I first found Ron Lieber’s book about a year and a half ago while wandering through my local book store. At that time my children were 4 and 2 and I was just curious by the title of his book. What he articulates with practicality, wisdom, and humor, is that the teaching about money is fundamentally the teaching of values, and just like directly teaching values, it cannot be done in a vacuum with kids being taught a few rare times and with expectation to “get it” without some higher level conversations and processing. If parents want to be intentional about giving their kids certain attitudes and values about life in general, money must be a part of the equation.
Ron Lieber is the “Your Money” columnist for the New York Times. Before joining the Times he wrote the Wall Street Journal‘s “Green Thumb” personal finance column, was part of the start-up teams at the paper’s “Personal Journal” section, and worked at Fortune and Fast Company magazines. He is the autor or coauthor of three books, including the New York Times bestseller Taking Time Off.
Why do parents need to talk to their kids about money and what is the appropriate age to begin talking about money?
RL: You don’t get to choose when. Kids just start asking, often as early as two years old. (No kidding — a two-year old asked a mom I know why she goes to work when lots of other mommies don’t.) If kids aren’t asking about money or asking for things, start around the time the tooth fairy comes (if yours is a money fairy) with three jars. Even if they don’t spend anything in the spend/save jars, at least you’ll get them in the giving habit.
As for why, money is a powerful force in the world, and kids who have no practice with it then make bad decisions when it comes time to figure out where to go to college and how much to borrow to be there. Plus, talking about money is a great way to teach and reinforce the values you hold dear, since what we save, spend and give says a lot about what we stand for.
In an ideal world, what is the role of the parents in teaching about money and what is the role of the school?
RL: I’d just as soon the school stay out of it, since to me, money conversations are values conversations, and I want to be in charge of the values conversation in my family.
Two exceptions though: Not every family has the privilege to be able to have money conversations. The parents are absent or ignorant or have bad habits or can’t bring themselves to talk about it. So in certain communities, a basic financial literacy curriculum on an as-needed basis late in high school makes sense.
Also, late in high school, every child should get a crash course in our nation’s hopelessly complex college financing system. Applying for financial aid is complicated, taking out and repaying loans are absurdly so. And we ask teenagers to make five and six-figure decisions about their futures when they have no earthly idea what they want to do with their lives (nor should they know). Professional adults can be helpful here in explaining the system and mapping the pitfalls.
Do you think the way parents talk about money is learned from how they were taught about money? How do we break that cycle?
RL: Quite often, money isn’t talked about at all, so that is it’s own form of learning that needs unlearning. It starts with the recognition that talking about money is not impolite or impolitic or inappropriate — it’s a natural outgrowth of the curiosity that we want our kids to have. Money is powerful, whether we like it or not, so of course our kids are going to have questions and should have opportunities to practice using ever-larger amounts of money. But silence creates mystery and shame, so telling children and teens that money is none of their business is profoundly unhelpful. Of course it’s their business — the family’s revenues and expenses have a direct impact on them.
As the holidays approach, what is the best way to deal with the onslaught of presents that our children get? Let the child open them all at once? Stash them and let them have one a day? Donate half? Other ideas???
RL: Set some limits. Maybe they can ask for one big thing they want, three things they need and then pick some charities they want to support. Or they get one big want, one need and one experience. Or all experiences and no things. Or you give them money and let them figure it out, with some of it going to charity.
How do you suggest grandparents can contribute to the conversation about money or should they stay out of the whole equation?
RL: Tough one. Grandparents can be judge-y about how their adult kids are spoiling the grandchildren. Or they may be determined to spoil the grandchildren themselves, since that’s what they think they were put on the earth to do. I’d be careful and ask first before making any outsized gesture or gift. Yes, you want your grandkids to love you. But mostly, you want to be remembered after you’re gone (which hopefully won’t be for a while). The best way to make that happen is to do amazing things with your grandkids, not buy them stuff that will break or be outgrown before long.
The pressure to spend money on our children for sports, music, and other extra-curriculars is intense and starts at a young age. You suggest that kids feel pressure to perform when we spend more and more money on them. How do we create a balance of giving them enriching experiences and not overspending?
RL: This is very hard. One important thing is to remind them as they go along that you are not spending money on their activities because you expect them to use their skill to get into college or compete on some kind of national level. You’re doing it because you know there’s real joy and pride to be found in working in a group or mastering a skill or sport. So you only want them doing it if it truly brings them joy. Also, try to remember one of the primary questions of this and all parental areas — how much is enough? How pricey of a violin? Or a baseball bat? Is the tutor and the private coaching for them or for you?
What is the current going rate for the tooth fairy? 🙂
RL: I’ve heard stories of kids in Westchester County NY getting $100 bills. I like the more creative approaches though, like the family in my book that gives their kids a different animal tooth each time they lose one of their own human teeth…
The Louis S. Wolk Rochester JCC will be hosting Ron Lieber, Author of “The Opposite of Spoiled: Raising Kids Who are Grounded, Generous, and Smart about Money” on November 16, 2016 as part of the Rochester Jewish Book Festival. Tickets are available (585) 461-2000 or at rjbf.org.
In this book, he recommends showing your older children this video:
(c) 2016, Nurture: Family Education and Guidance