The holidays are upon us, and rumor has it we’re supposed to be joyful. But if you’re one of the millions of American families caught in the economic crunch, you’re anything but. Your kids expect the moon for Christmas, and like George Bailey in It’s a Wonderful Life, you’d love to lasso it for them. Unfortunately, the “moons” they’re asking for—trendy clothes, say, or high-tech devices—remain out of reach. It seems the Season of Giving only spotlights how little you can give—and how much your kids are focused on taking.

It’s true, says Gregory Downing. Kids are disconnected from the harsh economic realities that most adults struggle with. That’s partly because we shelter them from the truth, but also because we the parents aren’t in reality about it, either.

          “Many adults don’t want to acknowledge that the world has undergone a fundamental shift,” says Downing, author of Entrepreneur Unleashed: Wealth to Stand the Test of Time (Legacy Unleashed Press, 2012, ISBN: 978-1-938047-06-0, $29.95, as well as an upcoming book on providing a financial legacy for kids. “Everything about the way we build wealth and think about money has changed. Yet we’re still living—and yes, giving—like people who are able to work 40 years for the same company and retire comfortably with the gold watch.”

          In a way, he says, we’re just as spoiled as our kids. We all need to change our unsustainable ways, and that means breaking the paradigm of parents as beneficent providers and kids as passive recipients. It breeds not only an entitlement mentality, but also an employee mindset—which Downing says will not serve kids well in the future.

          Downing, who left a grueling 80-hour-a-week job to make his fortune as a real estate investment business owner and motivational speaker, says parents must teach kids the basics of entrepreneurship. Generating multiple streams of income (earned, passive, and portfolio) is the only logical path to financial freedom in a global economy where half of all college grads are moving back home jobless and saddled with debt.

          Of course, he is not suggesting we serve up a stern family lecture about the new fiscal reality along with the Christmas cookies and hot cocoa. (That would be a Grinch-y thing to do!) What wecan do is minimize spending on gifts, concentrate on the togetherness aspect of the holidays—andafter the tree comes down, call a family forum.

          What will you say in that post-holiday forum? Downing offers up the following suggestions:

Be honest about your financial situation. Most families hide financial struggles from children to keep them from worrying. This is a mistake, says Downing. While reassuring your kids that you will take care of them and you’ll all be okay no matter what, be straight with your kids. They can handle it.

Downing explains: “It’s okay to say something like, ‘After Dad lost his job and took this new one, he makes half of what he used to. Also, we have to buy our own health insurance, and it’s very expensive. We have a lot of bills to pay and we need to fund our retirement account. That means we’re all going to have to cut way back on unnecessary spending.’”

Lay out the family finances in business terms. Your kids probably have no idea how much you make. Nor do they realize the cost of running a household. Between the mortgage, car payments, insurance, utility bills, food bills, gas bills, and so forth, you’re spending thousands of dollars a month. Add other “occasional” expenses like clothing, car repairs, a new computer when yours dies, and (if you’re lucky) vacations, and kids may be stunned by how much it costs just to live their normal lives, says Downing.

“Lay all your cards on the table,” he suggests. “Get out your pay stubs or tax returns and a month’s worth of bill statements and walk through them all. Say, ‘Here are our revenues for the upcoming year. Here are our operating expenses. Here are our profits.’ Not only will this be an educational experience for the kids, it may be one for you as well. Most people are not accustomed to thinking of their family as a business, so this can be very enlightening and may be just the push you need to make a change.

“You may want to emphasize the financial impact of kids,” he adds. “Even if they go to a public school, there are plenty of costs—supplies, lunches, field trips, school pictures, band instruments, sports uniforms, etcetera. And of course, extracurricular activities like dance or martial arts can be really pricey. The point isn’t to make them feel guilty but to give them all the information they need to engage in the discussion.”

First, ask kids for cutback suggestions. Cutting expenses is always a valid business strategy. And for most families, it’s already the first line of defense when money starts getting uncomfortably tight. But rather than laying down the law to kids (“Sorry…no Disney trip this year”), involve them in the process. Ask: “Where might we as a family save money? How can you help?” In this way you’re demonstrating to them that you value their input and expect them to be part of the solution.

“When kids see that you’re spending $200 a month on cable, they might say, ‘We don’t really watch much TV anyway so let’s get rid of that bill and we can still go to Disney World if we pack lunches and stay in a less expensive hotel,’” says Downing. “Or maybe, ‘Okay, I’d really like to go to Camp Ivywood next summer. What if, to pay for it, I quit gymnastics and we eat out only once a week instead of three times?’

“If at all possible, implement their ideas,” suggests Downing. “You want kids to see that they have at least some control over their own destinies. Plus, it’s a great way to get them to think about which activities they really value and which ones they might just be going through the motions on.”

Then, broach the subject of kids as contributors. Of course, running a fiscally sound “business” (or family) isn’t just about cutting back. It’s also about increasing revenues. If kids are not currently contributing to the family finances—and they probably aren’t—it’s time for a change. There is no reason for them to exist solely on the “expense” side of the balance sheet. They can at least fund their own non-essentials (think video games, prom dresses, that coveted mountain bike) and start saving for college.

“This is the big shift and it may be a tough one for many parents,” admits Downing. “But rather than making this seem like a bad thing—‘I have to work because my parents can’t provide for me’—you can position it as a fun experience that may bring the family together. Tell them the economy is forcing us to do what Americans do best—be innovative and create our own future. It’s exciting and empowering.

“When kids see they don’t have to be ‘victims’ of the bad economy or parental job loss, they’ll be thrilled,” he adds. “They’ll say, ‘Wow, you mean I can build an internet site, invite my friends to visit it and click buttons, and I’ll make money?’ It may turn out to be an aha moment that changes their destiny. At the very least, they will come to see that no matter what life may throw at them, things have a way of working out.”

Ask them to think up ways they might earn income. Obviously, these ideas will vary wildly based on kids’ ages and interests. Don’t limit them to traditional kid jobs like babysitting or lawn care. (Maybe babies make them nervous or they have grass allergies.) Think about what theirpassions are and ask how they might make money from this. If your child loves to read, perhaps she could start a business reading books to the elderly.

“Once the business gets off the ground, your child can take it to the next level,” says Downing. “Perhaps she could franchise her ‘reading to the elderly’ service by subcontracting reading gigs to other kids. The customer pays $20 an hour and she pays her subcontractors $15 an hour. She can market the service to, say, nursing homes as an add-on for clients.

“The idea is to show your child the value of creating streams of income that are not linked to her time,” he explains. “Not only will she make more money, she’ll master one of the fundamentals of entrepreneurship at a young age.”

Make the connection between wealth and giving. Explain to kids that, at its heart, making money is actually about contribution. All wealthy people (so-called “good people” and stingy people alike) MUST supply the unmet needs of others. As your kids contribute to their customers and to society in general, they will automatically make money. Contributing is, of course, the antithesis of being spoiled.

It’s important for your family to contribute in other ways, notes Downing. Generally, those who give of their time and/or money invite abundance into their lives.

“I’m not sure why this happens, but it does happen,” he notes. “I’ve seen it again and again. How much time do you spend contributing to those who are not as blessed as you are? Parents need to model this value to kids. Even if you give them bushels of ‘stuff,’ but also take them with you when you work for two hours at the soup kitchen, they won’t be spoiled. They just won’t. Set an example of giving back, and your kids will feel less entitled to all their ‘stuff.’”

Together, set some family goals. Once you’ve talked through your financial reality, including cutbacks and new contributions, it’s time to plan for the future. Set very specific goals for every family member to meet during the upcoming year. What, specifically, will you do to reign in spending? What will each child do to work toward the creation of his or her new business (and how much will he or she earn)? What will Mom and Dad do to increase their own earning potential?

Of course, money isn’t everything. Downing suggests you set goals in all areas that matter to you—financial, yes, but also (for instance) spiritual, educational, health & fitness, and so forth. Then, have everyone, kids included, come up with 10 high-payoff activities they must do each week to accomplish their goals. (High-payoff tasks are tasks that should be done daily or weekly.)

“Compare your lists to make sure the entire family is on the same page and working together,” advises Downing. “Meet every 30 days to monitor everyone’s progress. You’ll be amazed by how this keeps kids—and parents!—energized and focused and keeps the family close and moving in the right direction.”

          It’s actually this last step, the family goal-setting, that does the “heavy lifting” in terms of un-spoiling kids. That’s because it clarifies your values and makes sure you’re all doing things—say, working twice a month at the animal shelter or spearheading a beach clean-up—that teach kids what really matters in life. These are the kinds of things that get neglected when your family is running on autopilot rather than living by design.

          “How much money you make and how much ‘stuff’ kids get is far less important than a) making sure everyone is contributing to the family, and b) making sure kids learn the value of giving back to others and to society,” he says. “Money itself is not ‘bad’ and cannot spoil kids. In fact, helping people get needed goods and services is the very basis of entrepreneurship.

          “When kids are really ‘giving back’—to the family, to their customers, and to society in general—they won’t have that desperate need to acquire the right clothes or high-tech trinkets to fill some spiritual void,” he adds. “They’ll be happier because they are living in a deeper, richer, more meaningful way. And guess what? YOU will be, too.”

Gregory S. Downing has dedicated his life to teaching his students that every family can truly control its financial future and create a generational legacy with profound, yet straightforward advice and guidance. As a nationally and highly respected author, speaker, family expert, and organizational consultant, his advice has been sought and put into practice by thousands of people from all walks of life. With over 20 years of experience in management, leadership, training, and business ownership, he has proven that his principles of legacy parenting, business promotion, entrepreneurship, and real estate investing both work and create bonds of relationship that go beyond the ordinary.