A friend recently confided that she thought it might be time to have The Talk with her six-year-old daughter.
But isn't six too young for that? Oh no, said my friend, Luella was definitely curious. Just the other day, in fact, she'd wandered into the kitchen and asked casually, "Mom, how many houses do we have?"
Her mother told the truth of course: One house. But given that many of her daughter's friends at an expensive private school had second and even third homes, she knew where the question was leading. And it could only mean one thing: She was going to have to talk to her daughter about money.
I'm not sure about you, but I would much rather have an in-depth conversation with my kids about hot sex than cold hard cash. I'd sooner take them to a matinee of Fifty Shades of Grey than explain the entries on my last tax return and how they will affect our ability to pay off the mortgage.
I've been squeamish about money-talk my whole life (as an Ontario-born WASP, it's in my DNA), but when it comes to my kids, I'm downright prudish. Living in a world of increasing inequality, in which lucky middle-class families such as ours are feeling squeezed, my instinct is to protect their financial innocence as long as possible. Ideally, I'd like my boys to be money virgins forever, living in a world where class-consciousness and financial worries simply don't exist. That's why I sign almost all their Christmas presents from "Santa." It's also why I never talk about the price of things or how the decisions we make as a family are based on money. I don't want them to know about how much of life boils down to crass economics. Not yet anyway.
Well it turns out I may be doing my kids a disservice by trying to protect them. So says Ron Lieber, New York Times columnist and author of The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money.
Lieber's book, which explains how to talk honestly about finances and in a way that makes sense to kids, has forced me to rethink how I was dealing with my kids' financial awareness.
"Parents are coming around to seeing the necessity of talking about money in the same way that parents realized a couple of generations ago the necessity of talking about the biological facts of life," he told me in an interview this week. "The reality is, our kids are going to be in trouble if they're not prepared for this stuff, and it's our job to educate them."
In his book, Lieber recommends that parents include their children in discussions about household finances and how money concerns might dictate, say, what car the family drives or where to eat out or go on holiday. He says kids deserve to know where their money is coming from – whether it's earned or inherited. He even says parents should tell their children what their salary is and how it compares with their peers.
I found his book very challenging – I actually had to lie down and breathe deeply several times while reading it – and not just because it flies in the face of everything I've been brought up to believe about money talk.
The other challenging thing about Lieber's book is the sheer amount of organization he recommends parents adopt in order to educate their kids financially. He cites, for instance, the family that instituted a "fun ratio" in which they itemized every toy in their kids' possession and calculated the hours of fun divided by the cost of the toy. This "fun ratio" was then used as a yardstick for future toy purchases, not unlike the "cost-per-wear" system many fashion fans use. And then he tells me about a couple in Boston who "every month sit down with their kids and have an American Express scavenger hunt, analyzing each purchase on the bill to see what they bought and whether it was actually worth it in hindsight."
I can barely bring myself to open my monthly bank statement, so I find it difficult to imagine holding a family meeting for the occasion. But as Lieber points out gently, "That's probably an issue you need to work on."
And of course he's right. The point is, our neuroses where money is concerned can easily filter down to our children if we're not careful – and avoiding the issue altogether isn't going to help. One thing I will definitely adopt from Lieber's book is his allowance system, which has kids divide their weekly dispensation into three jars – spending, saving and giving. The point, he explains, is not to give your kids money for nothing, but to "give them just enough that they have to make hard decisions."
That would make them warier of impulse purchases, help them decide what to save for and what charitable causes to support, and give them the backbone to delay gratification and to form strong values.
With a little help from Lieber, I'm going to have The Talk with my kids very soon. With any luck, they won't be spoiled by it. And hopefully I can do it without hyperventilating.