Unless your children are giving you the silent treatment, sooner or later you’ll get questions like these: “Are we poor?” “How much money do you make?” And “Will we have to move if Dad doesn’t get a job soon?”
Those types of money questions can render many parents tongue-tied at exactly the wrong moment. You know you should respond, and you often respond with this question: “Why do you ask?”
Not only is that a great stalling tactic that buys a few seconds to collect your thoughts, it allows you to get to the real heart of your child’s question, which may be an entirely different matter, according to Ron Lieber, the author of a new book called “The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous and Smart About Money” (Harper, $26.99).
Lieber, a father and a personal finance columnist at The New York Times, wrote the book to help parents overcome many of the struggles and insecurities associated with talking to their kids about money — a subject that can be tougher than a “birds and the bees” conversation.
Though the book is intended for adults, Lieber clearly hopes the information will be shared with children to help instill strong values about money and develop their daily routines about paying bills, living on a budget, saving for the future and giving to charities.
Sprinkled with anecdotes and examples gleaned from many interviews with parents, Lieber tackles topics ranging from the tooth fairy, birthday presents and allowances to cellphones, cars and college.
I’m all with Lieber on one of his key points — that parents need to take advantage of those moments when your curious kids ask a question about money.
By asking “Why do you ask?” to a question about being rich or poor, for example, you might discover your 8-year-old heard talk on the playground about someone’s dad making a million bucks. Rather than sharing your bank statement, Lieber suggests redirecting the conversation to talk about how you have enough money to pay for groceries, clothes and trips for ice cream, with a little left over. Of course, with older kids, the questions and answers might become more complex.
There’s also a right way and a wrong way to asking a question about your kids’ question. Ask in the most encouraging, enthusiastic tone possible, Lieber said. Sounding suspicious could shut down the conversation.
Lieber is also a big believer in giving kids a regular allowance — with one caveat: Don’t tie the dough to a list of chores. Start paying an allowance as soon as the kids can count and have a consistent payday system.
Not that Lieber is opposed to giving kids responsibilities around the house. They should be expected to chip in. But he sees allowances as a money management tool, rather than as a way to develop a young person’s work ethic.
Better to withhold privileges — rather than money — for falling down on the job, Lieber said.
Despite all of Lieber’s straightforward advice, you still might wonder why money lessons matter. Is the point of all this effort to avoid raising money-grubbing kids, or is there a bigger payoff down the road?
As Lieber notes, today’s young people are expected to be even more self-reliant than their parents when it comes to saving for retirement, picking health care plans, buying car insurance and handling other money matters.
That’s why it’s crucial to extend a helping hand to your kids so they can build up their confidence and comfort zone around money before they leave the house for good. Do that, said Lieber, and the stumbles later on will be fewer and softer.