Naturally, common sense should prevail and the environment, nature/personality/”street smarts” of the children, etc. should all play a part in how much freedom one’s children should have. Parents also need to role-play with their kids and explain the many different worst-case scenarios they might experience and help them determine what the best actions would be if they encounter unsavory characters or dangerous situations.
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I agree that we’ve become too protective. Myself included (and my wife even more – I’m trying to back her off).
I’ve done the “what to do in the worst case scenario” thing that you mention, CAR, and now I’m not sure it was such a good idea. It’s not like we bombarded our child with this stuff; it was occasional. Yet sometimes she’ll ask about it like she expects it to happen some day. I have to explain that it’s very unlikely that something like that will ever happen to her. That she’ll probably go her whole life and nothing like that will ever happen. I’d like her to be a bit less afraid. Fear is one of the consequences of over-protective parenting (along with lack of independence and underdevelopment of life skills), and that fear will hinder their development if we over protect them.