The Opposite of Spoiled: The Right Way to Teach Kids About Money

What's the best way to teach kids about money?

That question has haunted folks for decades — maybe centuries. There are dozens of financial literacy programs in the United States right now, but none of them seems to be effective. Why is that?

I've written before about why I think financial literacy education fails. Here's the short version: Most financial literacy fails because it focuses too much on mechanics — how bonds work, the magic of compound interest — and not enough on behavior. While mechanics are key (they're the foundation, after all), they're not the most important aspect of financial success.

Here's an analogy: My brothers know how to read and write. They're smart guys, and they're both literate. But just because they know how to read and write doesn't mean they practice those skills. One of my brothers used to proudly declare, “I haven't read a book since high school.” (Oh, how that hurt my book-loving heart!) Knowing how to read doesn't make you a reader. And knowing how to save doesn't make you a saver.

Financial literacy is not the answer. We've got to do something more if we want to teach our kids about money.

Fifth Graders
Last year, I spoke to a group of fifth-graders about money

 

John Hancock
Recently, I've had two great conversations about this topic. The first was with John Hancock, the president of the Portland chapter of Junior Achievement, a non-profit group focused on helping kids learn about money and entrepreneurship. He and I met for coffee last week, and we chatted about his own efforts to improve financial literacy.

Tip: Teach children the importance of creating an emergency fund. You can even go so far as helping them open their own online savings account, or one with a local bank to get started.

 

Like me, Hancock thinks it's important to focus less on the “how to” and more on the “why” when it comes to money. He wants to change behavior. His goal isn't to just educate young people about money, but (as he puts it), “to change habits of the hands and habits of the heart”.

Hancock thinks it's important to put people into active simulations, such as role-playing. To that end, his group puts on an annual event for kids called Biztown, which lets them experience a simulated city environment. The children take on the roles of various business and professional leaders in an interconnected community, and they learn how to manage their own personal finances. I know several kids who've done this program, and they love it. So do their parents. The experience seems to have a positive effect on their attitudes toward money.

The local chapter of Junior Achievement also produces The Money Jar, a weekly podcast about kids and money. (Last autumn, I appeared on an episode of this program to talk about how to build savings.)

I applaud Hancock's efforts, and hope to work with him in the future to improve financial education in our area.

Ron Lieber
Earlier this week, I had a long phone call with Ron Lieber, who writes the “Your Money” column for the New York Times. He's currently on sabbatical to write a book called The Opposite of Spoiled, in which he hopes to teach parents how to raise children with financial maturity.

Note: This was the first time Lieber and I have ever connected, though we've been aware of each other for years. After all, I write the “Your Money” column for Entrepreneur magazine, and my first book was called Your Money: The Missing Manual.

 

Lieber has some great insights about financial education. “Financial literacy works best when it's delivered in the moment on an as-needed basis,” he told me.

As an example, he talked about how sixteen- and seventeen-year-old kids make six-figure decisions about education with very little guidance. “The fact that these kids are making major financial decisions in complete ignorance is a crisis,” Lieber said. “We need a financial Americorps to go into high schools and help kids address important questions. Why go to college? Why do different schools cost different amounts? How does financial aid work? What about delaying school for a year or two?”

Lieber agrees that financial literacy efforts have largely been ineffective. He says they should focus on “feelings, behavior, and emotion — all of the things we've realized over the past decade that are at the crux of getting money right.” We talked about his book, and about raising children to be financially mature.

Note: Lieber is midway through writing The Opposite of Spoiled, and he's looking for more people to interview. If you have a great story about kids and money, he'd like to talk to you. Drop me a line, and I'll connect you.

 

“How do children become spoiled?” I asked.

“They're not born that way,” he said. “We do it to them. Nobody wants to raise a spoiled child, yet it happens all the time.”

One issue is what Lieber calls the “first-generation affluent”. When you were raised poor (or lower middle-class), there's a real temptation to give your kids the things you never had. You remember what it was like to feel deprived, and you don't want your children to experience that — even if a little deprivation might be good for them, might build character. (After all, it helped make you who you are, right?) “Kids should, at the very least, have to earn things,” Lieber says.

In writing about spoiled children, Lieber tried to think of what it meant to be the opposite of spoiled. Because the word “spoiled” was originally used to describe food, the opposite is “fresh”, which isn't a good choice in this case. “When we talk about spoiled children,” Lieber told me, “the opposite qualities are modesty, patience, thrift, generosity, perspective, perseverance, courage, grit, bravery, prudence, and so on.”

“That sounds like the boy scout law,” I said.

Lieber laughed. “Scouting imparts a core set of important values, it's true.”

“The thing is,” he continued, “you can use money as a central tool to teach kids about every single one of these. Instead of shying away from the topic, what if we put money at the center of family conversations? What if we assumed not that money subverts values but contributes to them? Because it does. This is the path to financial literacy and financial education.”

Note: Lieber also loves the idea of opening a money store — some sort of business where folks can come in and get cheap, objective information about how to better manage their finances. He's done more research into the practicalities than I have. Neither one of us is actually ready to move forward with such a business, but we like the idea of it…

 

The Bottom Line
As always happens with these discussion about financial literacy, I don't have any answers — only complaints. Over the past few months, I've chatted with Flexo from Consumerism Commentary. He want to start a financial literacy non-profit, and I want to help him make that a reality. But neither one of us really knows what that organization will look like and how it will accomplish its objectives.

I'm not sure we need to have the answers right now, though. Maybe it's enough to simply be asking the questions. I think that's the first step in finding a way to children become masters of their financial futures.

Do you have experience with financial literacy programs? What methods have you found to be effective? What does not work? If you were to teach kids about money, where would you start?

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nicoleandmaggie
nicoleandmaggie
7 years ago

There’s a bunch of literature on this. No magic bullet yet. The best evidence so far is that financial literacy programs work when they’re voluntary and they don’t work when they’re mandatory. Which doesn’t help reach the kids who probably need them most. But people are still working on this question.

Laura in ATL
Laura in ATL
7 years ago

“Not read a book since high school?”

That breaks my heart too . . .

My brother reads maybe 5 books a year and usually a book that is based on a TV show that he is watching – currently GAME OF THRONES. 🙁

Excellent article as always, JD. Glad you are back writing here!

Jane
Jane
7 years ago
Reply to  Laura in ATL

What’s wrong with watching a book based on a television show? Are you opposed to someone reading “Pride and Prejudice” because they watched the BBC Miniseries? Or what about classic Sherlock Holmes because they tuned into the show Sherlock? I hardly think your brother’s choices warrant a sad emoticon. Aside from the fact that the “A Song of Ice and Fire” series is a fantastic and lively read, your premise is just silly and rather pretentious. Did you also bemoan the increase in reading among youth during the 2000s because of Harry Potter? I say whatever gets people reading is… Read more »

Ely
Ely
7 years ago
Reply to  Jane

One of the great things about these movies and TV shows – Harry Potter, Game of Thrones, even Twilight – is that they get people reading. Who cares why they read, they’re reading! 🙂

Carla
Carla
7 years ago
Reply to  Jane

I never understood snobbery when it comes to what people read. Some of my books from the library are classics, technical, non-fiction, history books, biographies, and some are just fun, mindless novels or how-to beauty or decor books. I don’t get the detain just because someone might read for fun.

Nate
Nate
7 years ago
Reply to  Laura in ATL

Just an aside to this…”Game of Thrones” was a book long before it became an HBO series. I believe the first book in the series was released in 1996. All of the books that have been released thus far are between 700 and 1,100 pages.

Lucille
Lucille
7 years ago
Reply to  Nate

And it’s quite a difficult read, in my opinion. Lots of characters to keep track of, a lot of plot, multiple settings. I think it qualifies as a fairly significant book to be reading…

Jane
Jane
7 years ago
Reply to  Lucille

Agreed, Lucille. It is not an easy read, by any means. I wished I could have bought an abridged version that left out all the laborious descriptions of food and clothing! Courtesy of Wikipedia, the five books in the series are 4,273 pages total. I don’t think Laura needs to worry about her brother :). To pick on her a bit more, why is five books in one year even that sad? I read more than that, but I don’t find that number problematic in the slightest. There have certainly been busy years in my life (esp. when my kids… Read more »

Matt @ Your Living Body
Matt @ Your Living Body
7 years ago

I think you’re right about needing money to be at the center of the conversation. I wish my parents had talked to me more about debt (aka student loans). Other than that my parents did a great job at presenting me the concept of compound interest. Another thing, when I wanted big ticket items such as a car, my parents didn’t buy it for me. This forced me to go out and make money on my own. As a teenager I was able to foot my own bills and afford my own things and develop the concept of savings. It… Read more »

Pauline @ Make Money Your Way
Pauline @ Make Money Your Way
7 years ago

I agree that by wanting to give your kids everything you may spoil them. My parents had the complete opposite approach, which as a kid I found pretty hard. But since I wanted more I had to work for it. From my early teens I was baby sitting, tutoring, left home at 17 to move to a college dorm and paid my 5 years of college without incurring any debt so I can only be thankful now. I’d like to help my kids more if I have some, but providing for them may ruin their financial future. I hope they… Read more »

Karen
Karen
7 years ago

Really nice article, and thought provoking. I agree that financial literacy in our country is dismal. I graduated college in 2008, and never once in my 12 years of public school and then 3 years of college did I ever take a class about financial literacy. The most was a seventh grade social studies project about balancing a checkbook. Unfortunately, I feel that financial literacy is ingrained by the parents. It’s a fact that children often emulate Mom and Dad. I think about my cousins in this regard. Their father is wealthy–he works incredibly hard and makes six figures to… Read more »

Janice
Janice
7 years ago
Reply to  Karen

I agree wholeheartedly, Karen, and I’m a grandparent. As with most things, financial attitudes start at home, and parents exert enormous influence on children (even teenagers) beyond what they might think. I think families should sit down together with appropriately aged children and go over the family finances–see where does the money come from and where does it go. Just that alone would be revelatory to most parents, let alone the kids. But that’s where it all starts. In our country we are in denial about finances, not just brought about by ignorance, although that’s part of it, but by… Read more »

Elizabeth
Elizabeth
7 years ago
Reply to  Karen

YES! As a former teacher, I cringe every time someone says “we need to teach financial literacy in schools!” as if that’s going to solve the problem. Yes, it’s part of the solution — but only one part. We have to address what goes on in the home and the values people are learning from other sources (like the entertainment industry).

Marsha
Marsha
7 years ago

It’s a minor point, but I disagree with the belief that children are not born spoiled. They’ve had everything they needed instantly for 9 months. As infants, they scream (impatiently) for food or other attention that’s usually given to them quickly. The twos are “terrible” because they have mobility and no impulse control. Children are naturally completely self-centered. It’s up to the parents to train this out of them.

Jane
Jane
7 years ago
Reply to  Marsha

I agree with you, but I object to the concept of “train[ing] this out of them.” It sounds so punitive.

Perhaps the better way is to teach empathy. If you instill that, it will be much harder for them to remain self-centered.

For their financial success and their overall success later in life, it is also essential to teach them delayed gratification.

As a parent myself, I believe I have said many times to my kids in frustration, “You are not the center of the universe!!!!!” 😉

Marsha
Marsha
7 years ago
Reply to  Jane

Instilling empathy is great, but empathy can’t be instilled until some of the natural self-centeredness is gone. When children are small, you need to teach them to behave properly, regardless of their emotions. To children, saying “please” and “thank you”, politely waiting their turn in line, gracefully accepting gifts they didn’t want, and myriad other things must be “trained” into them. “Training” doesn’t have to be punitive; it simply means teaching over and over again until the child habitually does it.

Jane
Jane
7 years ago
Reply to  Marsha

Good point, Marsha. The term training brought up this image in my head of animal training with a whip, but you are certainly correct that we have to teach our kids proper behavior.

I guess I was getting at the potential disconnect between outward behavior and inner understanding. You can teach someone to be polite and appear less self-centered, but I think the task of making them really understand that they are not the center of the universe is much more difficult.

Sam
Sam
7 years ago

My parents did a good job of modeling personal finance, they were frugal, maintained a budget, saved for my college costs, saved enough for retirement (I hope they are not done with their retirement years yet), etc. But, while they modeled good behavior I can’t say they really taught me specific skills. They did start a savings pass book account for me, and I can recall heading to the bank now and again. I like some of the tools that my brother and best friend have used with their kids, teaching kids how to save, but also to give, how… Read more »

Martha
Martha
7 years ago

Like several other people I agree that one of the main ways to learn financial literacy is through your parents. I am very thankful that they taught me from an early age how do deal with money. As a matter of fact, my first allowance of 10 cents (dating myself here!) was actually given to me in 10 pennies. 1 went to church, 1 went to savings and with the rest I could buy candy. This was continued through out my growing up years so by the time I was actually making thousands of dollars it wasn’t as hard for… Read more »

Anne
Anne
7 years ago
Reply to  Martha

Boy, do I get tired of hearing it all put on the parents.

We were frugal and careful and are living a wonderful retirement because of it.

However, one kid is good with money and the other is terrible. Same home, one just decided to learn something and the other one didn’t. You can look in any family and see the kids modeling different types of behavior.

M
M
7 years ago
Reply to  Anne

Anne,
I experienced the same thing in my family. Saving came naturally to me, although my behavior around money can still be wonky. I natter on to my soon-to-be-college son about personal finance and I sense he listens occasionally. For him, the biggest lessons are self-taught. Recently, he damaged someone’s car door and paid $450.00 to repair it. That was his grad money and he experienced a painful lesson. Tough for me to just watch but a teachable moment for him.

Melissa
Melissa
7 years ago
Reply to  Anne

But Martha wasn’t saying that a child’s success or failure in financial matters was the result of what the parents did. She said, “Maybe to get our kids to be financially literate we need to focus on the parents first.” I agree wholeheartedly with that statement because parents are the first teachers of a child and they need the right tools to be able to work with their kids. But is it all a matter of nurture? No, I wouldn’t say that. Inborn traits come into play; if a person has an addictive personality type, compulsive spending could become a… Read more »

Mrs PoP @ Planting Our Pennies
Mrs PoP @ Planting Our Pennies
7 years ago

My experience with financial literacy programs (outside of traditional micro/macro economics and math classes) was primarily a classroom simulation I participated in during the 6th grade. It lasted all year, but basically we started off earning fake money (room bucks) for doing our jobs as students – being good citizens and earning A’s and B’s. Every week we had to each pull a chance card (much like the monopoly versions, but more realistic) and deal with the possibile fall-out of life’s chances. Once we started accumulating stockpiles (and we had to be careful not to lose them), our teacher opened… Read more »

Patti
Patti
7 years ago

I am trying so hard to raise a child who is the opposite of spoiled! We live in a wonderful community, but it is the type of neighborhood where kids get a lot of stuff and opportunities and there are a lot of kids with attitudes of entitlement. Gimme, gimme, gimme. My strategy with my daughter, now six, has been to address money often but in subtle ways. I started an allowance when she was five, transferring $5 month into her bank account. But I have only mentioned it casually, as she does not really get the connection between money… Read more »

Randy Herington
Randy Herington
7 years ago

In hindsight the best thing we did for our daughter was to have her sit down and write out the checks for the monthly bills and do the check register. She was about 13 at the time. We get paid once a month and so we pay all the bills around the first. She saw the drastic drop in the bank account in about a half an hour! That made an impression. As far as spoiled goes. To me there is a difference in spoiled and spoiled brat! My daughter is spoiled. But she never through a fit if we… Read more »

Nina
Nina
7 years ago

The nuts and bolts should be taught in conjunction with general values about money. My eldest kid is only three so there’s no point in teaching him about IRAs or savings. But I do try to inoculate him from media and television in the hopes that he isn’t so easily persuaded to buy the latest gadget. I also promote delayed gratification so that in time, the concept of compound interest doesn’t seem so foreign. And I would like to encourage simple entertainment like walks to the park and lively dinners around the table, leaving vacations and expensive toys for once… Read more »

Matt Johnson
Matt Johnson
7 years ago

The concept of a “money store” already exists, in a way. Check out NAPFA, an association of fee-only financial planners, who dispense objective financial advice for a set fee (as opposed to a sales commission).

No Waste
No Waste
7 years ago

I want to echo how great Junior Achievement is, my wife and I taught a few sessions and it was a blast.

They’re always looking for help, I recommend everyone sign up.

Rail
Rail
7 years ago

Good post as always JD. Going through money “training” with our seven year old daughter right now. Stay tuned!

Carla
Carla
7 years ago

I grew up in a two parent household (which is a big deal where I came from) and though my mother’s frugal, saving, perfect credit lifestyle should have rubbed off on me, my father’s free spending (mostly on drugs and alcohol and the consequences) is the one I picked up. Not the addiction issues but the careless and the attitude of indifference is what rubbed off on me. Neither of my parents actually deliberately taught me anything about finance – I was expected to pick it up on my own. Fortunately I did eventually, but not without a lot of… Read more »

ldk
ldk
7 years ago

As the parent of 2 young adult children (25 and 19) let me just say how difficult it can be to stress fiscal responsibility in what often feels like a “world gone mad” financially:) My son lived at home and took the bus to the local university (i.e.. we did NOT buy him a car, like most of his friend’s parents or send him to a far away school “for the experience” when the one 15 minutes away was as good or better); my college aged daughter is the ONLY one in her peer group who worked full-time during the… Read more »

Lani
Lani
7 years ago

I agree with previous posters that this can be taught most effectively by parents. However, for more formal school settings, I have heard great things about Dave Ramsey’s curriculum called Foundations.

Tyler Karaszewski
Tyler Karaszewski
7 years ago

I think financial literacy education fails for the same reason as a whole bunch of other things fail. Our school systems are set up to impart knowledge, not change behavior. We can tell kids about interest rates and credit cards and whatever all day, and they may even remember the things we say, but that doesn’t seem to change their behavior any better than when we talk to them about sex or drugs or driving too fast or any of the other things that require a behavioral change. If we could solve any of these problems, we could probably solve… Read more »

M
M
7 years ago

Interesting point, Tyler. I’d like to believe I’m reflective but I know that I can be as myopic as anyone about my behaviors (attitudes, really). Clarity appears really slowly for me and I’m not always inclined to change my patterns. Maybe I’m stubborn or perhaps the “ruts in my mind” run that deep. Thanks for giving me lots to consider.

Jessica w
Jessica w
7 years ago

I thought this blogger had a great article about teaching her daughter to ration “juice” http://www.lilblueboo.com/tag/make-your-own-play-money

Jessica w
Jessica w
7 years ago

When I was growing up(I have 7 other siblings) and we turned 16 we got a bigger allowance I want to say $100 a month. This had to cover our clothes, gas(to and from school & Church), and then a little bit as fun money. My parents had food in the house to make lunches so we had no excuse there, and it was a great way to teach. We could spend it all on clothing but then could ride the bus to school which added 2 hours to each day since we didn’t have gas money anymore. Or if… Read more »

The Warrior
The Warrior
7 years ago

As a dad to a 6 month old, I struggle with how I’m going to teach my son finances. Here’s why: As mentioned above, I came from a lower middle class family so I have always wanted to give my kid(s) everything i never have. However, I am stronger for having to learn the responsibilities i did being lower middle class. My wife got everything she needed (not wanted) and grew up comfortably. She wants to give our children even more than she had. So, it’s an internal family struggle as to what to and not to provide without earning.… Read more »

Big-D
Big-D
7 years ago

JD – I would love to follow-up with you about this (my email is obviously in my post). Being someone who had great parents at teaching a child (me, and my two siblings) about money has helped me on my way. Being a third generational “middle class” parent (mine is a freshman in college), I have gone through a lot of the same steps. There are a few keys which are simple to cover. 1) Start early by saying NO. 2) Teach them what money is (ie. it pays for stuff, no money = no xyz, do this every so… Read more »

Teinegurl
Teinegurl
7 years ago

I’m at this stage now. I have a 6 year old and 7 year old and they start asking for little snacks and treats that they sell at school. I gave them both $5.00 and their own wallets to put their money. Both lost them on different occasions. I told them if they lose the money again that’s it no more! LOL they have kept track of it so far. I have a piggy bank that i keep extra coins and i tell them to be on the lookout or if extended family members give them money to put in… Read more »

Brian
Brian
7 years ago

As a dad of three under the age of 14, I have started the talk about finances with my children. I make sure I include them on discussion about our family budget, but try and talk to them about money items they are interested in. For example they also like to get ice cream from the ice cream truck during the summer. Each night it would cost $6 for all 3 kids to get ice cream. I explained for the same $6 we could go to the store and get 2 half gallons of ice cream and they could have… Read more »

Tara @ Streets Ahead Living
Tara @ Streets Ahead Living
7 years ago

When kids just willy nilly go to college without the consequences of the debt they face, it bothers me. I hope that we can accept kids who don’t go to college more readily so they can enjoy their debt-free existence and perhaps find a career they truly enjoy without the expense of college.

Lori
Lori
7 years ago

Hi. This was a great article. I don’t know how to drop you a line other than make a comment, but I do have a story about our daughter and money decisions she has made over the years. I would enjoy talking to Ron Lieber.

celyg
celyg
7 years ago

I remember reading this article on GRS years ago, it stuck with me. Dad bought his son a soda machine and had him run it as a business. Would love do to something similar with my child someday:

http://thestartuptoolkit.com/blog/2011/10/my-dad-taught-me-cashflow-with-a-soda-machine/

Jody
Jody
7 years ago

Great article J.D.! Teaching kids good financial habits is hard. We are solidly middle class and I struggle with wanting to build in hardships that don’t (really) exist, just so they get it and are not spoiled. “Nope, we can’t afford it” is said often around here. Does that make sense? Does anyone else do that? My kids deliver a once a week paper. They get $5 a week for it, so we give them no allowance. (Ages 9, 7 & 5) My mother in-law advised me to never pay the kids for chores. As soon as you start asking… Read more »

Jane
Jane
7 years ago
Reply to  Jody

I grew up thinking my parents were poor because they often said, “We can’t afford it.” It turns out we weren’t poor, but I think I had a large amount of unnecessary shame and anxiety on account of that terminology. For this reason, I think you should reconsider your approach.

Perhaps you can phrase it differently? “That is not in our budget for [insert category].”

Elizabeth
Elizabeth
7 years ago
Reply to  Jane

That’s what my parents used to say — “that’s not in the budget this month/season/year” or “we already spent our entertainment/clothing/food budget on this instead, so we will have to wait to for that.” It was more of a lesson in setting priorities and planning for things you want.

We did have a few “other families can afford things we can’t” conversations, but they were usually framed by “but we have everything we need”. I don’t think you get that sense of security or dialogue when you simply say “we can’t afford it.”

Paul
Paul
7 years ago

A financial Americorps should be sent into the schools. I love it. College students, and kids that are even younger than that, could learn about paying off debt by viewing these slides that are very helpful. Pass this around to the community because it can really make a difference. Paying off debt can be boring and most kids are just not into learning about it. That is why this Superhero guide was created. This will teach kids to pay off debt like no other lesson could teach them. Here is the Superhero pay off debt guide. nomorecreditcards.com/how-to-pay-off-credit-card-debt-fast/ (I recommend enlarging… Read more »

Mike
Mike
7 years ago

Whenever my dad would buy me something as a kid he would tell me how many hours he had to work in order to afford the item. I never really gave it a second thought as a kid but when I got to be 16 and had a job myself I realized just what he was talking about. I’m 27 now and before I buy anything I still think about how many hours I have to put in at work to afford it. Of course this works a lot easier if you work for an hourly wage instead of a… Read more »

Mom of five
Mom of five
7 years ago

I think kids have to experience life completely on their own before they can really learn financial literacy. For some (most?), that’s going to mean screw ups to varying degrees. My guess is people who say their parents taught them well are just responsible people anyway. My oldest reminds me a lot of Kristen Wong who writes here. By nature, she’s a very responsible person. We’ve taught her about money and any financial screw ups she makes will likely be small and she’ll learn quickly from them. My second child is a really good kid with a generous spirit, but… Read more »

Ross Williams
Ross Williams
7 years ago

Saving money and financial management are not moral imperatives, they are practical decisions. Kids are rarely spoiled by simply having material goods. They are spoiled by being the center of their parents lives. You don’t teach financial management by telling kids about the magic of compound interest. They learn from role modeling and their own experience. Since, most people don’t include their kids in the details of family financial planning, the role modeling they actually see may very well be misleading. So you need to give them opportunities to have their own experiences. Give your kids an allowance, but make… Read more »

Derek @ MoneyAhoy.com
Derek @ MoneyAhoy.com
7 years ago

I worry all the time that our kids are spoiled. We are trying more and more to let them use their own money to buy things so that they can develop a better understanding or time/money/rewards.

My parents did this with me, and I think it really helped me to put things into perspective at a young age.

Nik
Nik
7 years ago

Every time I buy my 2 year old a present we stop by my job. I always tell her we have to stop by work first and get our money for a baby toy. I know this sounds ridiculous, but the idea is to relate work, to presents and toys. You have to work for what you want in life. My baby crys every morning when I leave for work because she wants to play all day, but I am teaching her that work should be associated with being able to take care of your family, by presents, etc.. Exposing… Read more »

Julia
Julia
7 years ago

Sometimes financial literacy with kids can backfire – my middle sister and I used to steal from my youngest sister by trading her “more” money for “less”. So we’d happily give her 10 pennies in exchange for her 1 quarter. I think this went on for a couple months before our parents caught us. She was pretty upset when my parents forced us to return the trade – they were stealing her monies!!

20 years later and she still holds this against me, sheesh! I was just doing what she wanted!

Minerva
Minerva
7 years ago

I have two children, a 10 year old and a 2 year old. My greatest fear is that they will be spoiled and grow up to have no money sense. The reason I fear this is because I feel my husband and I can offer them so much compared to what I had as a child. I grew up poor in a family who struggled with managing their money. I remember as a teenager I made myself a promise that my children would not grow up poor and would have better opportunities as they grew up. Fast forward to today,… Read more »

Georgina
Georgina
7 years ago

I found that giving my children extra chores at a pre-ranged price helped. My children never “got” pocket money. My son sold white mice, popcorn he made himself on the stove top. He also what we called ” bompies” (a little plastic bag filled with juice and then frozen). With his profit he bought an electric popcorn maker. My daughter made dresses and skirts and sold these. My daughter and I ran a stall of a Saturday where we sold our wares. Even I at high school, I cut and styled hair and later made dresses for friends and family.… Read more »

bemoneyaware
bemoneyaware
7 years ago

Totally agree with you as to why financial literacy fails and this is not restricted to just for kids but adults too
Most financial literacy fails because it focuses too much on mechanics – how bonds work, the magic of compound interest – and not enough on behavior. While mechanics are key (they’re the foundation, after all), they’re not the most important aspect of financial success.
We in India have started a website to promote financial literacy focussing on answering how to!

Angela
Angela
7 years ago

My 16 year old son got his first job scanning documents at my office this summer. We set up a checking account complete with a debit card for him and have his paychecks direct deposited. He has tracked his checking account balance with an app on his iPod. He has learned to write checks, calculate and pay his tithes, give to others who don’t have the same means that he has been blessed with, budget, save and say no to spending frivolously. My favorite lesson I have seen him learn was when he was out with friends from church. When… Read more »

Erin
Erin
7 years ago

jD, you ought to go talk to the admin of the Youth$ave program at REACH CDC (www.reachcdc.org). It’s an award-winning program that’s been around for a couple decades, and it’s right in your backyard.

Paul
Paul
7 years ago

It should be required for kids to take a six week financial education class before they can get approved for a college loan. This should be law. I am the CEO of one of the largest debt management companies in America. We are working on a financial education series in regards to this subject. It is time to change the world and I see you guys will be right along with us. Good job guys.

Karla Twomey
Karla Twomey
7 years ago

Awesome post! I agree that it is so important to teach kids about money so they don’t get in over their heads. Thanks for the information about the upcoming book from Ron Lieber! I will keep an eye out for that. I also appreciate the resources you provided.

Karla Twomey

Susan
Susan
6 years ago

Looks like I’m a little late to the party here, but I have a few ideas on teaching teens about money that I’ve shared on my own website. You mentioned that Lieber is looking for people to interview for his book, and I couldn’t find a link for contacting you about my interest. So I thought I’d try it this way. I’ve been a big proponent of teaching financial stewardship for a very long time, and have only recently felt a burden for teaching teens. I’ve been at a loss as to how to go about it too — maybe… Read more »

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