Reuters Money

“How can you do that to your kids?”

That’s the question Sacramento’s Sarah Cook hears all the time. And rather than making her feel embarrassed or guilty, she revels in the scorn. Because it tells her she’s on exactly the right track.

To be clear, Cook isn’t quite the Tiger Mom made famous by author Amy Chua, whose drill-sergeant approach to parenting has lit up message boards all over the Web. She doesn’t loom over her three kids during their piano lessons, or fire thousands of math problems at them until they achieve absolute perfection.

What she is doing: Leading a one-woman revolution against today’s entitled generation. Most kids these days want what they want, when they want it — and God help the parent who doesn’t provide the latest-generation iPhones and Xboxes, because you’re in for an epic tantrum.

Enough, says Cook. It’s time to get tough and furnish our kids not with their whims of the moment, but with the financial smarts that will last them a lifetime. “Parents have given our kids way too much, and always just say ‘I’ll buy it for you,’ ” says Cook, who started the website RaisingCEOKids.com. “I want them to be not so entitled.”

What that means in the Cook household: A fixed family budget, encouragement to develop their own income streams, and a system of tradeoffs where if the kids have their hearts set on buying something, they have to cut back elsewhere. So far, it’s working like a charm. When the kids wanted a trampoline, it meant scotching a family vacation to New York City. When they want a particular meal, instead of racking up big restaurant bills, they cook it themselves at home. When they wanted to free up some money in the family budget, they cut back on their cable package, and now stream Netflix and Hulu instead.

And when her son Jacob wanted toys and the latest tech gadgets, he simply had to earn the cash himself. Now, at 14, he has already run a business selling Pokemon cards on eBay, stripped down old video-game consoles and resold the parts for a profit, and fixes computers for $20 to $30 an hour.

“When other parents criticize me, I ask them to look 15 years down the line,” says Cook. “Nobody is going to pay rent for their kids, nobody is going to be buying them food. If I didn’t start teaching them about money, and what things actually cost, then I’d be lying to them about how the world works.”

And there’s the irony: In wanting to give our children every last desire, we’re actually harming them. “My technique is a little harsh, but I ask parents why they’re raising deprived children,” says Kol Birke, a financial behavior specialist with Commonwealth Financial Network in Waltham, Massachusetts. “Because tough financial times teach you how to get by, and that you don’t need luxuries to be happy. Why do we want to deprive our kids of those important lessons?”

That often leads to one of Oprah’s Aha! moments, says Birke. Parents suddenly realize how their money behavior is undercutting the values they want to pass on to their kids. Even though it seems like the ‘easy’ thing to give in and indulge, it’s a wrong-headed lesson that will rear its head a couple of decades later.

So put some money and responsibility in their hands, for instance with a small weekly allowance, and let them learn how to handle it wisely. “It’s important to let kids make small mistakes early,” says Birke. “When they discover that blowing all their money on candy at the movies is not such a great idea, then they’ll be less likely to have mountains of credit-card debt later in life.”

As for Sarah Cook, sure, she feels like the bad guy sometimes. But over the long term, she believes her tough-love approach to family finances will set her kids up for a prosperous future. “What is it you want your kids to know how to do?” Cook asks. “Do you want them to expect everything to be paid for them, and end up living at home? Or do you want them to learn how to create money from their talents, and be self-sustaining?

“The next time you feel like indulging them, ask yourself those questions.”