I’m always on the lookout for good ideas about how to support my kids in learning about money in ways that are both practical and meaningful. When I read Ron Lieber’s Opposite of Spoiled, I was struck by the stories of real families, the many practical tips, the connection between money and values, and the emphasis on relationships. So many of the ideas in the book felt consistent with the approach we take here at Goodbudget. And more than anything, I was excited about the idea of raising my children to become young adults who are grounded, generous, and smart about money.
The basic premise of the book is that no one wants to raise children who are spoiled; that is, parents always seek to raise kids with traits and values of patience, thriftiness, modesty, generosity, perseverance, and perspective. Ron Lieber argues that these traits and values can be taught with money, and he highlights this by sharing stories from everyday families who talk about money. It also covers how to approach everything from the tooth fairy to allowance to cell phones. Ron Lieber places emphasis on the children’s questions and curiosity and how to engage them. And he also names the underlying questions parents have — when to start what, where’s the line between a want and a need, and how much is too much or enough? He frequently goes back to the theme that every conversation about money is also about values.
Here are 6 ideas and anecdotes from the book that really stood out to me, and I hope that you find them helpful or thought-provoking as you engage in money topics with your own family.
Idea #1: Spend, Save, and Give Jars
When your kids start to have money of their own, get them thinking about how they might use it by starting them on a simple budget. Instead of having your kid put everything in a single piggy bank, set them up with three different jars to put money in, labelled “Spend,” “Save,” and “Give.” Every time they receive money, they can put some in each jar. In the beginning, you’ll need to show your kid how to spread their allowance or gift money across the jars and prompt them to use money from the appropriate jar when the opportunity comes. But after some practice, your kid will learn to take care of both parts on their own, and they’ll be managing a very simple envelope budget!
Ron Lieber points out that the specific containers you use are also important. Choosing clear containers will let your child see their collections of coins and bills grow and shrink, and choosing jars that are easy to open will help your kid easily add and remove money on their own. He also recommends using visual aids to help remind your kids of their goal — if your kid is working on saving for a special toy, cut out a picture of that toy and tape it to the jar.
We’ve used this three-jar system in our family since we started giving our kids a weekly allowance, and it works quite well for us. However, I learned pretty early on that glass jars were not a good choice for our little ones because we ended up having to clean up broken glass! We’ve since switched to other containers. And recently, our kids had the idea to create a specific kind of giving jar, called the “food bank jar,” where they sometimes contribute part of their allowance.
Idea #2: Let the kids drive the giving
From a young age, kids love to give gifts, and it’s incredibly empowering and formative for them to choose to give money of their own. When your kids make a donation, try making the gift in their names. Then, once the organization starts sending mail to the donors, your kids can enjoy and feel a continuing sense of ownership as they read the snail mail. Another option is to contact someone at the organization to see if you can make a donation in person. A direct visit allows your kids to see where the donation is going, and is another way to help them feel invested in their giving. And as you make decisions about the family’s giving budget, include your kids in the process. You can even give them a portion of the family’s giving budget to manage and increase that share as they grow up.
In our family, we gather canned goods to donate to our local food bank, and I’ve brought my kids to make the donations in person. Even though they’re still too young to volunteer in the warehouse, they got to see where the food is stored and sorted, and they’ve also seen the neighborhood food pantries where the food is distributed. For them, the in-person experience gave them a better sense of what happened to their donations. In fact, recently they decided to open a “store” to raise money to donate to people in need of food. Our family members have been generous to support them in this endeavor, and we are looking forward to taking the money they’ve raised to the food bank in person. While we’re at it, I need to remember to have them note the donation in the kids’ names so they can open the mail!
Idea #3: Create your own counterprogramming
A lot of the media we consume puts forward various forms of advertising that play to our wants. Ron Lieber encourages parents to fight against this by creating what he calls “counterprogramming.” He shares about families who make a game out of calling out subliminal messages in advertisements as they watch them. Other families turn off the sound on ads and make up silly dialogue as a way to expose the advertisers’ aims.
Before I had children of my own, I sometimes watched sports games with kids who’d learned to mute the advertisements from their parents. When the ads came on, they’d hit mute and start making up dialogue like “Oooh, this is sooooo tasty! The steam is rising off the screen! Order a pizza right now!” I found it hilarious to hear these elementary school kids’ impromptu, creative scripts. While my own family doesn’t watch many videos with ads yet, I’m keeping this idea in my toolkit for the future!
Idea #4: Pick a brand to define what clothes kids “need”
When it comes to clothes, it can be hard to draw a clear line between needs and wants. Your kid needs shoes, but do they truly need the most popular sneakers every season? Some families choose a brand to represent the “needs” line. The way this works is, first you pick a brand that reliably makes clothes that are a good value. Then, if your child asks to get a new article of clothing, you can make your purchase decision by comparing the price of the item they want to a similar item from that brand you chose. If the item they want is cheaper, you can buy it, satisfying both a need and a want. If it’s more expensive though, then it’s more of a want, and your kid can choose to cover the extra cost with money from their allowance, work, or birthdays if they’d like it. By doing this over time, kids will learn whether these choices were worth it to them.
For myself, I love that this approach gives both parents and kids clarity about what’s needed vs what’s wanted. Instead of having to haggle with each other over the price of every single item of clothing, it’s clear how much the parents will pay and when the kids will contribute. I also love that it gives kids the autonomy to decide what they want to wear, the responsibility to pay for the part above the parents’ contribution, and the opportunity to learn from their own spending decisions. Even if they make mistakes, the stakes are still relatively low.
Idea #5: Have teens pay for their smartphones and data
Some families define their kids’ phone needs as a basic flip phone that can text and call. Beyond that, the kid can save and pay for more if they want. In one family, the parents expected their children to pay for the device and make a deposit for one year’s worth of data at the outset. And for them, their oldest child chose not to get anything beyond a flip phone until they were 18.
My kids are a little too young for cell phones right now. But I love the sense of responsibility, autonomy, and decision making that kids can exercise with this arrangement, and I would consider setting these kinds of expectations when they’re older. While every family may draw the line of what the parents will provide differently, any structure like this can allow kids to decide for themselves what’s really important to them.
Idea #6: Prepare kids to pay tuition for the first semester of college
This idea works best if families set this expectation early, like in the freshman year of high school. Depending on what college your kid ends up attending and what financial aid they get, one semester’s tuition could cost anything from $7,000 to $15,000 in the US. When they start high school, make a plan with the kid about how they’ll save that amount, such as working part-time or summer jobs. For the family that shared this idea in Ron Lieber’s book, all of the kids paid for the first semester of tuition with their hard-earned dollars, which helped them see the value of their college classes.
I really love how this plan promotes a teen’s sense of ownership and engages them in the process of saving for college, setting a concrete SMART goal, and learning to get and work at a job. For families like mine that are saving for college but don’t expect to be able to save the full amount, this is also incredibly practical. It would help to cover some of a really big bill and reduce the amount of school loans our kids may need to take on. And if they get a big scholarship or choose another path in life, they can always use the money they’ve saved for something else!
And many more ideas…
If you’re looking for wisdom on a specific topic, I’d recommend checking out the book for yourself. It covers how to handle a lot of common topics, like the tooth fairy, allowance, chores, charity, saving, birthdays, holidays, cell phones, checking accounts, clothing, cars, part-time jobs, and college. The book comes with an index, so you don’t have to read the whole thing! On the other hand, if you want to go deep, there’s a whole bibliography.
What are you doing to try to raise kids who are grounded, generous, and smart about money?