There’s a good possibility our children will be poorer than we are, according to Kevin Press in a recent “Today’s Economy” blog .  If productivity of the Canadian economy doesn’t improve, he says, our children will not experience the standard of living we enjoy.

It strikes me that kids raised in a consumer culture have been put in a very difficult position. The conditions of their upbringing have set them up for a fall if his prediction comes true.

• Kids have been raised to expect that everything they want will be forthcoming.
• Kids have been protected from the realities of debt by parents who just bite the bullet and work harder to pay for the things and experiences their children want.
• Kids have easy access to credit, especially once they enter post-secondary education where they can readily qualify for student loans and credit cards.

We have raised our children with the expectation of the “good life,” an unrealistic view of how it can be obtained, and the means to get things when they don’t have the money to pay for them. Yet few of us have taught our kids about financial sustainability. Sounds like a recipe for trouble.

I recall a television interview of a 27-year-old who routinely spent his earnings on clothes, entertainment, and eating out. Predictably, he came up short every month when his rent was due, and appealed to his parents to bail him out. It was clear he had no concept of living within his means— no inclination toward ensuring that money was set aside for housing, food, and transportation before spending on the fun stuff.

This unconscious consumer behaviour is a major shortcoming of our society, and it will come back to haunt all of us if we don’t do something about it. The parents of this young man realized they were in a predicament of their own making, and were participating in the interview in a desperate search for solutions.

The solution is to teach young people about conscious spending from an early age—both by conversation and example. When kids ask for something, there is nothing wrong with saying you can’t afford it, or that it doesn’t fit into the family budget. You can help them come up with alternatives for getting the item. Saving money from allowance is a good place to start. (If it’s a substantial purchase, you might offer to match funds when savings reach half the cost.) Earning money by doing odd jobs, at home or for neighbours and family is another good option. These approaches go beyond money—they teach self-responsibility rather than dependency.

When young adults prepare to move from home, they are at a particularly teachable moment. Have conversations about spending less than they earn, the importance of planning so the basics are covered first, and the costs and consequences of buying on credit.

Send them off with a good guidebook. Of course, I’m partial to mine—Conscious Spending. Conscious Life: An Uncommon Guide to Navigating the Consumer Culture (available early in 2013). Other good resources are David Chilton’s classic, The Wealthy Barber, and Gail Vaz-Oxlade’s Debt-Free Forever.

Preparing our children is important. If they become wealthier than their parents, good for them. However, if they do end up with modest incomes, they will be able to cope without falling into the debt trap.