The opposite of spoiled: The right way to teach kids about money
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 forEntrepreneur 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 discussions 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 wants 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 help 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?
J.D. Roth is an accidental personal-finance expert, a regular guy who found himself deep in debt. In 2006, he started the award-winning website Get Rich Slowly, which Money Magazine named the Web's most inspiring personal-finance blog.