their children. Without constraining resources, kids have a tough time understanding value. This becomes a serious problem later in life and decreases their ability to make it in this world on their own.

When it comes down to it the ONLY natural function of a parent is to prepare their offspring to face the world independently. Just look to the animal kingdom to see confirmation of this axiom of nature. Everything else…the love, affection, support, comfort…that’s all nice, but tertiary.

The secret to teaching kids the wisdom that comes from simulating reality is to actually limit your child’s resources. Put him/her/them on a fixed budget, or allowance. You can tie the allowance to work performed or give it for the sole purpose of teaching resource allocation. I am a fan of the former approach – teaching kids that you must earn the means to obtain your values.

Then…just sit back and wait. Your kids will go about their lives constantly ordering their world in their own way. They will learn that if they blow their allowance on something they don’t truly value they have no option but to wait until their next paycheck to get want they want. They’ll also learn the big concept of deferring present consumption to obtain future value. I still remember the euphoric feeling of learning about interest and making money on money!

The biggest challenge for some parents is to forego the cheap, fleeting comfort of seeing an instant-gratification smile on their child’s face. Be tough and do what is right for them in the long run! Don’t give in to your own weakness for the need to satisfy and feel loved…you’re only cheating your kids out of the tremendous development possibilities that reality affords!