The Opposite of Spoiled

🔗Connect

🔼Topic:: Financial education 🔼Topic:: Education (MOC)

✒️ Note-Making

💡Clarify

🔈 Summary of main ideas

1. Make giving visible - to promote generosity, we need to act like it and show it. Let them know what you are donating to and why, give them a say in what to donate, even give to beggars, show them how it feels to be kind, ask them whether they have done sometime kind to someone today.
2. Have a spend, save, give budget - every gift or allowance they receive should be divided into spend, save, give buckets. This will teach them how to work with a budget, to prioritize between things, understand wants vs needs, and show them the importance of saving and giving your money
3. Don't tie chores with payment - doing chores is part of our responsibility as a family who live together, we don't want to commodify it using money, as if it's a job
4. Less is more - through gratitude, we need to show and teach our kids that being rich is more than just money, and far from having a lot of it. It's about connection, about choosing to use money for our welfare instead of as a status symbol.
5. Give context to spending - spending should be analyzed though a want-vs-need framework, and then through a usefulness/dollar ratio. This will teach them about scarcity and tradeoffs.
6. Be honest and open about money questions - kids ask money questions either from curiosity or the need for security, both we don't want to dismiss or ignore. We should welcome these questions, be honest and open with our answers, and never lie. Remember that what we don't tell them, they will either figure out or their own or will speculate. You want to control the narrative.

🗒️Relate

⛓ Life lessons, action items

1. Make savings visible - Find a way to visualize savings, while actually keeping them in the bank (with interest), best of both worlds. Perhaps use Monopoly money or something similar.
2. Concentrate gifts into one - instead of having everyone buy a gift, ask them to give money to a shared bucket (which is much more convenient ), and this sum can be used both for a meaningful giving, and for a huge gift.

🔍Critique

✅ by following this method, what will happen?

❌ the logical jumps, holes or simply cases where it is wrong...

🧱 Implementations and limitations of it are...

🗨️Review

💭 my opinions on the book, the writers style... The book is thin with content, mostly it's stories that iterates the same point

🖼️Outline

📒 Notes

Why We Need to Talk about Money

Nobody really speaks about money, we try to avoid having these conversations or ignore children's questions about it as if it is tabu. In some sense it really is, money is not just a technical tool for survival, it has become one of the most emotional objects in our lives. We judge ourselves and compare us to others based on this single detail alone, we feel ashamed to be earning less, or fearful when we have to struggle from paycheck to paycheck. Now more than ever, being savvy about finances is no longer a luxury but rather an essential tool of life.

We fear that talking about money with our kids will either hurt them or make them spoiled, but spoiled kids are usually caused by:

1. Lack of responsibility and chores in the household
2. Few rules or limits that govern their behavior
3. Family dedicating time and attention to them constantly
4. Having an abondance of material possession.

Money questions are inherently questions about our values too. Similarly, the traits we wish our kids have in order for them to be the opposite of spoiled, such as curious, generous, patient and perseverance are related to money and can be developed through money related interactions.

Why We Need to Talk About Money

• kids are not naturally spoiled; they’re born lovely and innocent. No, spoiling is something you do to them. (Location 346)
• Spoiled children tend to have four primary things in common, though they don’t all have to be present at once: They have few chores or other responsibilities, there aren’t many rules that govern their behavior or schedules, parents and others lavish them with time and assistance, and they have a lot of material possessions. (Location 351)
• every conversation about money is also about values. Allowance is also about patience. Giving is about generosity. Work is about perseverance. Negotiating their wants and needs and the difference between the two has a lot to do with thrift and prudence. (Location 398)
• there’s no shame in having more or having less, as long as you’re grateful for what you have, share it generously with others, and spend it wisely on the things that make you happiest. It’s true for our kids, but it’s true for us, too. (Location 402)

How to Start the Money Conversation

The default is silence about money issues, we avoid it because we are too ashamed, or thinking that our kids won't be able to process what we're saying, and it can only spiral from there. But worse than not saying anything is to lie to them.

We should welcome questions, praise them for it. Say things like "did you ask a good question today" to promote their Curiosity.

It's also important to understand why they ask these questions, is it pure curiosity, or a specific fear and they just want reassurance that we are doing okay, without a need for specifics.

Common questions and answers:

1. Are we poor - poor people aren't able to provide the basics of life, like a house, food and medicine. Since we have those, we are not poor
2. Are we going to have to move - some decisions are hard even if they are right. In the end this is the necessary thing for us to have a good and happy life, without financial troubles.
3. Are we rich - ask open ended questions: what do you qualify as rich? Is it only material possession? What about being close to friends, family, moments of joy, etc.
4. Why can't I buy this with my own money - it's okay for you to set limits, and for them to want to know the logic behind it. Just give the honest explanation and be firm
5. Why don't you work in a higher pay job - focus on the values that have led you to this career, why is that important to you, and how doing what's important to you is what matters
6. How much money do you make - instead of giving a number, help them understand how much things cost. Education, toys, vacation, bills, food. All the things that you pay for, and still manages to save or donate some of it. This will give a context to what you make without saying a number.

Remember that kids would most likely find the answer anyway, if not through you than through internet or rumors, which is much worse, so best to be open and responsive to them. Also remember that it's not likely that they will share the information with anyone, they just need assurance that they're okay, perhaps like their peers.

How to Start the Money Conversations

• “The hidden message of offering the truth to children is that you and your children can work together to manage difficult issues. Children also learn that if they ever need a straight story, they can count on you.” (Location 471)
• One way to make sure children know that questions are welcome is to praise their asking them so routinely that posing good ones becomes a habit. (Location 481)
• there is one answer that works best for any and every money question. The response is itself a question: Why do you ask? (Location 504)
• most kids, the younger ones especially, have no interest in the net worth number they may have been inquiring about. They probably don’t have much sense of what it means to be poor either, even if they voiced concern that your family is about to be. They just want reassurance that things are going to be OK—that (Location 521)
• kids just want to be like everyone else. Children of all ages generally don’t want their peers singling them out as having more or less than others, so they may try harder than you do to keep the information private. Few of them want to be the richest kid or the object of anyone’s pity. (Location 782)

The Allowance Debates

The worse thing we can do is to tie allowance to doing house chores. It turns those chores from something we do as a family, as an act of care and responsibility for being part of this house, to something we do just for money. it (Related :: commodifies and Crowding Out feelings of generosity with mathematical calculations.

If they refuse to do chores, there are other privileges we can take aside money.

However, we do wish for them to have an allowance, probably from age 5, so that they can practice Patience, and working with a budget. They become the masters of their own money. They should get enough to buy things, but not too much such that they could avoid making hard decisions (i.e buy it all). They will learn patience and prioritizing Triage and that money is related to Scarcity.

The allowance (or any money earned), should be divided into 3 categories:

1. Spend - on whatever they like, as long as it doesn't cross any moral limit. Let them make mistakes and ask them post purchase whether it was a good buy. As they spend, ask them whether it is a need (like food, education) or a want (like leisure)
2. Give - connect the concept of money with that of helping others, of generosity and Altruism. Let them choose what to donate to, and make it such that they will feel their contribution
3. Save - help them choose what are they saving for. Perhaps make it visual with an actual jar of money. Talk about saving for the short term because it's still a bit hard to grasp

For simplicity, you can divide it equally between the piles. Use a matching rule or "compound" interest to incentivize them to save more, and show the effects of saving.

Remember to Dont Jump to the Rescue, the essential point with allowances is to teach them how to work with a budget, so instead of letting them spend more than they have, or to buy for them, tell them that they'll have to wait, or "suffer" the consequences of taking a loan.

The Allowance Debates

• We should certainly do our part at home by making them do all kinds of chores. But they ought to do them for the same reason we do—because the chores need to be done, and not with the expectation of compensation. (Location 814)
• the primary virtue of receiving an allowance is learning patience. (Location 821)
• We want them to watch the money grow and strive for a goal, so they should have just enough to buy some of what they want but not so much that they don’t have to make plenty of tough choices. (Location 843)
• If parents don’t get paid for the regular work they do around the house, why should the kids? Chores are just something that everyone does to keep a household running. (Location 1091)

The Smartest way for Kids to Spend

When kids choose on what to spend their money, it's useful to teach them to think through "usefulness/dollar" ratio. Alternative cost. For example, how much fun would a get per dollar for a Lego, compared to a new shiny video game. Same for other purchases, such as buying clothes or going out to a restaurant.

Don't be ashamed to work with them on money saving techniques such as coupons, second-hand stores, etc.

Are We Raising Materialistic Kids

Materialistic people care more about possession than relationships. In order to avoid raising such people, we can:

1. Stay off commercial - especially young children are highly affected, it changes their priorities to consumerism, and causes them to judge other people by their wealth instead of character
2. Place limits - limit screen time to help the kids understand the importance of moderation, until they are able to delay gratification on their own. Limits

Other ideas:

1. Unified birthday present - instead of everyone buying a different present, they all contribute money to a single account, making it less of a hassle for them. The money would then be split into a donation, and one very large and interesting gift.

Are We Raising Materialistic Kids?

• Materialistic people focus more on stuff than they do on people and relationships. (Location 1411)

How to Talk about Giving

While it seems that even kids enjoy giving humans are good as default, it is a tendency we wish to nurture. To encourage giving, we should not only be a Role Models to them, but also talk and act publicly with our givings.

examples:

1. Daily kindness - everyone shares at dinner what kind act they have done that day.
2. Share in donations - let the child in on your donation strategy, debate on reasons and let the child have a say in who we are donating to
3. Small acts of giving - always have something on you to give to beggars you see on the street. Even if they don't spend it wisely, you are teaching your child generosity which is way more important. To reduce chances of misuse, you can have protein bars or other non-monetary gifts to give
4. Make results visible - make sure that the child will be able to see the results of their giving. This could be as simple as a "thank you" note, or perhaps share the news of the organization. Visibility

How to Talk About Giving

• if parents give, kids tend to as well. Most important, it helps if parents talk to their offspring about giving too. And (Location 1734)
• “If you want to feel rich, just count all the gifts you have that money can’t buy.” (Location 2024)

Why Kids Should Work

Kids will likely want to work at some point. This desire should not be discouraged, since having a work is great for a sense of independence, of competence, and mostly Grit. While it's natural to fear that it will hurt their education, remember that kids have a lot of free time, which could be spent more wisely.

Why Kids Should Work

• Making money makes children feel more grown-up and proves to the adults in their lives that they can do adultlike things at much younger ages than many modern parents realize. (Location 2135)

The Luckiest

It's not a shame to have a lot of money, or at least be an upper middle class. What we don't want is our children to become blind to the suffering around them, to treat what they have as given, and those who don't as inferior. One way around it is through Gratitude, to help them express what they are grateful in life, and how lucky they are to have it. Another way is through exposure, either through volunteering, "down to earth" summer camps, or vacations that include getting to know the local culture.

How much is Enough

Kids should learn that everything in life is about tradeoffs, since money and time is "scarce", we have to be mindful of our decisions with money. We should reflect on our own spendings as well, and encourage our kids to do the same.

How Much Is Enough?

• we want our kids to grow into young adults with perspective—people with a healthy definition of enough that is unique to them and isn’t based on what everyone else has or does. (Location 2883)