The Difficulties of Money Parenting for the Obamas

She’ll be our nation’s First Lady in just a few weeks. But she’s also a mom raising two young daughters. Does that mean that Michelle Obama -- the parent -- has a more difficult task than most of us? What will she need to teach her kids about money, and the realities of money management?

Beyond the “fish bowl” effect of the presidential mansion and lifestyle, Mrs. Obama must shelter her young children from the media and from an eager public clamoring to know every move the First Family makes. Yes, the Obamas are in a position to give their daughters everything. But is that wise? Good parents want to provide the best to their kids -- but we realize that by providing everything to our kids (without them worrying about anything or learning to economize) they may grow up without appreciating what they have. They may never understand the value of a dollar or how to navigate difficult financial times like we’re facing now.

We all know of spoiled celebrity kids that make millions. However, without knowing about the realities of money, these privileged youth can end up in clinics for depression or substance abuse. Clearly having an abundance of money and possessions does not bring these kids happiness.

It will be a huge task for Mrs. Obama to come up with ways to teach Malia, age 10, and Sasha, age 7, about the value of the dollar in such a plush environment. I am a Certified Credit Analyst with children the same ages as Michelle Obama’s. As do millions of families in America, however, we live in a normal but comfortable environment. Teaching kids about money management has been a big task for me -- so I take my hat off to Mrs. O. As I said in my book “GIVE YOURSELF THE CREDIT YOU DESERVE,” delayed gratification and money management are two of the most important pillars to raising children to happy adulthood.

Let’s look at these tips and truths related to raising financially-responsible kids:

1. Mommy’s (or Daddy’s) money is not your money!

No matter where our kids grow up, they need to understand that Mommy’s money is not their money. This must be taught early, so children will know how to live within a budget. Moms can, and should, establish an allowance. I believe that by age 10 a child should receive between $20-$50 on a regular basis, unless you are one of the super-wealthy going to expensive places where they will need more. Using this method, moms can create a whine-free private life! I do not buy ANYTHING for my children outside of the basic necessities of life (food, needed clothing, and school items). My kids have their own allowance and they have to buy toys, treats, or non-essential school or clothing items from their allowance. The future first lady can establish an appropriate allowance for her two girls to teach them about the value of a dollar. Even affluent parents are dealing with today’ s financial challenges.

2. Give kids the freedom to choose… and to fail.

I give my children the freedom to choose to get what th ey want. This might lead to them not having enough, or any, money by the end of the month. Some people think that this system is harsh -- but my kids love it. Chris became the best shopper, because he found stores for used games and electronics. He even ch ecks out which flour has more fiber and costs fewer dollars per pound. I believe this technique would work not only for kids living in an average household, but for the presidential offspring, too. Even in that fish bowl White House lifestyle, the Obama kids can shop online. Parents may contribute to the shipping charges from the family budget, so the children don’t feel they are disadvantaged.

3. Stick to your principals no matter what.

Many parents get “soft” and let kids manipulate them by tears. No toy or game is so important! My advice to parents: Do not give in! Instead, teach youngsters how to save for what they want, making a calendar that indicates how many days they have to save to buy the items desired -- whether it’s an I-Pod or a designer outfit. This delayed gratification will serve the kids well when they grow up and need to provide their own living. And they all will grow up soon enough! We need to prepare our younger generation to survive outside of our protective bubble. The Obama daughters will also have to face the same challenges as they grow up, in the public eye. So the incoming first lady has a more challenging task than many of us.

4. Needs vs. wants…

One of the most important principals in life is to understand the difference between “I want that fantastic BMW to impress people as I zip around town” vs. “ I need that used Honda to get to work.” This is one of the most important lessons in life. You can be a happy or unhappy person whether you have the beat-up Honda or the flashy BMW. When your children tell you what it is they want (cell phones, MP3 players, fancy clothes, etc.) you need to help them distinguish between their definite needs and their fleeting wants. In my family, Jackie likes gorgeous clothes as any girl does. She needs jeans so I provide that for the Wal-Mart or Target price. If she wants to have designer jeans or one of the celebrity brands, I give her the Wal-Mart price funds and she can add to that, from her own allowance, to pay for the “want factor.” She can shop for the best price and compare the celebrity brands in Wal-Mart to the designer mall prices. It is her choice where she wants to shop and what she wants to buy. No matter where you live you can use these principals with your own children for good “money parenting.”(That would help even you, Mrs. Obama!)

5. Teach them to s-a-v-e.

If you provide your kids with an extra budget for school, including lunch money, it’s a good idea to reward them if they are spending their money wisely. Give them money for a week or for a month yet still take 10 minutes each week to reward them for saving money successfully. Establish a mommy/daddy 401K for them. If they save a dollar (by not purchasing pricey soft drinks from the machine or by packing cheaper lunch from home), match their savings with your mommy 401K. Teaching your children to save money, while rewarding them for their behavior, will help them tremendously in life and enhance their feelings of accomplishment and self esteem. They will learn valuable financial lessons and be much happier by following these principals.

Wherever you live, whether that’s in a small town in Pennsylvania or in the White House on D.C.’s Pennsylvania Avenue, you need to teach your kids about money management and the truth is, life in suburban America offers more realistic circumstances than the future first lady in the White House will be facing. Good luck Mrs. Obama! We know you can do it! And Malia and Sasha will thank you.