It's all about when, why, and how we should start talking about money with kids of all ages.
Parents have a lot of tough conversations with their kids, talking about sex, drugs, alcohol, and more. But oddly enough, the topic of money rarely comes up – at least, not in the kind of detail and with the repeated emphasis that it deserves. Considering that decisions about money have a lasting impact on a person’s life, it seems irresponsible for parents not to be talking as openly to their kids about financial matters as they do other things.
This is the premise of a new book by Ron Lieber, a personal finance columnist for the New York Times. Called “The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money,” it fits in nicely with the topics we love on TreeHugger – frugality and conscious parenting that promotes independence in children.
Lieber starts with the foolishness of letting teenagers sign for massive student loans:
“The people making the final decision about whether to take on tens of thousands of dollars of student loan debt are mere teenagers. Figuring out how much to pay for a college education is one of the biggest financial decisions people make in their lifetime, and parents often leave the final call to a 17-year-old who has never purchased anything more expensive than a bicycle. There is really only one word for this state of affairs: lunacy.”
The big money talks must begin early, from the moment children begin to express curiosity about money. Parents must not shut down their questions. They should be prepared to answer if a child asks, “Are we rich? Are we poor? How much money do you make?”
The best response, Lieber advises, is to ask a question in return: “Why do you ask?” This may reveal school-related dynamics that have led the child to ask, and it gives the parent time to consider a wise response.
The book covers topics such as how to manage allowances (Lieber is a fan of allowances as a teaching tool, not tied to household chores), how to encourage kids to spend their own money wisely, how to discourage materialism, how to promote generosity and instill gratitude. My favorite chapter was ‘Why Kids Should Work,’ and the argument for giving our kids real-life work experience, instead of fancy ‘voluntourism’ opportunities. Kids should hold jobs and help out around the house:
“Getting our own children to do more, and earlier, in the way of preparing, cooking, and cleaning up after meals isn’t easy. It takes practice and persistence, in the same way we may need to hover over them during the first months of music lessons as they whine and complain when things don’t come out quite right. Still, failure should not be an option. Every child is capable of contributing to meals in a significant way, and we shouldn’t need to pay them to set the table, boil the pasta, or clean it up.”
While Lieber’s book was full of interesting real-life stories, my one complaint is that he often writes about families that are so wealthy, their anti-spoiling measures are still shockingly excessive. For instance, one family in Greenwich, Connecticut, lives in a “very substantial house” and decided not to “get a generator to keep the lights and air-conditioning on during long-lasting power outages.” This is so the “kids should know what it is to suffer.” Mercifully, this awful example was at the very end of the book.
Despite this, I still enjoyed the book, which is a quick read. It has made me determined to share household bills and credit card statements with my kids to help them grasp the costs of living, and it has made me more confident in limiting what they can and cannot spend their own money on – an ongoing point of contention in my family. Lieber is absolutely right in that money talks need to happen earlier and longer with kids and his book provides a good, practical framework for getting started.