Share Save Spend

A reader sent me the link to this article, which has some great suggestions for how families can work together to control spending. Kids today may think they are entitled to have the latest and greatest toys, clothes, etc. and it's hard for parents to say no. Nathan Dungan, a financial advisor from Minneapolis, is promoting a program called "Share Save Spend," which recommends ways that parents can share their financial goals and decision-making with children in a way that keeps everyone on track with a sense of shared values. He offers these 3 tips:

1. Be smart shoppers

Stores are great classrooms for teaching about money.

Before you fill the cart, talk about how you got here in the first place, Dungan says. Relate an early memory about earning money. If you patronize businesses that are charitable or support community activities, point that out to your kids. In the check-out line, check out your purchases and make sure they reflect your values.

What if the mall is a family battleground? Suppose you're facing full-court pestering to buy more stuff. Saying "yes" to kids -- provided they use their own money -- can be extremely effective.

Shift responsibility and accountability, Dungan says, and "the level of importance of that purchase drops exponentially."

2. Money doesn't make you

Society tells us how to dress, what to drive, where to go, who's important and who isn't. The password? Money.

Being a conscientious consumer is fine to a point. It's when money consumes you that petty behavior and anxiety surfaces. Dungan cites the research of Timothy Kasser, a psychology professor at Knox College in Galesburg, Ill., which shows that when people focus less on materialism and more on frugality and generosity, they're happier and healthier.

Tell kids that what they have doesn't define who they are, Dungan says. "It's beyond saying 'No,'" he adds. "It's really about boundaries."

Establish those boundaries by talking with your children, in as neutral a way as possible, about pressure to measure up to peers and feelings of inadequacy if they don't. Ask why they want something so badly. Does it fill a void elsewhere? Be honest about your own flashes of envy and wishes for more.

Promote delayed gratification; it might make your kids happier. In a famous Stanford University experiment, preschool children were told they could have one marshmallow immediately or two if they waited. Patient kids developed greater self-esteem as adults.

3. 'Share Save Spend'

Practically, Dungan's "Share Save Spend" program divides household income between charity, investing and buying. For instance, many families, Dungan says, earmark 25% to sharing, 25% to savings, and 50% to spending.

On another level, "Share Save Spend" deals with much more than money.

"Share" isn't just about charity and community service; it's sharing within your family and placing the highest value on communication and honesty. "Save" teaches long-range thinking and drawing a road map to reach your goals. With those two supports firmly in place, "Spend" becomes more about people, places and experiences, and less about trophies.

I think this kind of approach is a great idea, not just between parents and children, but in a slightly different way, between the parents themselves, or any couple in a relationship. I've spent way too much time in my own life worrying about money because my parents weren't open with me or with each other. If the decisions and goals had been shared, I think we all would have been a lot happier.

Thank you to Charles for sending me this link!