The Opposite of Spoiled Book Review: Kids and Money

spoiled160Here’s my one-sentence review of the book The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money by Ron Lieber. If you have kids and feel it is important to teach them about money, then you need to read this book. Why? Simply put, money is still taboo and I don’t know of any other well-organized discussion of the topic. Your school won’t probably won’t teach them. Consider the point of view of teachers addressing why some families make less money while and others make significantly more:

If teachers answer them by talking about government and taxes and policy, the responses can start to sound political (and boring). If they respond by addressing individual behavior and ambition, the answers start to seem like moral judgments.

Other parents feel sensitive about it themselves. This is what Lieber himself was told when he was asked to talk about money at a private school:

[…] could I please keep in mind that some of the families with more money than average were starting to feel demonized and those with less were feeling like their noses were being rubbed in everyone else’s affluence?

I know there are textbooks and stuff related to “financial literacy education” out there, but studies have shown that financial literacy classes don’t work.

The book is basically an attempt to compile the best practices for parents in the areas of allowances, chore-setting, cell phones, clothing, cars, part-time jobs, and paying for college, along with teaching the skills of saving, investing, and charitable giving. I may not necessarily agree with every idea in the book, but at least it allows provides good exploration of these topics and may uncover small things you might not have considered.

As you may have guessed from the book cover image, one recommendation for giving allowances is to split it up into three jars: savings, giving, and spending. As I wrote about in my teaching money skills without money post, these three jars each have a special purpose:

  • forced saving jar = patience, delayed gratification
  • forced giving jar = generosity and empathy, responsibility to help community and others
  • forced spending jar = trade-offs and thrift

Throughout the book, I definitely felt that the content was aimed at relatively wealthy parents and thus their relatively wealthy kids. Lieber recognizes this:

We may not be in the same category of wealth, but many of us have enough to give our kids everything they need and much of what they want. And even if we have less than many people we know in our communities, we have more than most in our country and our world. We know this, but our kids probably don’t quite yet. So how do we make them aware of just how good they have it, without preaching to them or making them pity others who have less? And how do we remove them from their life of relative ease every so often and expose them to people and places that are not like the ones in their everyday lives?

I guess kids just don’t do much these days besides try to get into college and travel on sports teams:

The Stanford expert on adolescence, William Damon, writes matter-of-factly of the many children “who have privileges that were once reserved for royalty.” […] So start the job in the home, where we can help our kids act on […] a drive for competence. “They avidly seek real responsibility and are gratified when adults give it to them,” he wrote in Greater Expectations, his book about how far our expectations for our children have sunk in recent decades. Indeed, in many urban and suburban families, the chores that we assign them don’t add up to much.

Getting our own children to do more, and earlier, in the way of preparing, cooking, and cleaning up after meals isn’t easy. It takes practice and persistence, in the same way we may need to hover over them during the first months of music lessons as they whine and complain when things don’t come out quite right. Still, failure should not be an option. Every child is capable of contributing to meals in a significant way, and we shouldn’t need to pay them to set the table, boil the pasta, or clean it up. It’s not as if we lack leverage: We control dessert, first and foremost. But playdates, screen time, and car privileges are all tools we can use if our kids need more than a gentle nudge to finish their regular work around the house and in the kitchen.

I’m making the case for a broad-based “Lands’ End Line.” If we adopt it, that means we’d pay whatever Lands’ End (my definition of a suitably mid-priced merchant that sells quality clothing) would charge for any clothing needs, even if an item comes from some other designer or shop. Anything with a price to the right of the Lands’ End Line would be a want. And if our daughter craved that item, she could pay, out of her Spend or Save containers, the difference between its price and the price of a similar item at Lands’ End.

Yikes, I think Land’s End stuff is pretty darn nice. That would mean my allowance-receiving kid is going to use her extra money to buy North Face or Patagonia stuff. We’ve been trying to buy most of our clothes second-hand up until now… I wonder how long that will last.

In any case, I liked the book and will refer back to it for various ways to financially educate my kids. Teaching them good core value and character traits are more important than 401k matches, Roth IRA contribution limits, or finding the lowest mortgage rate. I really hope they can learn that money isn’t everything:

If you want to feel rich, just count all the gifts you have that money can’t buy.

But money and stuff aren’t the only ways to define rich. Ask kids if they have any other ideas for what the word means to them, or try some prompts if they’re not sure. Perfect health? Living grandparents? Tons of cousins? Friends within walking distance? An amazing park nearby? Teachers and administrators who care deeply about helping the kids in their school? A god that they believe in?

Finally, my favorite quote from the book:

There’s no shame in having more or having less, as long as you’re grateful for what you have, share it generously with others, and spend it wisely on the things that make you happiest. It’s true for our kids, but it’s true for us, too.

Disclosures: I borrowed this book for free from the library in Kindle format. I will probably buy a physical copy to keep in the future. If you buy a copy through my Amazon link, I will earn a small commission.

Teaching Money Management Skills… Without Using Money

valuesandmoney

spoiled160In the book The Opposite of Spoiled by Ron Lieber, there are a number of tips and tricks presented to help teach your kids to be good with money:

The foundation of the book is a detailed blueprint for the most successful ways to handle the basics: the tooth fairy, allowance, chores, charity, saving, birthdays, holidays, cell phones, checking accounts, clothing, cars, part-time jobs, and college.

As I read through them, most of them were never found in my own childhood. I was never given a wad of money to buy my own school clothes. I didn’t have a fancy save/spend/give jar system. I had chores, but was never paid for them. There was no forced or guided philanthropy. My parents didn’t pay me interest on my savings. When confronted with the fact that all my friends had allowances, my parents eventually relented and gave me… a dollar a week. This was sometime in high school.

I’m not saying that all these clever little schemes don’t help to create financial skills. I plan to use some of them myself. But we should also focus on the core values and character traits that lead to good behavior in general. Indeed, this is also acknowledged in the book:

Finally, I want to help all of you recognize that every conversation about money is also about values. Allowance is also about patience. Giving is about generosity. Work is about perseverance. Negotiating their wants and needs and the difference between the two has a lot to do with thrift and prudence.

So I took many of the topics in the book and tried to connect them with the corresponding character traits in the big graphic shown above.

There are many other ways to encourage your kids to learn traits like patience, perseverance, curiosity, or delayed gratification. Many have been part of cultures and/or religions for centuries. The first way kids learn is by watching their parents, so we must be good examples as well. (I know, can’t I just buy an app or something instead? I mean, thanks Mom and Dad!)

Montessori Chart of Age-Appropriate Chores For Kids

spoiled160I’m currently reading The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money by Ron Lieber. So far, it covers a lot of topics about money and kids that even us adults don’t like to talk about in public. For example, kids and chores. Do you pay them? Should they be expected? What tasks should they handle? As a new parent, I didn’t really think about how controversial this could be.

Every couple of months, someone sends me a link to a particular list of appropriate chores for children of different ages. The chart originates with the Montessori school movement, where children use tools at younger ages than most others do and choose activities that the teachers refer to as work. The chart suggests that 2- and 3-year-olds can carry firewood, that 6- and 7-year-olds should empty the dishwasher, and that 12-year-olds ought to do the grocery shopping. Invariably, the sender includes a note with some version of the general message: If only!

I found this version from the Maria Montessori Facebook page with over a million shares:

spoiledchores

For the most part, I would agree a the average kid can do these things at those ages. I really have no idea what the average kid does for chores nowadays:

…we can help our kids act on what Stanford psychologist William Damon describes as a drive for competence. “They avidly seek real responsibility and are gratified when adults give it to them,” he wrote in Greater Expectations, his book about how far our expectations for our children have sunk in recent decades. Indeed, in many urban and suburban families, the chores that we assign them don’t add up to much.

I hope to keep my expectations high of my own little ones, but I won’t go around bragging that “my kids will do that!” just yet. 😉 It sounds like it is more work to get them to do the chores than to just do them myself. But then again, isn’t it always harder to be a good parent than a bad one?

Teaching Kids to be Entrepreneurs: Jack’s Cosmic Hot Dogs

cosmicHere’s a follow-up post to The Best Advice For A Teenager Looking For a Job. One of the podcasts I regularly listen to is the Alton Browncast (of “Good Eats” fame). Many topics are food-related but often it boils down to him talking with really interesting people. In one of his earlier episodes, he did an interview with Jack Hurley, who is the owner of Jack’s Cosmic Dogs near Charleston, South Carolina.

Jack Hurley has started 6 restaurants and a few other businesses. Early in the interview, he discusses the creation of his popular, retro hot dog stand. It turns out, Jack wanted to start a simple business so that he could give his kids a job and teach them how to run a restaurant. His two sons were a freshman and sophomores in high school at the time. Here’s my transcript of that part of the podcast:

…We had to make it simple for high school kids to do… I told my sons, now watch this, your mom and I are going to create this place in one month, we’re going to paint it, do the logo, do the recipes, in one month. I want you to understand, that if at some point in your life you are tired of working for The Man, that you have this creative gene in you. We’re going to do this so fast it’s going to shock you.

Obviously not every parent will have the means or ability to do this, but I thought it was a pretty cool idea (and their hot dogs look yummy). From what I can tell, Cosmic Dogs has been around now for over 10 years, so I wonder if his sons indeed took to the entrepreneurial path?

The Best Advice For A Teenager Looking For a Job

mistakesI really enjoyed this article by James Altucher called “The Best Advice Ever To A Teenage Daughter Who Needs To Make Money“. His kid is considering taking an $8 an hour job, presumably in either the food or retail industry. Why not? The first three items on my complete job history were certainly along those lines, along with nearly everyone else including these comedians. But he has some alternative advice, here is just a snippet:

I said to her, instead of that: why don’t you go to Lynda.com or CodeAcademy.com and learn basic WordPress skills. You can make blogs for stores.

It would take you ONE DAY to learn the basics.

Then go from door to door to every store in town.

Say for $1000, plus $50 / month maintenance, you’ll make their blog or basic website for them and help them upkeep it. If they require a “shopping cart” then charge them $2500.

She frowned a little and said, “They will say No. They don’t need it.”

She doesn’t want anyone to say No to her. I can relate to that. I don’t like it when people say No to me either.

I said, “Ok, we have about 40 stores on this street. Let’s say only 2 say yes. That’s $2000. It will take you ten hours to do the work.

That’s $200 an hour instead of $8 an hour.

Now, a lot of people seem to think learning coding = rich kid these days. But I think his point is more about getting out there and “making something out of nothing”. Right now, a WordPress blog is probably the easiest way to do that (ahem). Also, it’s about just getting out there, trying some stuff, and seeing what works and what doesn’t. If you start a self-employed business, you will pick up most of the subsequent skills he talks about – accepting rejection, dealing with failure, salesmanship, communication, customer service, creativity, competitiveness.

If either of my daughters has that independent wrinkle in her brain like her old man does, I’d like to nurture it.

Here are some other money-making options that I’ve though of, although the environment may be different when they finally become teenagers.

  • Buy things at garage sales or local stores and then resell them on eBay or Amazon Marketplace.
  • Make your own crafts and sell on Etsy.
  • Start a stand at the local farmer’s market or weekend flea market.
  • Design or invent something and figure out how to get a factory in China to build it for you.
  • Start a YouTube channel (learn video production and editing skills).

On the other hand, I actually think a menial $8 an hour job is still working taking on, if only to experience firsthand how tough it is.

Tax-Free 529 Savings Plans For Disabled Children and Young Adults

This won’t apply to everyone, but it could be significant if it does. I didn’t know about this until recently.

The Achieving a Better Life Experience (ABLE) Act used the structure of 529 college savings plans to create similar tax-sheltered accounts for the benefit of caring for disabled children and young adults. In addition to healthcare, qualified expenses would include education, housing, transportation, and employment support. The legislation has passed, but it doesn’t look like any states have actually created plans that you can open yet. More info here.

Simple Living and Minimalist Parenting Quotes

I was catching up on some long reads and finished the article When Mommy and Daddy Took the Toys Away which explored parents who are simplifying by keeping their kid’s toys and other material goods to a minimum.

Only having a few toys? Not expecting more toys when shopping? Huh, kind of sounds like my childhood. The snarky side of me just thinks that “minimalist parenting” sounds a whole lot like “parenting without gobs of disposable income”. In retrospect, it was so much easier for my parents. They had so much less money to spend! 😉

All kidding aside, I highlighted a couple of quotes in the article, as I think they apply to everyone. We all know that adults have their own toys and desires for more toys.

On dealing with envy:

“We don’t overcome envy in our lives by getting what another person has,” Becker says. “We overcome envy by being content with what we have and being grateful for what we have.”

On balancing simplicity and priorities (Salem is a kid):

“You don’t really need to have a whole lot of toys to be happy,” Salem says. “Just the ones that you really want.”

State-by-State Guide to Pregnancy and Work

babygate2The laws regarding pregnancy and employment can be confusing and are often misunderstood. Via the NYT, the group A Better Balance has put together Babygate, a free, easy-to-use, state-by-state online resource for working parents and soon-to-be parents.

Know your rights regarding pregnancy discrimination, paid and unpaid family leave, temporary disability insurance, breastfeeding, and more. The guide also breaks things down into the periods when you are pregnant, leaving work, and returning to work.

There is also a book which helps with “managing the realities of parenthood at work, from handling morning sickness, to figuring out maternity leave, to securing time and space to pump breast milk.”

Cooking Dinner At Home: The Flowchart

I believe that most people would like to cook their own food at home, but sometimes the best intentions still end up with me eating Panda Express with those darn little splintery chopsticks! After many weeks of trying to cook meals at home, I’ve tried to identify my roadblocks and organized them into a geeky flowchart:

dinnerflow2

The flowchart helped me identify ways to minimize failure points, like planning meals ahead of time, shopping for all ingredients ahead of time, and slowly building a repertoire of quick meals that I know I can pull off with minimal fuss. Right now I’m still riding a wave of initial enthusiasm, and our food bills haven’t been this low in a long time.

2015 ACA Obamacare Income Qualification Chart

Open enrollment for obtaining health insurance from the Affordable Care Act-sponsored Health Insurance Marketplace for the 2015 calendar year starts on November 15th, 2014. (If you have a qualifying event like marriage, divorce, the birth of a child, loss employment, or loss of insurance then you can enroll at any time.)

Here is a chart to help you determine if you will qualify for lower premiums and/or lower out-of-pocket costs based on your estimated 2015 household income and household size. Get more details and sign-up for e-mail reminders at Healthcare.gov.

aca2015income2

The numbers above are for the contiguous 48 states. Income cutoffs are higher in Alaska and Hawaii.

Estimated prices for 2015 plans are supposed to be available in “early November” but there are only 9 days until enrollment actually starts. I would hope that the actual 2015 premiums will have been finalized by then!

Baby Gear Reviews: Diaper Pails (Part 4)

diaperpailsHere is Part 4 of my series on baby gear, organized in the order of Amazon’s Baby Registry. The entire multi-part series can be found with the Baby Gear tag here. This time I’ll talk about our experiences with diaper pails.

Gotta put the poop somewhere, right? I’ll focus on diaper pails for disposable diapers. Most of them have some sort of mechanism to help prevent stinky odors from escaping the poop bucket. We got a Diaper Genie Elite from our baby registry, which was one of the two recommended by the Baby Bargains book. (The other was the Dekor.)

It works more or less, but like with razors and printers, the bag refills are where they make their profits. Each refill canister is really only 3-4 bags of diapers and they cost $6-$8 each. So essentially you’re paying upwards of $2 for a plastic bag! Compare this with under 10 cents for a kitchen trash bag from Costco. Also, the advertised “count” refers to an imaginary pile of newborn diapers that are vacuum sealed or something because I’ve never fit that many.

Parents have come up a number of ways to frugalize the diaper pail:

  • Wrap up your diapers as tightly as possible.
  • Throw the pee diapers in the regular trash and only the poops in the diaper pail.
  • Don’t waste too much bag when cutting and tying. Make sure you squeeze all the excess air out. Some use scissors instead of the provided cutter. I used to use those wire twist ties from other bags.
  • Use a plain kitchen trash bag wrapped around an empty refill canister. Note that it won’t fit perfectly and we got mixed results.
  • Buy generic refills. Note that Diaper Genie changed their design so they might not fit right anymore on new models. Check it out. Rather lame attempt at keeping their monopoly, in my opinion.
  • When your Diaper Genie bag is full, place a regular trash bag underneath and cut only the bottom knot. Let the diapers all fall into your 10 cent kitchen trash bag and throw that away. If you keep your wrapped diapers clean your refill liners can last 5 times longer or more.

We experimented all these things (with my prodding). In the end, my wife didn’t want to deal with any added hassles and we just buy the overpriced refills at Sam’s Club. I personally throw all the non-stinky diapers that I change straight in the regular the garbage.

  • Verdict: Considering you only fit around 50 diapers max at $2 a bag, that’s 4 cents a diaper which is an additional 20% of the cost of the diaper itself. In the end, you either think the reduced odor and convenience is worth the extra cost (my wife) or think you should just throw your diapers in a regular trash pail and wrap up the stinky poops in an extra plastic bag (me). For what you’ll be paying in refills you could buy a really nice trash can that will last for a long time.

Baby Gear Reviews: Baby Bottles and Accessories (Part 3)

azbottlesHere is Part 3 of my series on baby gear, organized in the order of Amazon’s Baby Registry. The entire multi-part series can be found with the Baby Gear tag here. This time I’ll talk about our experiences with baby bottles.

Our first baby was colicky and not a great eater, and that is really where these bottle companies make their money. Design a bottle nipple that reduces the unstoppable crying of colic, and we’ll gladly pay upwards of $6 per bottle. Heck, if it really worked I’d pay $50 a bottle without blinking an eye. The basic idea is that air is being swallowed when air backflows into the nipple during drinking, which supposedly causes colic. So the fancier bottles all have some mechanism to alleviate that vacuum.

Our babies were breastfed, so we got a “free” Medela breast pump (it was covered by our health insurance). Thus, we started out with a few Medela brand bottles. Baby didn’t like it. Between purchasing and borrowing from friends, we ended up trying most of the brands: Medela, Born Free, Playtex, Tommee Tippee, AVENT, and Dr. Browns Natural Flow. We tried the last three because they were the most recommended by the Baby Bargains book.

The two that ended up working best for us were:

tippee

  • Tommee Tippee – The silicone nipple does look most like a human nipple with a wide base, the construction felt of high quality, and the wider bottle was easier to hold in my palm. Keep the air vent hole facing upwards so milk doesn’t block it. On the expensive side.
  • Playtex Drop-Ins with the Latex Nipple – I bought this when desperate in a drugstore after reading a recommendation from a parenting forum. Latex is softer than silicone and thus feel more natural, although silicone is more durable and some babies are allergic to latex. The collapsible liners are convenient and eliminate vacuum but are not eco-friendly. Really, it was all about the soft latex nipple.

All bottles sold today should be BPA-free, I would check if you are using hand-me-downs. I would also note that you can buy nipples with different-sized holes that change the flowrate, your baby may prefer one to another and that could make a big difference in itself.

Other things to buy. As for accessories, a simple dishwasher basket was a very good buy; we’ve used it daily for 2 years now for all kinds of small kiddie things, even after we stopped using bottles. A good bottle brush is also helpful for thorough cleaning.

Other things we didn’t buy. We did not buy any bottle sterilizers or bottle warmers. When we had our first child, I think the first two weeks we boiled water and manually sterilized the bottles every time. What a pain. After that, we only sterilize them before the first use. Now we just wash them with warm, soapy water or use the dishwasher and rinse them well. Hot tap water works fine for warming milk or formula. When eating out, we simply ask for some hot water like they would serve for tea. If you formula-feed, the advice is to start them at room temperature and your baby will be fine with it. Our pediatrician agreed these were unnecessary. Perhaps they are wonderful inventions, but I don’t feel like I’ve missed out.

  • Verdict: There are endless combinations of nipple shapes and bottle designs. I’m sure some babies will drink from anything. For us, there really wasn’t a huge difference between any of the bottles, but I listed our two favorites above. If possible, try to borrow different bottle brands from friends to try out.