5 easy strategies to raise kids who aren't spoiled

Getty/Michael Dodge

As my husband and I prepare for our first child's arrival in August, one question consistently repeats itself in my mind (okay I have a lot of questions, but this is definitely a big one!): How can we raise a child who isn't spoiled.

There's a fine balance between loving and providing for your child and making sure that your child understands the value of hard work and what it means to earn money and not be handed things.

When it comes to spoiled kids, Neale Godfrey, CEO and President of Green$treet Commons, Inc. and creator of children's financial apps GreenStreets: Shmootz Happens! says it all boils down to the 'I want syndrome.' "It's where kids ask for something, and parents think 'What's the big deal?' and just give it to them," she explained. "It might not be a big deal when they're little, but as your kid grows older and they don't understand how money works, that's a big deal."

So, what's a well-meaning parent to do? Godfrey suggests taking the following steps to avoid raising a spoiled child.

Step 1: Don't make money a secret in the house

Often parents try to shield their kids from the financial goings-on of the household because they don't want to scare their kids or, even worse, they just don't think their kids need to know. "Money becomes the biggest secret," says Godfrey. "Kids don't see us earning it, so what you want to do is make it visible."

How to do it: You can do that by having an open dialogue about money and explaining that the only way people get money in the real world is to earn it — there is no entitlement program. Step one should be coupled with the following to make the biggest impact …

Step 2: Put your kids on an allowance

Instead of dishing out every time your kid wants something, help her learn the value of budgeting and saving for what she really wants by providing an allowance.

How to do it: When it comes to chores, Godfrey suggests breaking them up into two separate categories: the citizen of the house chores (or those that they do simply because they're members of a house) that they will not get paid for, like cleaning their room, and then the larger project chores (like cleaning out the garage or attic) that they can perform to earn a little extra cash when they need it.

Keep chores age appropriate (three-year-olds can put napkins on the table for dinner and help you with safe tasks in the kitchen, for example), and Godfrey suggest paying kids the equivalent of their age each week. "You don't want them to have too much or too little money," she said.

Step 3: Budget their allowance with them

Now that your kid has money, he shouldn't be allowed to blow it all in one place. "Teach your kid that budgeting is the habit of what we do with our money," said Godfrey.

How to do it: For little kids, Godfrey suggests using four clear plastic jars labeled with what the money will be going towards in each. The first can be for charity, and 10% of their allowance can go in there.

After that's done, divide the remaining money into thirds, with 1/3 going each into a jar for quick cash (for things they want right now!), medium-term savings (things they'll need to save a little bit of money for) and long-term savings (like colleges or for their future). "Your kid will not understand the concept of long-term savings when he's young," said Godfrey. "But at around 10 you can go with your child and open an investment account with them so they can start learning what it's about and how to use it."