Growing up on the edge of a native reserve in British Columbia, Calvin Helin witnessed first-hand the effects of government handouts. “My father was a hereditary chief and his family opted out of the Indian Act. He rejected welfare.

But I had cousins who grew up on reserve and with a sense of entitlement. They felt they deserved the money because of all the bad things that happened to aboriginals.” To Calvin, that money came at a tremendous cost: the low self-esteem and sense of worth among many native Canadians, resulting in an increased incidence of depression, alcohol and drug abuse and suicide.

Calvin grew up to become a lawyer and in 2007 self-published Dances with Dependency, which eventually became a best-seller. The book cast the financial problems facing aboriginal populations in Canada and around the world in a different light, one that could be changed.

His widely anticipated second book, The Economic Dependency Trap, takes aim at the culture of entitlement, but this time among the middle class. “The damage caused by foreign aid and government-sponsored bailouts is no different from the sense of entitlement fostered by middle-class parents who lavish newfound wealth on their children, only to find themselves creating a spoiled, undisciplined younger generation lacking the skills and the desire to become responsible adults.” Psychologists call it affluenza. Symptoms include:

  • lack of motivation to work
  • extreme materialism
  • laziness
  • overindulgence
  • sense of entitlement
  • insularity and snobbery
  • low self-esteem
  • inability to live on their own (the “failure to launch” syndrome)

Young people with affluenza can develop the same mindset as some people on welfare. “It often leads to depression, which can lead to lateral violence.”

How did we get here?
Calvin connects the dots from the first days of social assistance programs after the Great Depression, to the North American manufacturing heyday of the ‘60s and ‘70s, to the exodus of manufacturing to China and other countries, to an economy today that is largely based on consumption of goods, rather than production of goods. Add in the easy access to credit introduced in the ‘90s and you have a recipe for financial disaster.
Calvin is quick to point out that parents who overspend on their children are doing it with the best intentions. “Nobody’s willingly trying to harm their own children. Everyone wants to give their children the best experience.” But the reality is that children are exposed to so much more than we were: more retail stores, more forms of entertainment, more styles of sneaker.
“We live in a consumption-based society. There’s so much pressure on young kids. They are not being educated by their parents, but by their peers and advertising,” says Calvin.

Calvin’s suggestions for raising financially savvy young people:

Tie allowance, or even screen time, to expectations of behaviour or chores. “Children should earn those rights. We have to teach our children that there’s a relationship between the two. I often use the example at my speaking engagements that if I had a bunch of Olympic Gold medals and handed them out in an audience, no one would be rolling in the aisle or weeping because it would be psychologically meaningless to them.”

Exercise self-discipline with spending. “The ‘90s were the first time in the history of civilization that we had access to so much individual wealth or such easy credit. Parents lavish material things on our children because 1) we felt deprived as children, 2) we are living vicariously through them or 3) to compensate for not being able to spend time with them.” Calvin invokes the sage advice of billionaire investor Warren Buffett, when he notes the greater your wealth, the more discipline you have to have in spending it.

 Show your kids the family budget. This doesn’t have to be detailed, just how you work to earn the money that comes in, how much time that takes, and where that money is going. “Get them to understand where there’s wiggle room or no wiggle room.”

Remind your children that the greatest pleasures in life come not from material things but from time spent.

Published in May, 2011.