I’m excited, because up until now, I have neglected my civic duty to teach my kids about money. Monopoly is filling this gap nicely by introducing them to the world of mortgages, rent and the art of strategic (often punitive) negotiation.
I haven’t been actively withholding financial literacy from my children, per se. I just don’t feel an urgency to teach them about money. To me, it falls into the same category as ballet classes for toddlers; I don’t believe I’m dooming my daughter to a danceless life if she doesn’t enroll in “Tots n’ Tiaras.”
Most financial gurus, however, disagree with me. Dave Ramsey says that you should begin teaching kids about money — primarily by paying them for household chores — as early as preschool and “no later than 3rd grade.”
Suze Orman warns that if I give my kids a “no strings attached” allowance I will encourage them to be “entitled,” a term that has been search engine-optimized to get parents riled up.
But I’m not buying it. My kids are young (my oldest is going into the 4th grade) and I think, at least for for now, that the lessons they would learn from getting an allowance or being paid to do household chores are more damaging than the potential gains in financial literacy. Here are a few of those dangerous lessons:
Lesson 1: Spending money on stuff you don’t need is fun!
Because my kids are little, my husband and I provide for all of their needs. This means the only things my 7-year-old spends his money on are “wants.” Unfortunately these wants are mostly created from commercials and product placement. In short, junk. When he took his birthday money to the dollar store, he was determined to spend his money — on anything. All he’s learning is Consumerism 101: The important thing is not what you buy, it’s that you buy.
Yes, we have our kids separate what little money they get between saving, giving and spending, but the concept they absorb most clearly is spending. Even “saving” becomes “spending later!”
Lesson 2: Better work = better money.
LeBron James gets paid much more than your child’s teacher. Does this mean he does better work? Brad Pitt gets paid more than our local garbage man, but I can tell you whose absence I would feel more keenly. Maybe I have a personal issue with this because I don’t get paid for anything I do. Does this mean my work isn’t good?
Instead of setting up this simple formula, I prefer to teach my kids the true rewards for good work: pride, a sense of duty, a feeling of accomplishment. If you haven’t watched the TED-talk by Dan Pink, you should. He explains that the best motivation is intrinsic — the impulse that comes from inside. We do our best when we find a task challenging, or interesting, or because we want to be a part of something important. Letting a child work alongside you as you create your family life is a better motivation them sending them off to wash windows for a quarter.
For most of their lives, my kids are going to bombarded by external motivations: grades, trophies, honor rolls. I want them to first learn at home that we do things well because we want to do our best regardless of who is watching and rewarding.
Lesson 3: Money is a way to control people.
I know myself. I would be tempted to use money as a punishment. I can already hear myself saying, “If you don’t make your bed, that’s 25 cents off your allowance.” I don’t want our parent-child relationship to become a business relationship.
Because in the real world, you would not have to put up with a boss who says he will pay you, but if you’re naughty, he doesn’t. Instead, you would leave that job or you would be fired. I’m not taking applications for new kids.
I have no problem with my kids working for someone else. I gladly pay our neighbor’s kids to house-sit our cats and would welcome an opportunity for my kids to do a similar job. Because that’s what it is: a job. Our family life is not a job; it’s a workshop for building the kinds of people who will do hard work and make wise decisions, independent of the money involved.
I freely admit my financial parenting philosophy will evolve as my children grow older and their financial needs get increasingly complicated. For now, I’m going to enjoy this money-free zone for as long as possible.
Instead of teaching them with dollars and cents, I try to teach by example. When I make a grocery list, I talk about how I avoid impulse buying. I explain that we can’t buy a new car because we’re a single income family and the old car works fine. And before I buy something, I ask myself out loud, “Do I really need this or would my money be better spent somewhere else?”
I know my kids are listening, and, of course, amassing Monopoly money to test their own buying power.
QUESTION: What’s your philosophy on allowances? How do your children pay for what they need and want? What are the advantages and disadvantages of your current system?
CHALLENGE: If you’d like help figuring out a family economic system, check out our Work and Money Program.
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