Dear Mrs. Riches:
I come from a family where money was seldom discussed in a positive way, largely because of the fact that there was never enough. An education in money management in our house consisted of listening to my parents argue about bills. Now my husband and I have two young kids of our own. He says I spoil them by saying yes to whatever they want; I say that I'm eliminating their need to worry and teaching them to be more positive about household finances. So what do you think? What's the best way to help our children develop a healthy attitude about money?
-- The Yes-Mom
Like you, most parents have identified ways in which they want life to be better for their children than they, themselves, had it growing up. But in your case, the money "lessons" you are describing may not be better at all for your children, just different. To put it bluntly, would you rather have a fearful child or a spoiled one? Hopefully, the answer is neither.
Saying yes all the time is not equivalent to a positive education about money. It is an education, but one with potentially dreadful consequences -- raising children who have little appreciation for the value of money, a poor ability to delay gratification, a low tolerance for frustration, and a tendency to constantly have their hands out. While I will assume that you're avoiding arguing about bills in front of the kids (what you hated as a child), I would guess that your children are more aware of the tension in the household related to money than you think. For example, they're probably highly cognizant of the fact that if they ask Dad and he says no, they can ask Mom and get the answer they want to hear, leaving Dad undermined and fuming. Ultimately, when children can wield this much power over their parents, they're the ones who lose out.
You sound like a caring, concerned mom, and I'm sure that none of these lessons are what you would want for your children. So how do you get to a healthier place? Start yourself by recognizing that saying no is sometimes a loving and responsible act -- not the kind that gets you smiles and hugs and recognition, but the kind that provides important boundaries and helps your children learn to cope with real life. You and your husband also need to get back to co-parenting rather than compete-parenting. You may want to agree that for big issues related to money and the kids, you will automatically say, "Dad and I will discuss that and give you an answer later." Be prepared for them to test the security of the new system by trying the old runaround, but stay firm. No big decisions without the parenting team reaching a decision.
Those are aspects of the emotional context of your household, but just as important are the ways in which you prepare the kids for running their own household budget someday. Here are some suggestions along the practical lines:
1. Require your children to do chores for a reasonable allowance. Children as young as four or five can be expected to help set the table and put toys away. Your expectations will change as they get older, of course, but what won't change is the notion that everyone must contribute to the household and that earned money is the most satisfying kind.
2. Set up a savings account with some of the money your child has earned. Show your child how the money grows over time, take a special trip to the bank, and get them thinking that saving is cool.
3. Play store at home with play money. As you play customer, you can impart clever mini-lessons like, "No, thank you, Mrs. Shopkeeper. I'll skip the banana sandwich today. I'm saving up to buy a special doll." Or "The other grocery store in town is selling these lemons for much cheaper. I'm going to put these back."
4. Teach them to comparison-shop at the grocery store. As they learn to recognize numbers, ask questions like, "Which number is bigger? Two or three?" Make a game out of it so it's fun, as well as informative.
Want more practical tips on money management for kids? Try Raising Money Smart Kids: What They Need to Know and How to Tell Them by Janet Bodnar. For the older set, The Motley Fool's Investment Guide for Teens is a great choice.
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Fool contributor Elizabeth Brokamp is a licensed professional counselor who regularly talks money with her honey, Robert Brokamp, editor of The Motley Fool's Rule Your Retirement newsletter. To get your money and relationship questions answered, send her an email .