The Opposite of Spoiled

1. Start money conversations early and honestly

"Children have many places to pick up a good work ethic. Strict teachers, drill-sergeant coaches, and choral conductors will instill plenty of discipline."

Break the silence. Many parents avoid discussing money with their children, fearing it will make them materialistic or believing they're too young to understand. However, kids are naturally curious about money and form their own conclusions if not guided.

Be truthful and age-appropriate. When children ask about family finances, respond with "Why do you ask?" to understand their motivation. Then, provide honest, age-appropriate answers. Avoid lies like "We can't afford it" when you mean "We choose not to buy that." Instead, explain your values and decision-making process.

Address tough topics. Don't shy away from discussing income, job loss, or social class differences. These conversations help children develop financial literacy and empathy. Use real-world examples and your own experiences to illustrate concepts and values around money.

2. Implement a purposeful allowance system

"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."

Three-jar method. Divide allowance into three clear containers: Spend, Save, and Give. This introduces budgeting concepts and encourages thoughtful decision-making about money use.

Avoid tying to chores. Chores should be done as part of family responsibility, not for payment. This prevents children from refusing chores if they don't need money and teaches the value of contribution.

Increase with age. Start with 50 cents to $1 per week per year of age for children under 10, raising the amount annually. As children grow, involve them in deciding how to allocate their funds between the three jars.

3. Teach smart spending habits through experiences

"The Fun Ratio works particularly well for things we don't buy every day—the Wants more than the Needs."

Introduce the Fun Ratio. Teach children to estimate "hours of fun per dollar" for potential purchases. This encourages thoughtful consideration of value and longevity in spending decisions.

Practice real-world shopping. Take children to thrift stores, farmers markets, and local businesses to learn about comparison shopping, supporting the community, and finding good deals.

Create family spending rituals. Develop traditions like visiting independent record stores or local ice cream shops while traveling. These experiences teach children about mindful consumption and create lasting memories.

4. Address materialism and cultivate gratitude

"Materialism is correlated with higher levels of depression and anxiety and a range of ills from backaches to drug use."

Limit exposure to advertising. Reduce children's exposure to commercials and teach them to critically analyze marketing messages. Explain how ads are designed to create desires for things we may not need.

Practice gratitude. Implement daily or weekly gratitude rituals, such as sharing one thing you're thankful for at dinner. This helps children appreciate what they have rather than focusing on what they lack.

Encourage experiences over possessions. Prioritize family activities, trips, and learning opportunities over accumulating material goods. This shift in focus can lead to greater long-term happiness and satisfaction.

5. Encourage work ethic and entrepreneurship

"Kids like to work and enjoy earning money; we just don't do a good enough job of encouraging their industriousness and helping them find new ways to earn."

Start with household responsibilities. Assign age-appropriate chores and tasks to build a strong work ethic from an early age. Gradually increase responsibilities as children grow.

Support entrepreneurial ventures. Encourage children to identify problems and create solutions, whether it's a lemonade stand, dog-walking service, or creative project. Help them develop business plans and manage their earnings.

Facilitate part-time jobs. For teenagers, support their efforts to find part-time work. This provides real-world experience, teaches time management, and allows them to earn their own money.

6. Foster generosity and social awareness

"Every conversation about money is also about values. Allowance is also about patience. Giving is about generosity. Work is about perseverance."

Lead by example. Involve children in family giving decisions and explain your charitable choices. This demonstrates the importance of helping others and considering the broader community.

Hands-on giving experiences. Encourage children to donate a portion of their allowance or earnings to causes they care about. Take them to volunteer or deliver donations in person when possible.

Discuss social issues. Help children understand wealth disparities and social challenges in age-appropriate ways. This builds empathy and a sense of social responsibility.

7. Balance wants, needs, and the concept of "enough"

"How much is enough, and what should we trade off so that we have all the things we need and enough of what we want to make us as happy as possible?"

Distinguish wants from needs. Teach children to categorize expenses as wants or needs. This helps them prioritize spending and understand that not all desires are necessary or affordable.

Introduce the concept of trade-offs. Discuss how choosing one thing often means giving up another. This helps children understand opportunity costs and make more thoughtful decisions.

Define "enough" as a family. Have ongoing conversations about what constitutes a satisfying life. This helps children develop their own sense of contentment and resist constant pressure to acquire more.

Last updated: January 23, 2025