Should you tell your kids how much you make? Should you let them have a smartphone? Should you ask them to pay for college, to work, or to make charitable donations? What should you do if the other families in your kid’s school spend vastly more on birthday parties, summer camps, and holiday gifts than you do?
Those are the kinds of questions that parents confront daily, and ones that the New York Times’ Ron Lieber wants to help answer in his new book, The Opposite of Spoiled. It’s a sensible guide to teaching kids about money, with just talking about finances, social class, wants, and needs as the big, tough first step. Lieber talked with Daily Intelligencer about raising a not-spoiled kid in New York, and a lightly edited and condensed version of the conversation follows.
New York is this amazing hothouse, where the differences between the haves and the have-nots are so great, and so apparent, and where things are so frighteningly expensive. How do you talk to kids about money in that kind of environment?
For parents of younger kids, I tell them, “Don’t think for a moment that your children aren’t thinking about money and class.” Kids have a keen and almost innate understanding of social class, as early as 3 or 4 years old. They can look at pictures of different kinds of kids, and they’ll sense which ones are rich and which ones have less. And when you ask them whom they want to play with, they’ll say the rich ones.
Parents will say, “I just want to protect my kids. I don’t want them to think about money. I don’t want them to size people up, or size me up, or make judgments! I don’t want them learning to judge people on the basis of what they have.” But we can’t stop them from doing it — we’re biologically primed for social comparison. It’s how the apes decided whom to mate with in the wild, and it’s going to happen whether you like it or not. And this isn’t just a private-school thing.
I just heard about an overcrowded public school in Brooklyn that shall remain nameless. They got overcrowded enough that they started to let kids out into the community for lunch. And a class system has developed around who still brings their lunch, who can afford to go out, and if you can afford to go out, what kids go what places. That’s the stuff going on at a lower grade level. But at higher grade levels, that’s where you start to see kids getting smartphones.
Ah, social media.
Social media. I stopped laughing about the number of New York City parents who have said to me, “If another picture shows up on my kids’ Instagram feed of a 12- or 14- or 15-year old traveling on a private jet, I’m going to take the phone and throw it off the Empire State Building.” I don’t know who these parents are who are allowing their kids to post these “wealfies.” That’s the term The Observer coined, like selfie, but wealfie. There’s the whole Rich Kids of Instagram business, which might or might not be self-parody. But one way or another, some of these photos are real.
How do you talk to a kid about reality vs. social media in that kind of environment?
In social media, we’re always presenting a version of ourselves — maybe the best version of ourselves. Maybe we don’t mean to brag. Maybe we think we’re just among friends. Maybe we really want to tell people where we are and what we’re doing! But everybody is posting their own awesome: The awesome places they get to go. The awesome things they get to do. On the other end, kids are looking at things they aren’t invited to and that they can’t afford to do. It’s a big display saying, “You’re not part of my awesome.” That’s how Instagram becomes an amazing engine of envy. Kids can’t break it down.
That’s not a screed against Instagram, or against going on vacation and posting your photos. But it’s a lesson for parents: You need to look over your kids’ shoulders. You need to look at the accounts they’re following. You need to talk about this, about how social media is about talking about how great things are, but how that’s not the full picture of what’s happening.
Another problem your book addresses is almost the opposite — the common, really well-intentioned but often totally ineffective efforts parents make to expose kids to people with less than they have.
This was one of the hardest things to get right in the book. We all want kids to understand that there are people who have more and people who have less, and what it’s like to walk in someone else’s shoes. But less-than-average in Short Hills, New Jersey, is different than less-than-average in New York City. You live in the world you live in. That’s where it starts.
The fact of the matter is that for better or worse, most people do not live in mixed social-class communities. They might think they do — we define middle class depending on whether we feel average for our community, even if that’s Greenwich. But there aren’t that many mixed-class communities. And a lot of parents pat themselves on the back for sending their kids to public school, but a lot of New York’s public schools are really private-public. You need a seven-figure income to live there and go there — sometimes there’s more economic diversity in private schools than public schools.
But we want our kids to see that there are other ways of living and doing things, and that nobody has a monopoly on a good time. But you don’t want to be a voyeur about it. You don’t want to be pitying people with less or scheming to get in with people who have more. That’s the adult perspective.
With kids, it’s about figuring out how to have real relationships, how to forge a real relationship. And the problem with community-service trips is that they aren’t real relationships. It’s drive-by service. It can be of real value, to the organization and to the kids, to do that work and have that work done. But we still need those real relationships.
And it’s not an obligation, but there are plenty of ways to do it! Get your kids in an all-county chorus, rather than the school orchestra. Enroll them in a theater program that draws from the whole city. Enter the little league one neighborhood over, even if it’s four subways stops away, rather than three blocks. Join a different house of worship. You’ll get to see a different community, and you won’t be able to help but to develop relationships with different people.
Give me the capsule argument for why you should be transparent with your kids about money and what’s going on in the family finances in the first place.
There’s a logical case for it and a practical-reality case for it.
The logical case goes like this: Kids are intensely curious about money, and it is a source of great mystery and power for them. It’s our job to teach them things, and to mint adults during the 18 or 22 or 28 years that they are under our roof. It’s our job to answer their questions honestly in a way that’s age appropriate. I don’t think it’s different from talking about sex or work or any other crucial topic. But that doesn’t mean telling them the truth about everything that they ask.
And this is crucial: This whole question of when and whether we tell everything to our kids is very much a privileged question. If you have more than average, then maybe you have a choice about whether to talk with your kids about money, because you’re probably not pressed in your finances every day. If you have less than average — I didn’t write the book for those parents, but half of the families in America and New York fall into this situation — worrying about money is a daily reality. The kids are worried about it, too, trying to make the pieces of the budget fit together. I never want to fail to acknowledge those families.
For the practical-reality case, with younger kids, when they have a question, sometimes a parent’s response will be, “That’s none of your business!” But that’s dangerous and it’s factually inaccurate. Everybody in the household — everybody in the world — is part of a family business, whether you’re an employee or a boss. And more cosmically, when you respond that way, what you’re saying to your child is, “I’m not your primary source for information with a lot of importance and value. If you come to me with a crucial question, I’m going to shut you down.”
But, as you said, that doesn’t mean telling your kids everything right at the outset …
On the topic of readiness, you can start when they’re 3 or 4 years old, giving an allowance of a few dollars a week — whatever the number is. You can start introducing them to components of household budget.
Kids these days — they’re going to Google your address. They’re going to figure out what your home is worth, if you own it. But they don’t see you borrowing to pay for it, and they don’t understand you’ll be paying for it for 30 years. They don’t understand that there are a lot of other payments beyond that.
And there are a lot of ways to do it …
I heard from an incredible family that does an American Express scavenger hunt every month.
The mother is an accountant, so they keep all their receipts. When the AmEx bill comes, the kids — they aren’t that old, they’re 9 and 11, I think — they reconcile the receipts with every item on the bill. Then it’s open season, like an Ask-Me-Anything about the bills. Then, they have a real conversation about, “Gosh, do we even remember what we ate that night when we spent $72 at P.F. Chang’s?”
If the money you spent on discretionary purchases didn’t mint any memories that make you smile, maybe it wasn’t worth doing in the first place!
I like the idea that it’s a ritual.
I talk a lot about family money rituals, and people think it’s weird, like you’re going to dance around a bonfire or create a money-god statue and bow down to it. But what we’re talking about is spending, saving, and creating habits so that a family can do things together to reinforce good values.