Teaching Kids the Value of Money

While I understand that American kids today can be spoiled (there’s proof of that here), I’m not on board with the very popular “These kids today! We’re creating a nation of adult-escents!” meme.

Actually, this idea is only the latest in a series of “Let’s make parents feel crappy about themselves” memes that probably stretches back to the cave days. (“Kids today! They don’t even know how to do a decent cave-painting, and they all expect to get their own wheel handed to them for their Sweet Six.”)Teaching kids about money is hard–we should cut ourselves some slack.

The hardest part, I think, is imbuing kids with a sense of how much stuff actually costs, and I’ve caught myself saying things to my daughter like, “Don’t drag your shoes like that, you’ll wear them out!” all while wondering which ancestor seized my soul to speak through me.

For me, every time I’m confronted with a financial situation involving my kids, I’m immediately transported back to my childhood …

What I Was Taught

My parents were very cheap — er, I guess we say frugal now. The thermostat was kept at bone-chilling temperatures, we drove our green Ford Fairlaine until it (literally) burst into flames at a toll booth, and I wore a never-ending supply of hand-me-downs from a cousin named Amy whom I had never met.

It sounds really pouty of me to complain about this, since this is how they sent me to a top-tier, very-expensive college, yet I still brattily mourn the fact that when my ballet teacher said it was time to move up to two classes per week, my mom’s answer was a flat, “We can’t afford it.”I didn’t react well to my parents’ austerity measures.

Being told I couldn’t have things that my classmates got–even the ones who, as adults, admit their own shame at their families’ stressful financial problems–was like being put on a diet, and I rebelled by spending every penny that came my way in the stupidest way possible.This continued after I started making my own money–it was the whole point of making my own money.

It was as if by buying the Kate Spade bag and getting the constant-upkeep haircut, I was broadcasting to anyone interested (and nobody was, really) that I could run with the cool kids after all.

How I’m Teaching My Daughter Differently

Now that I’m a mom, of course I want to teach my kids a better sense of responsibility than I learned. Somehow, despite my parents’ best intentions, I never understood why we “couldn’t afford” things when I could see perfectly well that we were in better financial straits than, say, the kids who got subsidized lunches.We could literally afford it.

I’ve learned from my childhood experiences though, and here are the four spending words I try to never, ever say to my own children–lest they grow up feeling the same way about money that I did.

Penny’s so little here, 21 months. These were from my “bump photos” when I was pregnant with Abby.

1. Afford: As in “We Can’t Afford It”

I tend to avoid the “A” word when telling Penny why we aren’t buying the unicorn-shaped Dreamlight as advertised on Sprout. (Thanks a crap-ton, Sprout.) I instinctively replace, “we can’t afford it” with, “that’s not how we’re spending our money right now,” and if that leads to a larger discussion of why we save money and what we’re saving it for, that’s all the better.

I didn’t know if this was just me being neurotic, so I checked with Alisa Weinstein, author of “Earn It, Learn It: Teach Your Child the Value of Money, Work, and Time Well Spent” and creator of the Earn My Keep program (and my latest girl crush) to see if I was just nuts or nuts with a purpose.

She chose option B.“I say, ‘We don’t choose to spend our money in that way,’” Weinstein said. “The word ‘choose’ is huge; it acknowledges the emotion and effort that goes into deciding how to manage money.”

2 and 3. Good and Bad: As in “Good” and “Bad” Spending

Two more buzzwords I try to avoid are “good” and “bad” spending. The same way we try to avoid thinking of foods as “good” or “bad”–because the minute something is labeled bad, it becomes forbidden fruit, both desirable and shameful–financial choices are also neither black-and-white, positive-and-negative.

Kids are so literal, Weinstein says, they can get stuck on things being “bad” or “good,” and see a one-time splurge as a betrayal of high moral ideals. She recommends “responsible” instead, because spending is not a static, never-changing state. “What was a perfectly responsible decision to spend on nine years ago, before I had kids, isn’t necessarily such a ‘good’ choice now,” she says. “Naming a decision ‘responsible’ ties it in to your ever-evolving status.”

4. Mistake: As in “That Purchase Was a Mistake”

Weinstein never calls a failed purchase a “mistake.” We don’t want to leave kids feeling dumb, failed or stupid. “When your kid skins her knee after ignoring your warning not to climb on something, you’re never supposed to say ‘I told you so’ in that moment,” she points out. (Oops.) “While they’re hurting, you want to be there with her, and later, when she’s calm, you point out that you wish she would trust you more.”

The same goes with a financial error. “It’s so lame to call these things a ‘learning experience,’ but that’s just what they are,” Weinstein says. “You can empathize with them, say, ‘It really stinks, but what a great lesson you’ve learned.

Now you know not to do that next time. Do you know how long it took me to learn that?’”Whatever words you choose, the most important thing is that you talk. Weinstein herself is a hard-liner. She doesn’t give her kids prizes just for sitting in the cart at Target, and she denies herself the joy of seeing her kids’ eyes light up the times she does get them a treat. “The treat is temporary,” she says. “Teaching them financial knowledge is a tool for the future.”