Why it's good to say no

As many people get richer, parents worry increasingly about how to raise their children without spoiling them, writes Carl O'Brien.

Affluenza. It's one of the latest sociological buzzwords in the US used to describe a state of slothfulness and disconnection among young people who live off their parents' wealth. And it could be lurking in a home near you.

Dr Mark Harrold, a clinical psychologist who has just written a book on raising children in an affluent environment, says parents in Ireland are becoming increasingly concerned about the effects of wealth on children.

While debate rumbles over whether our newfound prosperity has had a positive impact on family life, parents who never knew such material wealth are finding themselves thrust into unknown parenting territory.

"For many parents, it's their first experience of wealth. And there are lots of preoccupations, such as: Will our children grow up 'normal'? Am I spoiling my child? How will our wealth affect our child's self-esteem and sense of self-worth? Will our child be exploited because of our wealth? Can I prevent our child becoming a 'trust-slug'?

"With 'affluenza', the lack of purpose that can result is one of the most devastating realities for a young person. Many parents are the first generation to enjoy considerable affluence and have no blueprint for how best to manage their wealth for the benefit of the family."

Given the speed at which society is changing, combined with the baffling array of choices wealth can bring, many parents are left wondering whether the values of their parents' generation remain relevant, says Harrold. They are increasingly anxious to get the balance right between wanting the best for their children and overindulging them.

So how does a parent get it right in such a changed world? Despite preoccupations accompanying wealth, Dr Harrold's advice is generally simple and straightforward; a combination of clear-thinking, common sense and effective communication.

"If you are running a business, you must give time to it. It's no different for your children. We need to be talking and spending time with them. If parents want to form values in their children, they have to be there to form them. Otherwise they get them from the television or the schoolyard. And that goes too for attitudes towards wealth."

Parents, especially in affluent environments, are haunted by the question of whether they are spoiling their child. Dr Harrold says the key is setting values and standards at home.

"You must go back to the core principle that rewards need to be earned, that rules need to be obeyed and that it's OK to say 'no' sometimes. It's important for parents to realise that ultimately they must set the standard within their household. They know what is best for their children. They must make the determination about how much to give and how much to withhold," he says.

As well as parenting techniques for raising children, there is also the practical issue of how parents should pass on their wealth. Dr Harrold, drawing on the advice of financial planning experts, says planning is vital in order to avoid acrimonious arrangements and unnecessary taxation.

"People will be aware of high-profile court cases where families have been devastated over the passing on of wealth. Much of that comes about because people are uncomfortable talking about their wealth and where it comes from." The methods of passing on wealth, whether through family partnerships or trust funds, are examined in detail in the book. But whatever about the technical details, Dr Harrold insists money shouldn't become a dirty word in an affluent household.

"Children need to learn to become comfortable with this reality and develop a healthy attitude to money. So parents should be sure to talk about money to their children rather than viewing this as vulgar or unnecessary," he says. "Parents need to assess how they want their children to relate to money. It is impossible to guarantee a secure future, but by taking steps to create a healthy relationship with family wealth, it is eminently possible to get the balance right."

One of the thorniest questions in transferring wealth is who should take over the family business. Dr Harrold draws a parallel with the parable of the prodigal son which, he says half-jokingly, told only half of the story.

"The son blew it all on frivolous activities and eventually came back to his father with nothing. The father killed the fatted calf in celebration, leaving the sensible brother scratching his head about where he got it all wrong. Most interpretations of the story centre around the father's unconditional love of his children. But the big question that remained then, and I'm sure is asked by many parents today, is who should take over the family business. That was never answered in the parable."

Passing on a business, he says, depends on whether the child, or other family members, are interested in running it. There are also other options such as legal and financial "control structures" to ensure parents' wishes are acted upon long after their passing.

"Parents should try to step back from the domestic aspect of passing on wealth and develop an objective, pragmatic stance. It is a matter of recognising the personalities involved, projecting realistically about the future, taking professional advice, communicating effectively and ensuring settlements are made to everyone's satisfaction before parents are in a situation over which they have no influence."

Dr Harrold's book is sponsored by Bank of Ireland Private Banking, which decided to get involved when it saw these concerns arising among its affluent clients.

"It's a major phenomenon," says Kevin Quinn, associate director of Bank of Ireland Private Banking. "It's not just the super-rich who are facing these questions. A lot of people have a lot more income and a lot less time. While we have expertise in financial issues, we'd find in conversation afterwards that parents were concerned about the impact of wealth on family life. These things are all complementary at the end of the day."

Dr Harrold says that, despite the challenges posed by wealth, the barriers are by no means insurmountable.

"Concerns parents express about the next generation are legitimate, but not insurmountable. It is eminently possible to plan for a future that is fulfilling and prosperous, and to live with a real sense of responsibility, when you are the beneficiary of inherited wealth."

Parenting And Privilege: Raising Children In A Wealthy Environment by Dr Mark Harrold is published today by Blackhall Publishing. Price €12.99. www.blackhallpublishing.com. Proceeds from sales of the book go the Arrupe Society, founded by Father Peter McVerry, which provides care and accommodation for homeless boys in the Dublin area

Pester power Anti-spoiling strategies:

Learn to say 'no'

Even if children's time with their parents is limited, it is essential they learn that parents are not simply suppliers of goodies, but that they give and receive love without condition. Refusals should not be viewed as withdrawal of love.

Spending time with children

A distinction should be drawn between providing wealth for your children and providing security. For children, the greatest security of all is to know their parents love them and want to spend time with them. Weekends should become sacrosanct, for example. Parents are role models for their children and much character moulding occurs in the most ordinary moments.

Too many advantages can be a disadvantage

Unrealistic expectations can develop with material wealth. When the child steps out of the family environment, a very different world may be encountered. Children must learn that it is necessary to earn privileges that come their way and that they are not automatically entitled to them.

It's OK for children to become frustrated

This is part of growing up. We must all learn to overcome failures and how to cope when things do not go our own way. This lesson must be learned early, as it will be more difficult to acquire as children get older.

Delayed gratification

Save surprises and special treats for birthdays. If a child really wants an item such as a new scooter or computer game, and there is no special event coming up, a better idea is to help them plan how to earn enough to purchase it themselves.

Develop children's awareness of those less fortunate than themselves

By helping those who are less fortunate - whether it's giving toys to charity or pocket money to the Third World - children get a more balanced perspective of the world. Parents can provide no greater experience to their children than an awareness of social needs.

Get children involved in sport and other activities

The playing field can be a great leveller. Any exaggerated notions of grandeur can be trimmed very quickly in the field of competition.