ScoreCard Research Lisa Harrison - The Penny Hoarder

Picture this: You have two wonderful children and will do anything to make sure they have everything you had growing up and more.

You and your spouse work hard every day. You take on difficult projects, volunteer to work across departments and even take work home from time to time.

And you’ve been doing a mighty fine job up until this point — even if it means you're a little light in saving for your own retirement. After all, the kids are only young once, and you want them to have just as much as their friends.

When the kids are grown, you and your spouse will feel accomplished, having been able to provide a beautiful home, expensive vacations, the latest tech toys and memberships on traveling sports teams. You'll relish the fact that you were able to give your children a better childhood than either of you experienced.

Finally, you'll be able to kick back, relax and enjoy your successes — knowing you raised intelligent, well-rounded, entitled brats.

Wait! What?

Yeah, you read that right. OK, OK, maybe I'm being a little dramatic here with the entitled brat bit, but let's face it: We all know that after the basics are taken care of (think food, shelter, clothing), the most important thing we can all give our children is love -- not the latest iPhone.

There is nothing wrong with giving your children these luxuries as long as they are not at the expense of your own future.

When parents forego investing for their own futures to provide their children with expensive stuff -- whether it be material or experiential — we have a problem. We have a BIG problem.

Your Children Don’t Want to Be Your Retirement Plan

"I really hope my parents don't invest too much money for their retirement. I want them to become a burden and have no other choice than to live with me and my future family when they're old and frail." — No child ever.

Almost half of all American families have nothing saved for retirement. That means  when their wonderful kids are fully functioning adults, many parents find themselves in a new stage of life without a nest egg to take care of them.

Now it's scramble time. They don't have enough working years left to benefit from the power of compounding interest to build a substantial nest egg. Womp. Womp.

Arriving at the precipice of retirement with a paltry sum invested nearly guarantees eating cat food for every meal or packing your bags and asking your children if you can move in.

Basically, by bankrolling your children's every whim when they were growing up, you were choosing to make them your retirement plan. All of a sudden those expensive vacations don't seem so important, huh?

Stop Wasting Money

Stop. Take a breath. Now, let's back up a few paragraphs. Let's assume you're not yet facing retirement. Let's assume you are still raising your children and have decades before your own retirement. Phew! This is a much better situation to be in.

All you need to do is STOP spending your money.

Stop spending on luxuries, and reallocate your hard-earned dollars so you can take advantage of the power of compound interest. By doing so, you'll be putting your children first. I'm willing to bet they would rather not be on a traveling sports team if it means you and your spouse will need to shack up with them when you're old.

Things Your Children Need:

  • Food
  • Shelter
  • Safe environment
  • Love

Things Your Children Do Not Need:

  • Traveling sports teams
  • Designer labels on their pampered butts

So parents, let's stop overcomplicating things. Provide the basics that are required to raise a happy, healthy child. After that, take care of your own financial future before breaking the bank on iGadget23 or that backpacking European vacation little Johnny has been begging you for.

Saying no to your children now means you won't need to rely on their income and charity in the future. So parents, go forth and prosper. Your kids will be glad you did.

Lisa is the founder and resident blogger at Mad Money Monster, a personal finance blog chronicling her family’s journey from doing money all wrong to doing it all right. If you want to follow along, sign up here.