How Families Can Put 'We' Into the 'Wii' Generation

SAN FRANCISCO – To believe the sober polls and somber press, today's young Americans are self-centered and coddled, tuned in to iTunes and tuned out to "I Give." If this wireless but disconnected group had a collective one-liner, it would be, "But enough about me. What do you think of me?"

What, indeed. This is a "See Me" generation; 81% of 18 to 25 year olds say getting rich is their most important goal, while more than half of them covet fame, according to a poll by the Pew Research Center For The People & The Press. And yes, the hottest video game system on the market spells "we" with not one, but two "i's."

Not surprisingly, teens and twentysomethings admire highly paid entertainers and professional athletes more than political leaders and historical figures. They watch television shows that "Pimp My Ride" or vamp "Cribs" and tell people they deserve to live life in first class.

"A lot of things that are fiscally responsible are not considered cool," says Jean Twenge, a psychology professor at San Diego State University and the author of "Generation Me," which takes aim at a narcissistic "entitlement epidemic" that she sees widespread among young people.

It doesn't have to be this way, particularly when it comes to money.

1. Change money views

Why are young people materialistic? Psychologists cite advertising — we're bombarded with hundreds of messages every day — but say that conspicuous consumption most often begins at home.

"It's about beliefs, values and goals," says Timothy Kasser, a professor at Knox College in Galesburg, Ill., who studies the psychological underpinnings of desire.

Materialistic parents tend to raise kids who follow a fashion-conscious line. "They view materialism as a pathway to satisfy their needs, and advertising supports that," Kasser notes. "Ultimately, it's unsatisfying. They're pursuing a style of life that might give them temporary uplifts, but it's not going to solve problems in the long term."

Twenge adds that difficulties "Generation Me" has with money and materialism come in part from being told they're special and unique.

"Permisssive parenting is one of the things that leads to narcissism," Twenge says. "A lot of young people have not been given practical advice. They think their life is going to be a cakewalk because they're smart and everything will fall into place."

2. Get real about plastic

"It's amazing how few young people understand where money comes from," says Nathan Dungan, a financial adviser in Minneapolis and the creator of "Share Save Spend," an educational program designed to encourage healthy financial habits.

Many young people go to college or enter the work force not knowing how to use credit responsibly. But credit is readily available, and a stack of shopping bags can't hide a mountain of debt. "Hyperconsumption does not discriminate," Dungan adds. "They don't care if you have the money or not. It's about creating the want."

Spendthrift kids typically rely on their parents to bail them out of money jams — to no one's benefit. It's easier to instill responsible financial attitudes than to undo ingrained habits, of course, but it's never too late to learn, Dungan says.

Tell children that your financial support has done them no favors, he advises. Speak frankly and firmly, confessing that there should have been consequences for irresponsible spending, and now there will be. Put your kids on a "spend-down" plan over a six-to-12 month period.

"The notion of entitlement, especially for high-net-worth families, can set in really quickly," Dungan says. "With the blessing of the money comes the curse of the money, and a lack of planning can have some really harmful effects."

3. Know when to say no

David Walsh, a Minnesota psychologist, also counts advertising and easy-going parents as the chief culprits behind young people's poor social and financial habits. To blunt their impact, he's written a book: "No: Why Kids of All Ages Need to Hear It and Ways Parents Can Say It."

"Everywhere we turn we are told that things should be more, fast, easy and fun," Walsh says. "There's nothing wrong with having a good time. The key is keeping it within reasonable bounds."

Start by having family discussions about what you can afford, what you need to save for and what you can do without, Walsh says. This teaches financial responsibility and the admittedly tough lesson that we can't always get what we want, when we want it.

"If we don't have a budget, there's temptation to overspend and give into those marketing messages," he says. "Most of us are spending more than we make. Somehow we've got to rein that in, a little bit at a time."

Moreover, people who treat money seriously and focus on long-term financial goals are better off both financially and emotionally throughout their lives, Walsh adds.

"The goal is to be able to help kids say 'no' for themselves," he explains. "Self-discipline is the key to success, and ironically the key to happiness."