The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money

by Ron Lieber

Young adults need to know how to save at 22 and have the habits to follow through with it.

But kids are not naturally spoiled; they’re born lovely and innocent. No, spoiling is something you do to them.

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.

It doesn’t have to cost all that much to spoil a child, and three of the four factors in my definition of spoiled don’t cost a thing. Even that last one—the lavishing of possessions—can still be in play for kids who are far from rich, depending on how many relatives dote on a child. Parents of middle-and working-class kids have many of the same worries about materialism and entitlement, given that all kids are exposed to the same acquisitive culture.

In the course of my research, I visited Mormon families on dairy farms in Utah, shadowed ace recyclers who are children in a California junkyard, drank iced tea with wealthy families poolside in the Hamptons, met with immigrants on their coffee breaks who talk about money with their children every day, and hung out in the kitchens of private school parents who have trouble talking about money at all. I’ve been on field trips to pawn shops and payday lenders with working-class students in Ohio and sat in on workshops with New England teachers whose annual salaries are less than what some parents in their schools earn in a month. In Michigan, I even tracked down the young woman known locally as the Bloomfield Hillbilly, a kid whose family has much less than her neighbors in their wealthy suburb and is working furiously to make enough money to buy her own horse.

The foundation of the book is a detailed blueprint for the most successful ways to handle the basics: the tooth fairy, allowance, chores, charity, saving, birthdays, holidays, cell phones, checking accounts, clothing, cars, part-time jobs, and college.

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.

And why 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.

When I speak to parents of teenagers and college students, they often grow a little weepy describing the moment that their children stopped coming to them daily or even weekly for advice or to ask big, cosmic questions. I get sad talking to them about it too. Like many of you, I imagine, I love nothing more than the look in my child’s eyes when she’s puzzling through an everyday mystery that’s just out of her grasp and comes to me because she knows I’ll stop everything to answer her question. Providing an explanation seems not just an act of teaching but one of protection. I don’t ever want it to end.

“did you ask a good question today?” That difference—asking good questions—made me become a scientist.’”

In my years of research on the topic, I’ve determined that there is one answer that works best for any and every money question. The response is itself a question: Why do you ask? This response is useful for many reasons. The first is a practical one. By training myself to respond this way, I’ve guaranteed one thing for certain: that I will have at least 10 seconds to think through potential responses, depending on the reason for the question. Yes, it’s a stalling tactic. But be careful. There is a right way and a wrong way to question the question, given how vulnerable kids are to the belief that certain topics are off-limits. So I always try to say “why do you ask?” in the most encouraging tone possible. If your tone sounds suspicious, like an accusation or an expression of disapproval, it may shut down the whole conversation.

People who are poor don’t have everything they need, like food and clothing and medicine. We have those things, so we’re not poor.

When parents tie allowance to the completion of chores, they make work the primary focus, not money.

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. If they do them poorly, there are plenty of valuable privileges we can take away, aside from withholding money. So allowance ought to stand on its own, not as a wage but as a teaching tool that gets sharper and more potent over a decade or so of annual raises and increasing responsibility.

the primary virtue of receiving an allowance is learning patience.

Figuring out how to delay gratification is a key part of handling money well,

But collecting a big enough pile of money to do or buy fun things still requires some waiting when you’re a child who is too young to have a credit card. And the patience this requires is associated with many good financial outcomes for adults.

We parents are in the adult-making business after all, and we should do everything possible not to squander the opportunity to build grown-up humans with 15 or 20 years of experience handling money.

With children under 10, 50 cents to $1 a week per year of age is a good place to start, with a raise each year on their birthdays. 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.

Once you have an amount, you’ll need a system for tracking and storing the money. In my family, we divide the allowance into three clear plastic containers: one each for spending, giving, and saving. This is, in effect, a first budget. Splitting the money introduces them to the idea that some money is for spending soon, some we give to people who may need it more than we do, and some is to keep for when we need or want something later.

The Spend container holds money for occasional impulse purchases. If our daughter gets the urge for something small when we’re out and about, we front her the money until we can get home and take it out of the Spend container. We don’t have many rules for this money and consider it a kind of mad science experiment. It’s fascinating to see what moves kids to want to buy something once the money is actually their own. They often want random junk, but this is part of the process of letting them practice. After all, how can we teach them to control their impulses until we observe them under real-world conditions with actual green cash?

She also outgrew the pricey jeans she had bought early in the year, and her parents declined to bail her out when her budget didn’t allow for any new ones. Most kids will mess this sort of thing up, sometimes spectacularly, but they learn very quickly. That’s doubly true if you let them keep any money they have left in the clothing budget at the end of the year, or roll it over into the following year’s budget.

The real surprise for the Hollands was how quickly their daughter became savvy. “She has become an excellent shopper, thinking through what she needs, watching for sales, and earning extra money for what she wants that her budget doesn’t cover,”

“My recommendation would be that if a child is asking for responsibility around money, give it to them.”

For instance, if the parents choose to take the family out for dinner, it might be up the kids to pay for beverages they want other than water. With this system, kids often get more dollars each week so that they can afford at least some of the things they want. This may sound harsh or cheap, but it all depends on the size of the allowance. What it actually does is give kids a lot more power and control and presents many more opportunities to learn.

Kids need a basic cell phone, but smartphones are a want.

But what happens if they decide they don’t want or need the money? Chances are, we’ll make them do the chores anyway. So why pay for them in the first place if these chores are ultimately mandatory in any event? There are plenty of other privileges we can withhold if kids aren’t getting their chores done in a timely fashion. (Driving that new car, for instance.) Taking away money, which is a tool for learning, need not be one of them.

One of my favorite ways to set family values into place is to build rituals around certain kinds of spending.

Every so often, it’s useful to introduce the idea of organized restraint.

But the question of what kind of parent Bramson was going to be is just an outsize version of the one that many parents face: How do we strike the right balance between modesty, which in this context is all about restraint, and materialism?

Allison J. Pugh, now a sociology professor at the University of Virginia, spent a couple of years following both affluent and struggling families around Oakland, California, and described them in a book called Longing and Belonging. What she determined is that our children are constantly navigating something she refers to as an “economy of dignity.” In doing so, their feelings of self-worth often rise or fall depending on constantly shifting standards around the possessions and experiences that matter in their own little worlds. Pugh, who saw these economies playing out in both poor and affluent communities, starkly describes the feelings that many children experience when they don’t have a Game Boy or haven’t been to the vacation destinations that most of the other kids are talking about. For kids with nothing to contribute and no bragging rights, it’s akin to “a sort of unwelcome invisibility.”

That full kit of toys and clothes and gear and enrichment does not make every kid into an overindulged problem child. So how do you know one when you see one—or are in danger of accidentally raising one? Social scientists have spent decades weighing in on this: Materialistic people focus more on stuff than they do on people and relationships. (On a playdate, this looks like a persistent inability to share the object of greatest desire in the room.) They genuinely believe that more stuff will make them happy. (Whining and begging unrelentingly even after they’re out of preschool and ought to be able to accept no for an answer.) They care less about the utility of their stuff and more about what sort of reaction people will have to it. (Bragging after parents capitulate in the face of their begging.) They want too much of the wrong things, or they want their things in the wrong way. (More things than they need without having to pay for them with allowance money or to wait for them.) And the fallout is unpleasant in countries all over the world; multiple studies have shown that materialism is correlated with higher levels of depression and anxiety and a range of ills from backaches to drug use.

We want to deploy whatever tactics we can to keep kids from becoming materialistic, so let’s call out one obvious bogeyman: Children who watch lots of television commercials are clearly vulnerable.

One of the most eye-opening studies in this realm involved a bunch of 4-and 5-year-olds who watched a commercial for something called the Ruckus Rangers, while the control group did not. Of those who didn’t see the commercial, 70 percent wanted to play in a sandbox with friends instead of playing with the toy, while only 36 percent of the kids who saw the commercial chose friends over the Rangers. Then came the follow-up: Given the choice between playing with a nice boy who didn’t have any Ruckus Rangers and a not-so-nice boy who did, just 35 percent of the kids who had seen the commercial chose to hang out with the nice boy with no toy. When researchers asked the same question the next day, it had gone up but only to 49 percent. The commercials actually seem to have caused the kids to value getting their hands on the toy over the virtues of their playmate. As for the kids who hadn’t seen the commercial, 70 percent chose the nice boy to play with.

But remember, it’s their job to ask questions, even presumptuous ones rooted in outsize expectations. Most of us will eventually be in the position where they’ll ask us to explain our own large purchases or extravagances.

When we see them appearing literally to ache for things that other kids have or do, however, it often calls to mind our own feelings of childhood longing. And satisfying our kids’ desire for dignity and a sense of inclusion in the present can make us feel like good parents, and signal to ourselves and the world that we are doing just fine. Dignity, it turns out, involves intense feelings for both parents and kids. So in practice, the quest for dignity usually involves kids nagging parents, offering questionable data about who has or does what, and in what quantity. But sometimes, the desire to do what everyone else does—and to provide what everyone else provides—is a parental affliction alone.

Our temptation to indulge or loosen the rules is also an opportunity to rethink the role of peer pressure, a phrase that many of us use without realizing it usually doesn’t begin with children. If kids lose face because others have toys or experiences that they do not, it’s only because their friends’ parents let them have that stuff and do those things in the first place. The same is true with late curfews or the freedom to go anywhere after school. Or being allowed to forgo chores or avoid other contributions to the family.

The family prioritizes spending on travel and other experiences over the kinds of possessions that people might notice.

Until the boys were about 10, they could watch half an hour of television each day, as long as it was commercial-free, but the parents didn’t keep a stopwatch running and movie-viewing didn’t necessarily count against the next days’ allotment of screen time. The rules went out the window when the family was staying at a hotel, however, and the boys’ grandparents blew the rules off entirely, as grandparents often do. The boys eventually lobbied successfully for an increase to 45 minutes when they started playing video games, albeit ones prescreened by their parents.

The idea was that it was probably best for the boys to learn to regulate themselves while still under their parents’ watchful eyes and that these self-regulatory skills would help them with budgeting of all sorts, including money.

Kasser would make up absurd fake dialogue that made fun of whatever the ad was trying to sell, and eventually the kids started doing it too. “My kids are going to be exposed to this stuff,” he said. “So they need to know how to interact with it, and I tried to give them a different attitude about it.”

“If my kids want to choose a career that is relatively ambitious in terms of the amount of work it will take and money they will make, well, it’s not my life. You’re there to love them and help pick up the pieces afterward if you need to.”

So when the first kid lost her first tooth, she was given a book called Throw Your Tooth on the Roof, which is about lost tooth traditions in other countries. Feiler and his wife also vowed to hand over coins in other currencies for each tooth, just to reinforce the idea of imagining life in other places.

Meanwhile, our friends Pam Briskman and Randy Weiner, lifelong educators and entrepreneurs, give out teeth from different animals when their daughters lose their own. So far, the lineup has included shark, coyote, lion, sheep, alligator, and rattlesnake—usually in glass jars filled with pink-colored water and glitter. The prize is accompanied by a note written backward so they have to hold it up to a mirror to read it, and it gives clues as to which animal the tooth once belonged to. They buy the teeth from a store in Albany, California, called the Bone Room. (It takes phone orders, in case you want to swipe the idea.) This is a template for parental modesty—and parental awesomeness—that you can call on for birthday parties and vacations and any number of other situations where spending more money seems like the easiest way to keep your kids from feeling excluded from the conversation.

As Weiner explained when describing the tooth fairy approach in his family, it’s not the thing itself—the animal teeth—that’s important. Instead, it’s the values and intentions behind the thing. Their message is that they honor the rituals that their daughters hear about in school. But rather than doing it like everyone else, they’re going to come up with...

kids who had received the interventions showed better self-esteem than they had before the sessions started. The control group of materialistic kids who had not gone to the sessions showed decreased self-esteem. What is noteworthy here is not simply that the impact was lasting; it’s that a program based on values and the emotions around money resonated with the older children especially. Detailed conversations and reflection seemed to make a real difference. Now, imagine all of us using this approach on an ongoing basis at home, and starting earlier.

Often, people who grow up in an environment that makes them feel insecure tend to default toward materialistic values.

I call it Dewey’s rule, and it stands for the idea that parents should try to arrange things so that, on average, their children end up in the 30th percentile of stuff. If 10 kids in a community are eventually going to get a car, then your child should have the 7th nicest out of 10. Or if your children are in the 50th percentile on cars, then perhaps they should be 9th out of every 10 to get a smartphone. It’s just a rough average to shoot for, not a hard-and-fast every-time law. And different parents may find themselves in special circumstances or may not have enough willpower to wait beyond, say, the 50th percentile. But kids should learn to wait for at least some things, to consider carefully the things they crave, and savor them once they arrive. Maybe it’s fine to be a little jealous, while not feeling utterly deprived.

Also, quite often, the thing that everyone thinks everyone else is going to want ends up being useless, or the kids who are the first-movers move on to something else by the time the 4th child out of 10 gets ready to mimic that first one. The child who is 5th or 7th, then, doesn’t waste any money.

“For several nights a week during the season, it’s me and my daughter and the other girls from her team on the ice,” he said. “We pay for the whole season. We’re together, having a great time. That’s the spoiling. I like to think that she’s thinking she’s spoiled by how much time she gets with her family.”