CNN Money's Tips to Unspoil Your Kids

 It’s not uncommon for preteens and teenagers these days to have their own cell phones, iPods, laptops, TV’s in their bedrooms, and more luxuries that most adults weren’t able to afford until recently. Though these devices have become more affordable over the years, they are still an indicator that kids these days are more spoiled than ever. With the looming recession and failing markets at hand, if your kids are still living the life of luxury, it might be time to tune down their lifestyle.

Donna Kornegay, 41, a director of wellness at a law school in Durham, N.C. and mother to 14-year-old Dalyn Fountain, says, “We’d regularly give her money to go to the mall and keep up with the latest trends at Abercrombie and Aeropostle.” Recently, however, Dalyn’s shopping habits and spending routine have been cut. Donna and her husband Dexter (Dalyn’s stepfather) confess they have limited their daughter’s spending in addition to their own. “We’ve been extravagant with our kids and with ourselves, now we’re readjusting,” says Donna.

The Kornegay’s have stopped making frequently shopping trips and have started giving Dalyn a $20 weekly allowance and a $3 weekly allowance for her 6-year-old younger sister. The Kornegay’s confess that Dalyn has had trouble adjusting to her now-limited funding, but she understands that it is necessary.

In a recent survey, CNN Money reports 54% of parents admit their kids have too much stuff. Also, over 50% of participants in the survey say that, because of the economic crisis, they plan to spend less on their kids for years in the future. Turns out the stock market correction might lead to an additional correction in the financial values parents instill in their kids.

Nathan Dungan, financial coach and author of “Prodigal Sons and Material Girls,” says, “Parents are seeing the shortcomings of giving children everything they want.” He believes parents are now realizing how expensive it is to cater to their kids’ every desire, especially in today’s economy. By overindulging, you run the risk of raising children who don’t understand the value of a dollar or have necessary skills to handle themselves after they’re off your payroll. A bad habit this can lead to is credit card reliance.

According to CNN Money, here’s an age-specific way to help your kids’ financial futures:

Ages 5-9:

Make sure you give your kids simple chores that are their explicit responsibilities. Give them a weekly allowance and stick to it. Also, talk about money decisions and values with your children and introduce the idea of charity.

Ages 10-13:

Get each of your kids a saving account and offer extra chores and tasks around the house as a way to increase their weekly spending money. Consider raising their weekly allowance if you deem it necessary, and explain to them why or why not you think they deserve this increase.

Ages 14-18:

Open a checking account for each of your children and have them deposit their allowance into it. Introduce debit or prepaid credit cards but be sure to monitor the use. Encourage your kids, if they are over age 16, to get a part-time job and to deposit these funds into their checking or savings accounts too.

Ages 19-22:

Expand allowances to cover semester-long expenses if your kids are in college, and provide financial help only if it encourages your children to become more independent. Stress involvement in charity as an enriching opportunity for your children.