As a long-time personal finance writer, I’ve always known I wanted to teach my kids about money starting from an early age. But it turns out that writing about life insurance and credit scores is worlds different from teaching little kids the basics of money management.
My husband and I had been talking for a while about trying a spend-save-give allowance system with our daughter, who will be six later this year. We’ve actually tried a few systems, but we were having trouble sticking to it.
I happened across this book when I was looking for audiobooks on our library’s app. The title caught my attention, as did the cover, which features spend-save-give jars like those I’ve always planned to use.
I decided to give it a read. After all, what parent doesn’t want kids who are not spoiled, but generous and smart about their money?
In short: I’ve rarely been so happy to stumble across a book in my life!
The Opposite of Spoiled filled in some gaps in my understanding of how to teach my kids about money. And it brought up some brand new points I’d never even considered.
I won’t try to hit all of the good points about Mr. Lieber’s work here. You’ll have to read the book yourself to find them! But here are some of the highlights I loved best:
No-Nonsense About Money Talk
Perhaps what I loved best about The Opposite of Spoiled is its honesty. As parents, we too often dance around difficult issues, when our kids cut right to the heart of things.
Resource: The Best Savings Accounts for Kids
If you have a child between the age of two and six, I can guarantee you’ve been in this sort of situation. The situation where your kid asks you a really blunt, even awkward, question. Then you try to dance away from a real answer. In the midst of trying to ignore, brush off, or under-answer the question, you just get yourself into a verbal tangle.
Mr. Lieber suggests parents avoid all this by, first of all, understanding why their kids are asking the question. This applies beautifully to money-related questions. But it’s excellent parenting advice in general.
For instance, let’s say your child asks why her classmate has a really big bedroom while she has to share with her little brother. Instead of getting freaked out by this perfectly innocent question, ask her what makes her ask that.
Is she really jealous of her classmate? Maybe. But maybe she just doesn’t understand that people’s houses come in all sorts of sizes. Or maybe she likes one particular part about her friend’s experience that you can replicate at home.
Getting to the heart of the question opens up more opportunities for teaching moments about money and “stuff.”
Lieber’s other piece of advice is to never lie to kids about money. If you can spend $10 a day on fancy coffee, it’s unfair to tell your child that you can’t afford the $5 toy he asks for on your next Target run. The fact is that you can afford it. But there are plenty of other good reasons you may not want to purchase that toy.
Maybe the real reason is that the toy doesn’t align with your family’s values. Or maybe your family rule is that kids save up for their own toys, outside of holidays and birthdays. Be prepared to tell your child the truth.
(And then be prepared for tough follow-up questions about why Mommy and Daddy get to spend money on whatever they want, but the kids don’t. Because you have jobs and earn your own money, that’s why!)
All too often, parents assume kids are asking questions for the wrong reasons. And when it comes to money, we can assume their questions are an indictment of our life choices or earning potential. And when they ask awkward questions, we are likely to put them off with half-truths or even patent lies.
It’s much better when it comes to money (and pretty much everything else) to find out what’s behind the question. Then, give truthful answers.
Practical Advice About Allowance
Allowance arguments abound among personal finance websites. Some say kids shouldn’t get any allowance at all. Some say they should only get commission for above-and-beyond chores. But Lieber has an interesting take on all of this.
For one thing, he says, kids need to learn how to handle money. And how are they going to learn to handle it if we never give them money to handle? He points out that we often expect 18-year-olds to make $100,000 college decisions when they’ve only handled paltry amounts of money in the past.
So Lieber recommends that parents give an allowance–a generous one. And he recommends that allowances not be tied to chores.
After all, what happens if Johnny decides he has enough cash stashed away for the next big video game? Are you going to allow him to stop making his bed and taking out the trash just because he doesn’t want to “earn” more money? Probably not.
Instead, Lieber says parents should give kids an allowance just like they give them chores — because they’re part of the family. But they should expect more from kids with that allowance.
The problem is that when parents think of “allowances,” they assume that kids should or will only use that money for fun things. But the key to making allowances a teaching tool, he writes, is to basically funnel kids to a place where they have to make tough spending decisions.
This means being hands-off about the spending portion of a kid’s money. As long as something doesn’t go against your family’s values, they can spend their money on it. But it also means expecting the child to save for long-term goals and to give money to good causes.
Also, Lieber suggests that as children grow, parents shift responsibility for much of the personal spending over to the kids. Eventually, you should be able to give your child their whole clothing budget for the year. It’s amazing how quickly kids learn to make frugal choices when you hand them a few hundred bucks and tell them they can keep whatever they don’t spend on new clothes.
(Of course, this means you can’t bail them out when they blow the money on a new game system. If they wind up with no decent clothes for school, that’s too bad.)
It sounds harsh, but Lieber’s method allows kids to learn in a safe environment, where they’ve got loving parents to fall back on. It’s much better to be that safety net now than in twenty years when they’re cycling back into your basement after bigger money troubles!
Giving Kids the Responsibility They Crave
All of this leads up to the last chapters of The Opposite of Spoiled, which were, I think, the most interesting.
Lieber argues that kids crave responsibility. They want to play a big role in the family, and they want to earn money to buy things they want. The key, as a parent, is to give them that responsibility.
Kids are often capable of much more than we assume. Just think about Amish children and children who grow up on farms. They often tackle chores — consistently and well — that we would never expect our children to handle.
But parents give kids responsibility and autonomy in a safe environment, kids thrive. This means giving kids the opportunity to earn money, and then giving them responsibility for spending that money on what they want and need.
My Key Takeaways
So, how is this changing my own parenting journey? Well, we’ve started giving our daughter an allowance — $6 a week, which is a lot when you’re not quite six. The money gets split evenly between her giving, saving, and spending jars.
We’re learning to have better money conversations with her and to answer questions more thoughtfully. And we’re also learning that if you’re going to take a kindergartener to Target with cash in hand, be prepared to hang around the toy aisle for a really long time.
Bottom line: The Opposite of Spoiled included many excellent ideas that we’re implementing now. And it’ll be an even better resource as our kids grow and become capable of taking on more financial responsibility. I’d highly recommend it for any parent!Topics: Book Reviews