This book was recommended to me by a reader. Silver Spoon Kids, subtitled How Successful Parents Raised Responsible Children, is written by a husband and wife team where he is an estate attorney and she is a psychologist. I highly recommend it. If you buy it from Amazon through the links on this page, the blog gets a 4-6% commission. While you're there, feel free to order one of these.
The book begins with a discussion of “affluence.” “Rich” is such a loaded word, the authors prefer not to use it. Using their definition, most readers of this blog would agree they are affluent. The authors note that affluence is a double-edged sword:
Affluence allows us to raise our children in comfort but also allows us to overindulge them, gives us the ability to buy products and services to help our kids learn but also makes it easier to focus on materialism, increases the choices available to our sons and daughters but also overloads them with activities and pressures them to succeed, enables them to be involved with philanthropy but also creates children with a sense of entitlement.
The first few chapters are a little heavy on the psychology and ought to bring back some memories for most of you, but they do help you to remember the stages of development of a child and also to identify the “money personality” for you, your spouse, your parents, and other family members. It also helps you to identify what you really value and to ensure you're putting your money toward those things.
Talking To Kids About Money
One of the best chapters in the book is the fifth, Talking With Your Kids About Money. This includes a list of the “Ten Things Worst Things You Can Say” (and why.) I'll bet each of us is guilty of at least one of these:
- We can't afford it
- We'll talk about it later
- We'll pay you $100 for every A on your report card
- Money is the root of all evil
- Time is money
- That's not an appropriate question
- They're disgustingly rich
- Don't ever let anyone know how much money we have
- Why don't you have your friends come over here; we have a pool, after all.
- Be thankful you don't live there.
The authors then give lots of practical tips for talking to your kids about money, from pre-school to the adult years, emphasizing that your actions must match your words.
The next chapter, on allowances, was also excellent. The authors give two rules for allowances-
- All children should get an allowance and
- An appropriate allowance is what you feel is appropriate
They caution against tying the allowance to chores and give some guidelines on what you should have the allowance cover.
Diversity, Philanthropy, Estate Planning, and Parenting in an Era of Change
Remaining chapters address topics such as exposing your children to people of different socioeconomic backgrounds (only 1% of the people on this planet have a college education and only 1% own a computer), unique methods of teaching the importance of philanthropy, involving your children in estate planning, and parenting in an era when the traditional family is not necessarily the norm. One of the most interesting ideas was to use a trust as an educational money management vehicle. They recommend that children meet with the trustee at least once a year after they turn 15. They then recommend the child become a coadministrative trustee at a later age for a few years. They then graduate to sole administrative trustee and eventually become sole distributive trustee. They also discuss how a trust can be used to teach children philanthropy, by using a charitable income trust. The kids are made trustees, but don't get anything for 20-30 years. They simply help manage the money and decide what charities the income goes to for 20-30 years, then they get what remains, hopefully at a time when they've matured and learned to manage money.
The book is over 10 years old (it talks about how palm pilots are ruining our kids) but is still highly relevant. It is less than 250 short pages and well worth your time. If you feel like you've made it but worry about your kids, this book is for you. It will teach you to communicate about money in a healthy way, teach strong values and compassion, and prevent a feeling of entitlement. My kids need those lessons, and I'm sure yours do too. You can pick it up at Amazon for $11.46 and I'm adding it to my recommended reading list.
Have you read the book? What did you think of it? What do you teach your kids about money? Do you pay an allowance? Comment below!