Raise Children Who Are Not Spoiled for Money Lessons in Limiting Costs
We teach kids about money because we want them to grow up to be financially responsible and smart adults. Forbes notes that there is another big benefit: keeping kids from spoiling.
Writer Ron Lieber tells Forbes that money can teach all kinds of behavior that is the opposite of tainted behavior, including generosity, curiosity, patience, and perseverance. Among the few lessons on money that this article recommends, I especially liked this one: Draw a fine line between wants and needs:
Lieber suggests creating a Desire / Need continuum on paper using horizontal lines with Needs on the left and Desires on the right. For example, rubber boots may be needed, he said, but “rubber doesn’t get better when the price quadruples.” So he puts the $ 25 boots on the need, and the $ 100 boots on the need. Then, for each of them, draw a vertical line along that continuum. To the left of this line is what you are willing to pay for the child’s needs, and to the right is what you are not willing to pay.
In his family, Lieber advocates for what he calls the “end line of land” on the premise that he believes an average-price, but quality seller will charge for the product. If his daughter wants anything for a price higher than the equivalent in Lands End, it will be a desire, and she will have to pay for the difference with her own money.
The most important is to have this kind of discussion in which you explain that you don’t want to pay more than X dollars for one thing, because you would rather spend that money on something else.
We’ve already talked about the wants versus needs game , but this goes a step further by setting a spending cap to decide which column a potential purchase should fall into.
The Hours of Entertainment Per Dollar Test is also an interesting study guide.
How Not to Raise Spoiled Children: 7 Important Lessons About Money | Forbes