Scam-proof your kids while teaching compassion, the ‘fun ratio,’ and other tips from ‘The Opposite of Spoiled’

opposite of spoiledRon Lieber has spent the past seven years penning some of the smartest consumer stories you can read at The New York Times in his Your Money column.   The last time you saw him, perhaps he was (politely) arguing with Suze Orman’s about her personal-branded prepaid debit card (he won), or asking just the right questions about Tony Robins’ new, amateurish best-selling book on personal finance (perhaps too politely).

Now, he’s written one of the smartest parenting books you can find, The Opposite of Spoiled, by taking on a topic hardly anyone talks about: kids and money.  By starting the uncomfortable conversations, Ron reveals what a wonderful teaching tool money can be, a tangible way to instruct virtues like saving, charity, and sensible spending.  Full of practical, battle-tested suggestions (Ron has a six year old daughter), you’ll find the book both a fun read and a great reference tool you’ll want to have on the shelf near the piggy bank and the TV remote.  As a bonus, you’ll finish the book with new insights in how money impacts your family, and your own feelings about the future.

Ron is also a friend — the personal finance writer circles are relatively small — so you can take my lavish praise with the appropriate grain of salt.  Go ahead and read all the other praise the book is getting if you prefer.  Or wait until you hear Ron speak on a talk show near you. The book is an overnight sensation, and if this is the first time you are hearing about it, it won’t be the last.

The book officially publishes today, and I luckily got Ron to sit at a computer long enough for a little dialog about money, kids, and my favorite topic — fighting off scams and getting a fair deal.  Today, I’m publishing the first part of our chat. Look for the rest later this week.

Q. It’s great to teach kids to be thoughtful and generous with money. How do you suggest parents teach them to be careful with it — as in, to be careful about a world full of charlatans, snake-oil sales folks, or used-car sales types who will try to separate them from their money?  And how do you teach healthy skepticism with instilling unhealthy cynicism?

A. My favorite way to do this is with something I call the fun ratio. It’s a math lesson and consumer protection tool all rolled into one, and it came from an Ohio family that I interviewed.

The big idea is to try to put it to work before you buy. With toys, the question is how many hours of fun do you think you’ll get out of this? And how many dollars does it cost? You do the division and you get a ratio, which you can then compare to other things. It’s good to do this with toys when you’re about to give them away too. If the ratio is poor, that’s a good lesson.

As kids get older and can understand credit card statements, it’s interesting to look at those too when it comes to evaluating experiences. Do we remember anything we ate at that restaurant? If not, then the pleasure per dollar must not have been very high. You can treat vacations (and the money you spend on them for excursions or activities) the same way.

Kids will also learn a lot just by osmosis. Bring them along to the car dealer for haggling. Let them listen in or read over your shoulder as you attempt to solve a problem with a service company. I don’t want my daughter to enter every transaction with a chip on her shoulder, but I do want her to know how to assert herself during the transaction (or afterwards) if she needs to. 

Q. As a related question, how do you suggest parents talk to kids about the confusing world of charity scams, or mismanaged charities: The idea that, even if your heart is in the right place, giving money to some folks doesn’t always have the intended effect? 

With younger kids, up to age 7 or so, I think we should give something to every homeless person who asks if the kids are nearby. It models compassion. After that, they’re old enough to understand that giving money may not always help and could in fact make things worse. But you can give something. I profiled one family in the book that makes bags of food and other things that homeless people might need or find useful and hands them out when people approach them as their car is stopped at red lights in Oakland.

Another family I spoke to adopted a good rule for charities after a few years of giving had gone by. They were frustrated by all of the marketing messages and plush toys that various animal organizations were sending out. So they told their kids that all future donations had to go to charities that helped people. Not only did the parade of stuffed leopards cease, but the kids had to really engage with the idea that there were other humans in need, and not just cute animals.

Part 2 of this interview coming soon. Read more about Ron at his website.


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About Bob Sullivan 1334 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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