Are you vegetarian primarily for health reasons? If so, then I think a little bit of meat now and then is not unhealthy. But, if being vegetarian is for ethical reasons, then I think its completely fine to insist that your children eat ethically. We don't permit children to walk around punching other people just because we want to let them make their own decisions in life, so why is eating animals different if the reason for being vegetarian is ethical? In this case, I'd be ending the seafood eating!
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This is something I've been thinking a lot about lately, since DS is nearly 5 and really wants to be just like his omni father in every way, down to eating animals. He loves animals, but keeps insisting he wants to eat them too. DH and I have a deal where the kids will be vegan until they are 14 at which point DH will take them to see animals being slaughtered and then the kids can eat whatever they want. DH eats whatever he wants to outside of the house and eats vegetarian inside the house.
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Is there middle ground for you and your DH? It is hard when the parents eat differently, since the kids are so aware of that difference. In regard to wanting to be more like his friends, I'd see if there is any veggie group around so your children could have a few vegetarian friends. Also, I'd recommend developing a few more super fabulous veggie meals, so that both your DS and your DH are wowed by how delicious veggie food can be.