I asked my daughter what her thoughts were about money and she said, “Three words: Spend. It. Wisely.”
I confess that this made me feel rather proud. Perhaps I wasn’t raising a spendthrift after all. Perhaps my child actually understands that money in important and meant to be spent, but also that it isn’t to be frittered away.
“Also, interest. Banks. Blah blah blah,” she added in her very bored voice before I could mentally pat myself on the back.
“Did you just say ‘blah, blah, blah’?” I asked, hoping that somehow the self-congratulatory chatter in my head had caused me to miss something.
“Yup!” she confirmed cheerfully. “But I did learn to calculate simple interest in school today. Does that make it better?”
Uh, kind of?
All this happened in the car on the way home from the library where I had picked up my copy of “The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money” by Ron Lieber, personal finance columnist for The New York Times.
Lieber says upfront that he assumes that most readers live in households making more than $50,000, but says the basic ideas work at all income levels.
“Given how much we invest in them talking about what we spend and save and give away, and why, is one of the important legacies we can leave them,” Lieber writes.
Many adults grew up in homes where money was a taboo topic, or at least not openly discussed, meaning that we don’t have a lot of experience with how parents and kids can and should discuss finances. I know I’ve worried about what amount of detail to share with my daughter, thinking that I want her to be informed but also don’t want details of my bank account shared on the playground.
Much of The Opposite of Spoiled focuses on helping parents engage in regular communication with their kids about money. Chapters include How to Start the Money Conversations, How to Talk About Giving, and Why We Need to Talk About Money.
I appreciated that one chapter was devoted to how to talk with your kids about giving and another about instilling gratitude in our children. I know that we want to raise our children to be appreciative of what they have, have enough to be able to share and to share in the right ways. This helps with all of that.
Lieber also addresses the debate over allowances. As for when, he suggests starting them by first grade. As for how much, he advises between $0.05 and $1 per year of age per week. And should an allowance be tied to chores? Lieber says no. He sees an allowance not as a wage but as a teaching tool that can impart money management skills.
As for chores, “[children] ought to do them for the same reason we do – because the chores need to get done, and not with the expectation of compensation. If they do them poorly, there are plenty of valuable privileges we can take away, aside from withholding money.”
I liked that Lieber also discussed the importance of charitable giving and how to go about handling that with kids so that they think of the hardships of others and “consider the lives of people outside their own community.” He says that it’s okay for there to be different rules for kids and parents when it comes to giving and other financial topics. He encourages parents to talk about why that is if challenged by their kids and says “this questioning of priorities is something we should welcome” and see it as a good conversation starter as kids get older.
There’s a lot of good info in The Opposite of Spoiled, and while it’s a quick read, there are some thought provoking questions to help adults understand their approach to money and financial priorities so that they can discuss them with their kids in an age-appropriate way. In any subject matter, chances are that you as a parent want to be the source of information for your kid so that you can impart your views and values and make sure they’re getting good information. That’s true of money and finances, and Lieber offers solid advice for having those important conversations that will lead to financially aware and even savvy kids.
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