Teaching kids about money is complicated. We want our kids to be responsible savers, but not greedy hoarders. We want them to be generous and philanthropic, but not naïve and idealistic. We want them to be successful, but thanks to 2,000 plus years of meek-shall-inherit-the-earth messaging from a religious culture derived from the Israelites’ slave-uprising, we’re afraid of also becoming the Pharaoh.
In Republic, Plato is already confused about how to understand the fact that financial success can be the product of unjust actions. In dialogues that read like early behavioral economics, Plato challenges democratic incentive structures, wondering whether the desire for wealth motivates individuals toward justice or injustice. “All men believe that injustice is far more profitable than justice,” says Glaucon in one dialogue from Republic. We all aim, he believes, to profit from bad behavior while appearing to be good.
In the modern world, we still haven’t figured it out. Especially when it comes to our kids, we struggle because our desires are inherently conflicted. We want to raise them in such a way that they become strong successful individuals that prioritize their own needs, and we also want them to give and share in a way that puts others first.
Plato may have been one of the first to ask these questions, but we’re still trying to answer them. Ron Lieber writes the “Your Money” column for the New York Times. His new book, The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money, is new this week. An unconventional parenting book, The Opposite of Spoiled focuses on teaching us ways to instill good values around money.
I reached out to Ron to ask him a few tough questions about kids and money. He helped me to understand 5 things successful parents know about kids and money.
1. Money is emotional, not rational.
Jordan: One key theme of The Opposite of Spoiled has to do with talking to your kids about money. Most parents struggle with talking to their children about what they earn and what they can afford to spend. Many parents try to teach money lessons, but sharing anything about their personal finances remains taboo. It makes me think of Sigmund Freud: when he established the practice of psychoanalysis in the Victorian era, he recognized our discomfort and repression around sex. Nowadays, practicing analysts say that clients are comfortable with sex but don’t know how to talk about money. Money is the new Sex. Just like with birds and the bees, many parents feel awkward, confused, and embarrassed about their own relationship to money. How do we, as parents, make sure we don’t transmit that sense of shame to our children?
Ron: First of all, therapists can’t talk about money either. I went to a meeting of the big New York City society of psychoanalysts not long ago that was all about how to talk to clients about the bill. Many of these people cannot bring themselves to bring it up or demand what they’re worth, even as they try to get their clients to talk about money while they’re on the couch.
When it comes to kids, I think the sex talk is actually easier. At least with sex, there a lot of basic biological facts. And most kids shouldn’t be having sex and won’t even think about trying to have intercourse until they’re at least 11 or so. They’re interacting with money, however, at least from the time they’re interacting with the tooth fairy.
Plus, money is so much more about feelings than facts: the difference between wants and needs; the question of who is rich and who is poor and whether that’s fair; the decisions around just how much of your money to give away to people who have less than you. It’s much harder, this money stuff.
The best way to avoid transmitting shame is to avoid silence. Silence, to kids, is a sure sign that we are hiding something. Maybe we’re ashamed of what we have, or maybe we’re ashamed that we can’t have what everyone else has; it depends on the parent. But the first step here has to be towards putting an end to dodging the questions or telling outright lies—like “we can’t afford it.” Kids see right through that sort of thing. And when we shut them down, or shout about their inappropriateness, or tell them it’s none of their business, we train them to turn away from us on other matters of great import.
2. Understand the differences between desire, value, investment, and quality.
Jordan: Reading your book, I thought about all the “I want…” and “can I get?” conversations that I overhear between parents and children in the toy aisle at Target. Parents really seem to struggle saying no. The three common errors I notice are 1) Mom or Dad buys the kids whatever they want. 2) Mom or Dad only feels comfortable refusing with anger; they harshly demand that the kid stop asking, but don’t really provide an explanation. Or, 3) Mom or Dad says “I can’t afford it” despite the fact that the kid knows they just spent a fortune on a hot stone Swedish massage. On the surface, there seems to be a disconnect between what parents value and what kids value; to a nine year old, that giant LEGO Star Wars set is way more valuable than bodywork. Among adults, we think these things are subjective—a matter of opinion and taste. But isn’t it also our job, as parents, to transmit our sense of value and worth to the next generation? As you say in the book, “Every conversation about money is also about values.”
Ron: It’s our job to transmit our sense of values and worth, but this is a process that takes time.
The best way to deal with a case of the “I wants” (which is not a sign of a character flaw by the way — kids want all sorts of things, no biggie) is to give them more control not less. That’s not to say they get more money. Instead, give them a decent-sized allowance and then tell them it’s up to them what to buy. But (and this is a big but) there will be no more other parental purchases of stuff in the “want” category until the holidays or a birthday.
If you can afford it, give them just enough allowance so they can get 30% or so of what they want. That’s enough not to be completely deprived, but not so much that they won’t have to make plenty of tradeoffs. Then, when they buy stupid stuff, they’ll learn soon enough what is worth spending money on and what is not.
That said, we’re still free to set rules about banned items—naval piercings, toy guns, heels, Heelys—forbid whatever you want. It’s still your house, even if they think it’s their money once they get it!
3. Spend thoughtfully. Spend mindfully.
Jordan: Sometimes when I look at the way we behave as consumers, I’m shocked. How can it be that coming right out of the Christmas season—retails’ bread and butter—Marie Kondo’s The Life Changing Magic Of Tidying Up can spend weeks at the top of the bestseller charts? First, we go into credit card debt in order buy unnecessary stuff we can’t really afford, then we throw out all the stuff we bought last year and call it “decluttering.” This is binge and purge consumerism, the pathology of planned obsolescence. We choose the novelty of accumulate-and-declutter over the pragmatism of reuse-and-sustain. How can we even begin to teach our kids how to be mindful consumers—“grounded, generous, and smart about money”–when we have so many bad habits?
Ron: It does start with us. That means looking at our credit or debit card statements (or spending a month or two tracking cash outflows) to see the list of what we do and what we spend. This list literally represents our values, since it is an actual transcription of what we value enough to spend money on. Does that list seem to be an accurate reflection of what you stand for? If not, it’s time to spend on fewer things or different things.
Once you have your own head on straight, you may well come to the same conclusion that an increasing number of happiness researchers have come to: Experiences bring greater joy than buying things. The best translation of this for kids goes something like this: We’re a family that believes in doing stuff more than we believe in having stuff. Let’s buy less and spend less and put more money away so we can afford one more vacation or a weekend away or 5 more museum visits or cool day trips this year.
Also, one outtake from my book has to do with instituting family rituals around spending money. One family I wrote about makes a point of stopping every time they see a record store they’ve never been to so everyone can buy something. This makes all kinds of sense because of the messages it sends and the values it transmits: Artists are worth supporting; independent retailers won’t exist if we keep buying online; there’s always some new band or tune that can turn your brain inside out if you’re curious enough to give it a try. It’s a shared family adventure.
My family does the same thing with ice cream parlors; we never miss a new one and talk often about our favorites. These are relatively cheap thrills that can create lasting memories and real traditions.
4. Recognize cultural prejudices and societal norms.
Jordan: What about gender and class? Boys and girls don’t learn the same lessons about spending and saving. Usually, when we think about gender and money, we think about the lessons parents teach their children. But I’m more concerned about the cultural messaging. When I look at video games and iOS or Android apps aimed at kids, for example, they split very clearly along lines that correspond with traditional gender stereotypes. You can see it in the icons: pink and blue. But what really concerns me is that the games aimed at boys always involve some sort of resource management: collecting coins and power-ups, considering carefully the best times to save and spend so as to achieve your ultimate objectives. The games aimed at girls are usually about manipulating aesthetics or collecting things. Things get even more disturbing when you analyze products aimed at different socio-economic classes. You’ll find media that perpetuates a kind of meek-shall-inherit-the-earth mythology—a story that having money and understanding it will turn you into Mr. Burns from The Simpsons, cold, heartless, and ugly. On a cultural level, how do we begin to shift these money narratives?
Ron: I don’t know gamer culture that well, but it doesn’t surprise me to hear that. There’s a lot of evidence that girls hear less about money, talk less about it with their parents and have lower expectations for their own salaries than boys.
As the father of a daughter, this makes me furious. Every parent needs to remind themselves that something is conspiring against financial knowledge and high expectations in our girls. And we need to keep it in the back of our minds every time we talk to them.
As for other media, I’m putting together a list of the best books (mostly fiction) for kids ages 3 to 18 that deal with themes of money and social class and compassion and understanding. There are dozens of great ones; I hope to have it on my website by the end of 2015. If your readers have titles to nominate, please ask them to contact me.
5. Life is full of painful ethical conflicts.
Jordan: One of the things I struggle with the most, in terms of money and parenting, is figuring out how to teach my kids about global socio-economic realities. It is very important to me that they understand the ways that our consumption economy is built on the backs of less fortunate nations. I want them to understand how the developed world contributes and creates some of the struggles that plague the global south. I’m not sure how to mediate the tension between teaching them to participate and appreciate the positive parts of our culture while also teaching them to recognize the economic injustices we sometimes perpetrate in other parts of the world. Should I tell them about the conditions in which people assemble their electronics and mine the minerals for semi-conductors? It feels like there’s an inherent contradiction between our economic actions and our cultural values that makes me sometimes just want to avoid the conversation all together. Any suggestions?
Ron: The first thing that popped into my mind was to suggest that you show your kids this Radiohead video…
It opened my eyes and my daughter’s too. (Hat tip to my great and brilliant friend Christine Bader for that one; to earn her living, she helps grownups square their idealism with their corporate day jobs).
The second thing I thought of was something that Zoe Weil explained to me when I interviewed her for my book: You want to try to make as many choices as you can that do the most good and the least harm. We don’t always know for sure, but it’s fascinating to try to figure it out even when there isn’t enough data. It’s a good exercise for kids, especially.
Our daughter stopped eating animals when she began to consider the world this way. Her parents still eat meat, though not as much and much better quality.
Ron Lieber’s The Opposite Of Spoiled will be released on Tuesday, February 3rd.
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