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Even during tough economic times, plenty of parents have trouble saying no to their kids’ requests for higher allowances, the coolest new sneakers or front-row seats to hear the hottest new pop star. And that’s a recipe for anxiety, says social psychologist Susan Newman, PhD, author of The Book of No: 250 Ways to Say It — and Mean It — and Stop People-Pleasing Forever. But grappling with money issues can be an opportunity to break what Newman calls “the giving-in habit” and teach your kids about the value of money — by setting good financial boundaries yourself, explaining how money works and talking frankly about family fiscal issues.

Stress Source: Saying No to Your Child

Discomfort setting money limits with your kids — either because you don’t know how or because you fear that saying no may disrupt your relationship with them and make you feel like a bad parent.


  • Being a “yes” parent. “A good portion of American parents have been giving their children most of what they want, without drawing any lines,” says Newman. “They feel guilty when they say no.”
  • Compensation compulsion. When a parent experiences a financial setback, he or she may overcompensate for (unjustified) feelings of failure by giving in to kids’ money demands.
  • Peer pressure. It can be very strong — and we’re talking about parents, not kids. “Keeping up with the Joneses” by always letting children have what their peers have is a hard habit to break, says Newman.
  • Disappointment dread. “Parents don’t want to let their children down,” says Newman. “They fear that the kids won’t love them anymore — at least for a while.”
  • Don’t-tell policies. Many parents hesitate to reveal their financial state to their kids, especially when they are struggling to make ends meet.

How to Cope

  1. Turn “no” into a teaching moment. Kids can learn responsibility and how to prioritize, budget and deal with disappointment, says Newman. Moreover, she says, “They’ll be prouder of something they’ve bought with money they’ve saved or earned.”
  2. Realize you’re not a bad parent if you don’t buy your children everything they want. You’re a good parent who is breaking a potentially harmful “giving-in” habit.
  3. Talk to your kids about what they really want when they request new stuff. You might be surprised to hear that they’re more interested in having quality time with you.
  4. Reveal finances judiciously. “Younger kids only need to know that you will take care of them no matter what,” says Newman. “Older children don’t need to know what’s in your 401(k) or your bank account, but you can talk frankly about, say, a job loss and the need to cut back.”
  5. Inoculate your kids against manipulative marketing. Help them perceive how ads manufacture desire. Talk about toys or games they own that didn’t live up to their hype.
  6. Include their ideas. Kids will be more willing to limit their money demands, says Newman, if they’re an active partner in the family’s financial problem-solving plan. “And,” she adds, “they often have amazingly good ideas for cutting back.”
  7. Get some perspective. “When your children get older,” says Newman, they are not going to base their assessment of your parenting on “whether or not you bought them the latest iPhone.”

Stress Solver

Gifting Together: Giving to the needy in partnership with your kids is a great way to bond with them and teach them about money — and life.

Call it co-charity: Teaming up with your children when you plan and carry out charitable giving teaches them that not everybody is financially fortunate, and it gets them into the habit of helping — all the while cementing family ties. According to Alfie Kohn, author of Unconditional Parenting: Moving from Rewards and Punishments to Love and Reason, research shows that certain ways of encouraging generosity in children can make it more likely that they will turn into caring adults — especially when “help is accompanied by a chance to reflect on the nature and purpose of the helping.”

Charitable giving is probably as old as humankind, but its roots in the West go back to the Old Testament injunction (in Deuteronomy 14) to care for widows, orphans and the needy. Charity plays a central role in the Jewish tradition, became a cornerstone of Christian piety and is one of the five basic Muslim obligations as well.

Gifting together benefits kids. “The goal is to help them think of themselves as the kind of people who care about others and really want to help, even when there’s no benefit to themselves,” says Kohn. When parents and children give together, this also provides a good opportunity for them to connect. And giving kids appropriate responsibility in the process builds their self-confidence. “With helping, as with most things,” says Kohn, “children learn to make good decisions by making decisions — not by doing what they’re told.”

Simple Steps
Kohn recommends that children be included in as many of the decisions about giving as possible: deciding on the charity, determining the amount and setting the frequency.

In these discussions, parents should provide concrete details about how the recipients will benefit. “This allows kids to see the impact that helping makes on real people, rather than seeing helping as an abstraction, something you’re just ‘supposed’ to do,” he says.

“The point isn’t just that a child is doing something nice, but why he or she is doing it.” Reflecting on the why will help establish giving as a habit, and discussing which gifts brought the most satisfaction will help build kids’ confidence and commitment.

A sense of choice and real participation is key, says Kohn: “Forcing kids to donate, or using rewards (including praise) or punishment (including guilt) is unlikely to make a positive difference.”

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