Journalist Ron Lieber has been writing about the complicated relationship between humans and money for two decades. In his newest book, The Opposite of Spoiled, he attempts to identify just what the opposite of spoiled is, in order to guide parents as they prepare their children to become financially wise adults. Lieber collected stories from families who seem to have figured it out. The key, it seems, is to involve children in family money matters from a young age.
Between speaking engagements on his book tour, I talked with Lieber about why kids should not do chores to earn their weekly allowance, the best financial lesson his mother taught him and why you should let your kid fail financially as long as they learn from it.
MintLife: What is one message that you hope people take from the book?
Lieber: That our natural feelings of protection, when it comes to our children in general, are serviced poorly because our instincts are that we should shield them from money, that money is a grown-up thing, that we want them to remain innocent of it, that we fear that they will start sizing people up, or sizing us up, on the basis of how much money we have.
And as lovely and caring as that is, it is also naïve because they are thinking about money all the time anyway. It’s a source of power and mystery, and our silence only starts to confuse them because they know it’s important. They’re drawing their own conclusions. They’re picking up random pieces of information. They’re putting those pieces together in wholly incorrect and inappropriate ways. So, in fact, the best way to protect our kids is to tell them whatever version of the truth is appropriate at their age level and to arm them literally, with the information they need to navigate the world.
MintLife: Why do you think it’s the right time for this message?
Lieber: The big macro reason has to do with the fact that all of a sudden we’re asking these kids to make six figure decisions about college at the age of 17. This is completely insane, right? Being ready to make six figure decisions, what may be the most important financial decision of your life, requires like a decade of prep, so that’s the practical side of this.
The more emotional side of this is that talking about money has a direct connection to teaching kids values. And all along we’ve assumed the worst, that if we talked about money that those conversations would be impolite, they would be impolitic, they would be age inappropriate, they would create money-grubbing kids, and none of those things are true. In fact, they’re completely false.
MintLife: What is one smart thing you remember your parents teaching you about money when you were young?
Lieber: I don’t have that many memories of what went on around money before 12 or 13. But when my parents split up, things became much more acute. The thing that I remember most was that my mother brought me along to meet with this financial aid consultant that she found. To me, that was a great bit of parenting because she could have attempted to shield me from all that. But she didn’t because it involved me and my future and the amount of debt that I was going to take on, and the size of the financial aid award, and why shouldn’t I be a part of that, right? I mean, it was my education. And the fact that she was willing to be transparent at that point was actually helpful and it was in fact protective.
MintLife: Allowance is a hot button issue for parents. Why do you advocate a regular allowance that’s not tied to whether or not children do chores?
Lieber: Because on the most practical basis, if you tie allowance to chores the kids will at some point decide that they have enough money and then they are just going to stop doing the chores. And so, if those are the terms that you’re setting, you’re going to end up in a situation where the chores aren’t getting done.
And so, you have to decide what your point is. If your point is to try to create some kind of fake work situation in the house where the kids are getting a wage, then you have to understand that the kids will quit the job or attempt to suspend it temporarily when they feel like they have enough money. If that’s okay with you, you can do it that way, but I think most people want kids to do chores because it’s important for them to learn how to do housework. It’s a good life skill and, as a member of the household, they ought to contribute no matter what. If that’s the case, then why should they be paid?
MintLife: How do you know when a child is ready for the next level of allowance, both financially and also in the amount of responsibility that they have?
Lieber: You should advance to the next level a year before you think they’re ready, just to push them along. For many parents, the next level involves setting up your kid with a clothing allowance. It’s “let’s sit down with the entire clothing budget and talk about what it is and why you’re willing to pay this amount.” Then take the whole lump sum and turn it over to the kid and see what the kid does.
And wait to see how badly they mess it up. You want to put them in where the water is a little bit over their head so that they learn to handle the bigger stuff.
MintLife: What advice do you have for people who think their kid is already spoiled?
Lieber: More often the way they ask that question is, “I haven’t done any of this and my kid is 14 or 15 or 17. Is it too late?” And my answer is always no. There’s a great study in the book of all these kids in Minnesota who are 15, 16, 17 who were found to be really materialistic and then [the researchers] put them through their paces and found that not only could they turn them around, but that the changes were lasting if you gave them the right programs. So you can definitely make changes and I’m not sure it’s ever too late as long as they’re still under your roof for at least a period of time.
This interview was edited for length.
Kim Tracy Prince is a Los Angeles-based writer who has a husband, two little boys, and a healthy preoccupation with money matters.